John Barkett was an architect of the Inflation Reduction Act’s landmark drug pricing provisions, which for the first time tasks Medicare with negotiating lower charges for some drugs. It’s drawn the ire of the pharmaceutical industry, which argues it undermines innovation. Barkett, who served in the Biden administration's Domestic Policy Council as a senior policy adviser and worked on the Affordable Care Act, recently moved to consulting firm Berkeley Research Group’s health care transactions and strategy practice in a senior role, where he’ll advise clients on the impact of health policy. Ben caught up with him to discuss how the Centers for Medicare and Medicaid Services is implementing the law. This interview has been edited for length and clarity. Pharmaceutical companies have criticized CMS for moving too quickly. What do you think? CMS is striking the balance required to get input when appropriate, but also meet the really tight deadlines the IRA requires. You’ve got a year to set up brand new competency within CMS, hire the people, create the structure, set out the ground rules and analyze the data. And that’s just for the Medicare negotiation parts. If they’re requesting comments in 30 days, that’s because that’s the time they had in order to meet other deadlines. It doesn’t represent any arrogance or disregard of stakeholders. What do you see as the biggest challenges for IRA implementation going forward? It’s a tight time frame and these laws aren’t self-executing. It’s also a complicated feedback environment. They’re using authorities to move quickly. That’s a double-edged sword. It’s good to get feedback but they’re under a microscope. When you were crafting the legislation, what was it like dealing with industry criticism? It’s not for the faint of heart. The tension was between access and innovation. It was focusing on trying to improve access today while keeping in mind potential effects on innovation. Not every policy in there is one that the pharmaceutical industry doesn’t like. It's not hard to find examples of companies saying that capping what Medicare beneficiaries pay at the pharmacy is going to help more beneficiaries access the drugs. They'll tell Wall Street that is going to lead to higher profits. The industry is critical of Congress’ decision to exclude small-molecule drugs from negotiation for nine years, versus 13 for biologics. What’s your response to that? If you take the industry at their word, if they’re looking at development, one of the limiting factors on future revenues is how soon a drug might be negotiated. That said, today you get five years of exclusivity for a small molecule drug and 12 years of exclusivity for a biologic. Arguably, those exclusivities have a bigger impact on potential profits than when negotiation occurs. I can't recall ever hearing these arguments made about exclusivities in the past.
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