The Physicians Proposal for a National Pharmaceutical Program PNHP Annual Meeting 2016 Adam Gaffney, MD David Himmelstein, MD Joel Lexchin, MD Gordy Schiff, MD Enrique, Seoane Steffie Woolhandler, MD

Problems of the Pharmaceutical System, US and Canada Inadequate access Clinical Testing Uninsurance Industry distortion of results, conduct, presentation. Drug copayments/cost sharing Data secrecy Preclinical Development Drug Approval Lack of innovation: “me-too” drugs. Regulatory agencies mission corrupted: user fees Patent abuses. Expedited reviews  less safe drugs. Public R&D funding > Private profits

Problems of the Pharmaceutical System, US and Canada (continued) 5. Postmarketing/Safety Sluggish fulfillment of postmarketing studies. Inadequate funding of safety programs at regulatory agencies. 6. Promotion Misleading advertisements Wasted resources Inadequate review of promotional materials. Drug spending Much higher than other OECD nations.

I. Access and Provision Comprehensive pharmaceutical benefit for all. Elimination of Drug-Cost Sharing

II. Preclinical Drug Development Repeal of Bayh—Dole: Drugs developed in publicly-funded labs would not be eligible for patent protection. Drug development “public track” NIH “Drug Innovation Division”: Fund R&D of new drugs in noncommercial laboratories; new drugs would be in the public domain. Public track would be geared to neglected diseases, commercially unprofitable diseases, untreatable diseases, etc. Patent Reform Not able to patent clinically equivalent isomers, minor changes to drug delivery devices.

III. Clinical Testing Improve clinical trial standards Default: compare new drugs to efficacious comparators. Default: Hard endpoints, not surrogate endpoints Data Transparency Trial data (anonymized) will be publicly available, both for drugs that receive marketing authorization and those that do not. Clinical trial funding reform Most clinical trials will be publicly funded. NIH Division of Clinical Trials will select drugs to be tested; actual trials performed extramurally. Also test new uses for old drugs.

IV. Drug Approval Reform Full FDA/Health Canada public funding. Narrowed eligibility for expedited approval. Increase in regulatory agency resources.

V. Postmarking Studies and Safety Monitoring Postmarketing studies: Enforce requirement that companies perform required postmarketing studies in the appropriate time period. Drug safety funding: Branches of regulatory agency responsible for drug safety should have similar levels of funding as those for drug approval.

VI. Promotion Increased funding for regulatory agency review of promotional materials. Increased, escalating sanctions for misleading sanctions. Continued Medical Education: not industry funded. DTC Advertising (US) Optimally banned, although this could be unconstitutional. Conceivably, single payer could exclude drugs promoted via DTC from national formulary. Tax Reform No more tax writes off for money spent on promotion.

VII. Lowering Drug Costs Increase proportion of generic/public domain drugs Especially from NIH Drug Innovation Division Also end of Bayh-Dole and patent reform. Direct drug negotiations with a national formulary. Compulsory Licensing If singe payer unable to negotiate a reasonable price with a company (defined as guaranteed rate of return over costs of R&D/production) for a patented drug, would issue a compulsory license to generic manufacturer. Public production Last resort when unable to obtain a reasonable price with a generic manufacturer, or during shortages and public health emergencies.

VIII. Savings (preliminary US estimates). -$157.2 billion Reducing non-discounted drug spending to OECD averages/approximate prices (50%). $22 billion Increased drug spending on the uninsured $34.9 billion Increased drug utilization by eliminating copayments (17% utilization increase) $54.8 billion New Public R&D Costs $3.2 billion New regulatory agency costs -$42.3 billion Potential annual net savings

Questions/Discussion