Washington Editor

WASHINGTON - In response to a bill that would require the Department of Health and Human Services to negotiate directly with the manufacturers of single-source drugs without therapeutic equivalents covered under Medicare Part D, the Biotechnology Industry Organization (BIO) this week issued concrete numbers demonstrating savings realized by seniors under the existing free-market framework.

"Medicare Part D beneficiaries are saving money," Jayson Slotnik, BIO's director of Medicare reimbursement and economic policy, told BioWorld Today, "and have access to lower-priced drugs as compared to drugstore.com and Costco.com."

That refutes claims made by Sens. Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine) in a letter to the Washington Post, in which they singled out those two mail-order pharmacies as offering better discounts than Part D plans. In particular, the lawmakers wrote that private prescription drug plans don't have leverage "to negotiate for discounts" in cases in which the market cannot achieve lower prices, pointing to single-source therapies as an example.

They believe their legislation, the "Medicare Enhancements for Needed Drugs Act of 2007," could balance the price differences between mail-order pharmacies and Part D plans.

But Slotnik insisted that their assertions of greater savings through drugstore.com and Costco.com "are not found for" single-source drugs.

According to BIO's comparison, prices on this class of therapies from five of the top nationwide prescription drug plans were 11.6 percent lower than Costco.com prices, on average, and 10.5 percent lower than drugstore.com prices. In some cases, the prices were found to be as much as 20 percent below drugstore.com and 17 percent less than Costco.com.

In terms of accompanying dollar savings, there was an average $141.75 reduction per month compared to Costco.com and $136.93 compared to drugstore.com.

BIO's sample includes 25 single-source drugs and biologics for cancers, rheumatoid arthritis, HIV/AIDS, multiple sclerosis, osteoporosis, hepatitis C, chronic kidney disease and organ transplant rejection, "the latest innovative therapies," Slotnik said, warning that the Wyden-Snowe proposal to "create price controls" on such products would stymie innovation in areas of critical care.

"The world of single-source therapies is very large and very broad," he said, noting that many are orphan, niche products. "There are a lot of drugs and biologics in that, and some of that universe really impacts Medicare beneficiaries who suffer from some of the most debilitating diseases."

Additionally, BIO's analysis found that several of these therapies were not available through the two mail-order pharmacies, and more than half weren't available through the Department of Veterans Affairs pharmacy benefit, either.

Wyden and Snowe's bill has arisen out of a broader movement on Capitol Hill to introduce government negotiations on Part D pricing for all drugs, alongside private plans. Already this year, the House of Representatives has passed legislation that would repeal a noninterference clause and require a government seat at the Part D table, though there appeared to be less steam for identical legislation passing in the Senate.

Slotnik said he remains uncertain on the next move from Senate Finance Committee Chairman Max Baucus (D-Mont.), from whom a bill would arise in the upper chamber, though he said he doubts it will include "anything" related to the Wyden-Snowe proposal, which is labeled S. 250.

Government negotiation critics, many of whom say such efforts represent a step toward price controls, believe that existing Part D plans are working as intended and point to average savings of $1,200 per month for enrollees. In addition, average beneficiary premiums have dropped to $22 per month this year, 42 percent below original estimates.

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