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Merritt: The Man with a Plan on High Drug Prices

By Andrew Siddons, CQ Roll Call

January 21, 2016 -- Amid outrage over high drug prices, lawmakers' appetite for action is growing, even as a partisan split largely remains.

Mark Merritt, president of the Pharmaceutical Care Management Association, might have a solution that can appeal to both sides.

"Government has a real important role here," Merritt testified last month at a Senate Special Committee on Aging hearing. "We think the role is more ensuring competition."

Merritt's organization represents pharmacy benefit managers, companies that work with insurers on prescription drug plans. While the industry might be obscure, it manages prescriptions for around 250 million Americans and helps insurers control spending, putting the group in a good position to weigh into the drug price debate.

Instead of suggesting a broad overhaul of the system, Merritt found the sweet spot between lawmakers who want more aggressive government involvement and those who think the market should work itself out.

"I think there's a bipartisan demand for real answers on controlling drug prices, and they're looking for things that actually work," Merritt said in an interview. "A lot of the so-called solutions on drug pricing, like price controls or more pricing transparency, are kind of shallow solutions."

Merritt offers two specific fixes. Last year, Turing Pharmaceuticals suddenly increased the price of a parasite infection drug from $13.50 to $750 per pill, and was able to do that because the drug no longer had patent protection and faced no competition. The federal government, Merritt says, should keep a list of similar drugs that are at risk of having their prices raised.

"The hedge fund vultures already have those lists, why shouldn't Congress?" he says.

Additionally, he says, lawmakers should explore ways to encourage competition for those drugs, for instance by creating a new, accelerated pathway for the review of those products at the Food and Drug Administration. The FDA could use the list of at-risk drugs to determine which ones qualify for priority review.

Senators on both sides of the aisle found Merritt's proposals attractive.

"If these companies knew that a generic could get approved within six months, that gives them a very small window to skim the cream, so to speak, and rip people off," Sen. Claire McCaskill of Missouri, the Aging Committee's top Democrat, said at the hearing.

Maine Republican Susan Collins, the panel's chairwoman, said after the hearing that she would push to get both ideas into the Senate's version of 21st Century Cures, a bill (HR 6) passed in the House last summer that would overhaul the FDA's application process to help spur innovative medicine.

Merritt has been invited to testify once more on Tuesday, Jan. 26, when the House Committee on Oversight and Government Reform holds a hearing on drug prices that will also feature Martin Shkreli, the infamous former head of Turing.

Merritt joined the group as its president in 2003, around the same time that Congress approved Medicare Part D, the taxpayer-supported prescription drug benefit. Since Part D went into effect in 2006, the industry has grown dramatically.

A Washington veteran of 25 years, Merritt previously was a lobbyist for America's Health Insurance Plans and the Pharmaceutical Research and Manufacturers of America.

He also worked on the GOP presidential campaigns of former Sen. Bob Dole of Kansas and Sen. Lamar Alexander of Tennessee.

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