Trump outlines plan to lower drug prices

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Trump outlines plan to lower drug prices

By David Salazar - 05/12/2018
President Donald Trump on Friday unveiled his plan to lower drug prices, which has seen a largely favorable response from the industry. Speaking in the Rose Garden, Trump highlighted the four areas that the Administration’s response will tackle to bring drug prices down — high list prices, a lack of negotiating tools in government programs, high and rising out-of-pocket costs and what Trump called “global freeloading” of other countries charging less for American innovation.

“The American people deserve a healthcare system that takes care of them — not one that taxes and takes advantage of our patients and our consumers and our citizens,” Trump said.

The Dept. of Health and Human Services has issued a blueprint of strategies that include actions the President will direct HHS to take immediately and actions that HHS can take in the future. HHS on Friday opened a request for information from stakeholders on potential strategies to increase competition, improve negotiating tools, incentivize lower list prices and lower out-of-pocket costs.

HHS secretary Alex Azar, himself an industry veteran, said that generics would play a key role in improving competition in the market. He also noted that both Medicare needs better negotiating tools, and that the Administration was looking into how to negotiate Part B drug prices within Part D negotiations. With regard to lowering list prices, Azar said the Food and Drug Administration was looking into ways to require manufacturers to include list prices in direct-to-consumer advertising. He also said HHS was looking into the system of PBM rebates. Azar noted that eliminating gag rules — through which he said PBMs prohibit pharmacists from telling patients that cash prices on drugs might be cheaper than through their insurance — would be a top priority, and that HHS would seek to block such rules in Medicare Part D plans.

The industry — from retailers to manufacturers to community pharmacists and pharmacy benefit managers — have said they’re ready to work with the administration on its efforts.

“This is an important issue for our patients and all payers of prescription drugs, and we believe today’s announcement by the Administration is a positive step forward in addressing the issue of rising drug prices,” Walgreens said. “As our two pharmacists who attended the event at the White House today can attest, we are committed to partnership and collaboration with others in the supply chain to provide a better, more transparent and more effective approach to health care.”

CVS Health’s response highlighted the tools that it has implemented to help contain drug costs, including tools through its pharmacy benefit manager CVS Caremark, including universally available rebates at point-of-sale for its clients. It also outlined some of the pharmacy counter tools that it implements to improve transparency, which include information about what patients will pay out-of-pocket, and its tools for prescribers who can see lower-cost alternatives covered under a patient’s plan.

“Policy solutions that lower drug prices for consumers and reduce out-of-pocket costs are aligned with CVS Health's business model and would not be expected to have a negative impact on profitability,” CVS Health said. “The company has long been committed to utilizing all possible tools to reduce the cost of prescription drugs. These tools, combined with increasing competition in the marketplace by making more generics available, increasing the use of biosimilars, and advocating for eliminating tactics that stall competition, are essential in tackling the problem of high cost drugs.”

NACDS on Friday issued a memo to its chain members, noting that it would be focused on learning more details in the coming days, as well as analyzing the Administration’s plan.

“We will evaluate the proposals through the lens of NACDS’ public policy positions and perspectives related to prescription drug pricing, which are articulated in an Issue Brief that we use in advocating for pro-patient and pro-pharmacy policies,” NACDS said. “Across the spectrum of public policy issues, NACDS emphasizes that just as pharmacists provide access to better healthcare every day, we maintain a proactive footing in providing access to health policy solutions.”

Part of the administration’s plan is to focus on PBMs — a move that the National Community Pharmacists Association is enthusiastic about. “We are pleased the HHS Inspector General’s office will investigate the retroactive price concessions PBMs charge pharmacies,” NCPA CEO Doug Hoey said. “This is another signal that the end of this practice detrimental to seniors and community pharmacies could be on the horizon. Moving these fees to the point of sale will be a victory for patients, taxpayers, and pharmacies. Not only will Medicare Part D be more open and fair, but spending will decrease. We look forward to working constructively with the administration and Congress to make that happen.”

PBM trade organization the Pharmaceutical Care Management Association said that it supports greater plan flexibility to encourage better price negotiations, and that it has supported patients paying the lowest price, whether through cash or their insurance plan.

“Getting rid of rebates and other price concessions would leave patients and payers, including Medicaid and Medicare, at the mercy of drug manufacturer pricing strategies,” PCMA said. “PBMs have long encouraged manufacturers to offer payers alternative ways to reduce net costs. Simply put, the easiest way to lower costs would be for drug companies to lower their prices.”

For its part, the pharmaceutical industry is approaching the proposal with cautious optimism, as indicated by the Pharmaceutical Research and Manufacturers of America’s response. “These far-reaching proposals could fundamentally change how patients access medicines and realign incentives across the entire prescription drug supply chain,” Stephen Ubl, PhRMA president and CEO, said. “While some of these proposals could help make medicines more affordable for patients, others would disrupt coverage and limit patients’ access to innovative treatments.”