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Washington Swirls With Proposals to Get a Grip on Rising Drug Prices

Advocate Masthead

Advocating for patients, ACP adds its voice to bipartisan efforts

Feb. 22, 2019 (ACP) – The rising price of drugs, a perennial focus of the American College of Physicians, is a hot topic in the nation's capital this year. Both the White House and Congress are eager to embrace reforms, and ACP is offering expert guidance as elected leaders move forward.

Addressing the high prices of drugs is crucial, Dr. Ana Maria López, ACP's president, said at a briefing with reporters in Washington, D.C., earlier this month, noting that physicians see this problem every day with their patients.

“People come in and have a list of medications, and you look and see when they were refilled, and see that the refill times are not exactly right,” she explained. “People will say, ‘I can afford to take these two meds on a daily basis, these I have to take once a week.’” Physicians routinely hear things like “I can fill my meds or I can pay my rent,” López said. “People are making these sorts of choices, and as physicians, it's our job to advocate for their health.”

In his State of the Union address, President Trump spoke of an interest in reining in prices.

“It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place,” he said. “This is wrong, this is unfair and together we will stop it. I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients.”

The administration's latest proposal relative to drug pricing is one that would eliminate the so-called “safe harbor” for rebates paid by drug manufacturers to pharmacy benefit managers (PBMs), Medicare Part D plans and Medicaid managed care organizations. Current safe harbor policies allow the discounts and negotiations between PBMs and drug manufacturers to be exempt from federal anti-kickback rules.

“The safe harbor polices were created to encourage price competition that benefits Medicare and Medicaid,” said Hilary Daniel, a health policy associate with ACP. However, she said, “there is little transparency, and the amount of rebates that are passed on to consumers is unclear.”

The White House proposal, though, is a new safe harbor program, Daniel said, prompting close monitoring by ACP.

“Depending on their situation, patients may or may not benefit from the change,” she said. “Patients with chronic conditions and high drug costs may see lower out-of-pocket costs, whereas patients who do not have high drug costs may not see any saving.” In addition, insurance premiums may go up under the plan, she said.

On the congressional front, committees in both the House and Senate held hearings in January about prescription drug pricing.

“The price of prescription drugs continue to rise,” Daniel said. “We saw some pharmaceutical companies publicly state that they would not raise prices of certain drugs in 2018, but then they raised the prices in January 2019. Additional legislative and regulatory action is needed to keep pricing in check and drugs affordable for patients.”

“There continues to be bipartisan interest in this issue, and Congress is looking to implement policy changes that will begin to address it,” Daniel said.

ACP submitted statements to be inserted in the record of both congressional hearings, outlining its recommended policies to reduce the price of prescription drugs. ACP urged representatives and senators to promote competition in the pharmaceutical market, increase transparency around prescription drug pricing, implement reforms that lower the out-of-pocket-costs for consumers and increase the value of drugs in the marketplace.

“We believe these actions will repair the broken market for prescription drugs and inject much needed transparency into the system,” Daniel said.

Specifically, ACP wants Congress to:

  • Allow Medicare Part D to negotiate drug prices
  • Reform drug formularies to ensure lower costs for patients
  • Expand the use of comparative effectiveness research
  • Improve competition for single-source drugs
  • Develop a process to ensure safe re-importation of drugs
  • Improve value within the prescription drug market through value frameworks, bundled payments, indication-specific pricing and evidence-based design benefits

The Trump administration's proposed new policy – known as a “rule” – is in the middle of a public comment period that ends April 8, Daniel said. “Once the final rule is published, there are 60 days to implement the previsions,” she said. “Since aspects of the proposed rule would begin effective Jan. 1, 2020, we might see a final rule sometime in the fall.”

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