Published: Sun, February 03, 2019
Medicine | By Brett Sutton

WashU Expert: New Trump drug policy proposal ambitious, but is it feasible?

WashU Expert: New Trump drug policy proposal ambitious, but is it feasible?

A senior HHS officials said on a call with reporters, though, that because Part D "is such a premium-sensitive market", the department expects plan sponsors "are going to negotiate more aggressively or make other changes such that they won't have to increase premiums while still passing on lower costs at the pharmacy counter".

The rule would exclude rebates from safe harbor protections that now shelter drug makers' rebates from penalties under the federal Anti-Kickback Statute, and would create new safe harbor for discounts offered to patients, as well as fixed-fee service arrangements between drug makers and PBMs. The proposal would "fix the misaligned incentives in the system" that now result in insurers and PBMs favoring medicines with high list prices, PhRMA CEO Stephen Ubl said in a statement. Azar said that plans will likely want to create the same system for a private plan that they do for Medicare. Rebates "ought to lower costs to patients, and this is a good first step towards that goal", Sen. Part of the proposal included requiring the disclosure of list prices in television ads, increasing negotiated discounts in Medicare, banning pharmacy gag clauses, adopting real-time prescription benefit tools, and boosting low-priced generic and biosimilar competition.

The proposed regulation from Health and Human Services Secretary Alex Azar would eliminate behind-the-scenes discounts among drugmakers, insurers and go-betweens and instead require that they be paid directly to consumers when they buy their medications. The rebates manufacturers pay to pharmacy benefit managers would be viewed as illegal kickbacks under the proposed rule.

Currently, the rebates drug makers pay to PBMs are permissible because they are covered by safe-harbor protections under the Anti-Kickback Statute.

Drugmakers now pay out more than $100 billion in rebates annually.

These new safe harbors would become effective 60 days after HHS publishes a final rule.


The 60-day comment period is underway. "The Trump Administration's rebate proposal will increase government spending by almost $200 billion and the majority of Medicare beneficiaries will see their premiums and total out-of-pocket costs increase if this proposal is finalized", said House Ways & Means Committee chairman Richard Neal (D-Mass.) and Energy & Commerce Committee chairman Frank Pallone Jr.

But the administration's plan for drug rebates, announced Thursday, would end the pharmaceutical business as usual, shift billions in revenue and cause far-reaching, unforeseen change, say health policy authorities. Azar said that plans and PBMs can start to change their pricing structure now.

Representatives of pharmacy benefit manager companies were less pleased, saying the changes could impact access to medicines for Medicare users. Initially, this applies to Medicare and Medicaid, managed care plans. If you were confused after seeing health policy wonks in a tizzy over a proposed rule dropping, let me explain.

Cracking down on kickbacks is part of the administration's blueprint for lowering drug prices. "It is short-sighted to look at one component of our offering as having a disproportionate impact on our business model", Henry said in an email.

"The Trump administration's rebate proposal will increase government spending by almost $200 billion and the majority of Medicare beneficiaries will see their premiums and total out-of-pocket costs increase if this proposal is finalized", Reps. Some Democrats, however, do not agree with HHS's latest move. "The majority of Medicare beneficiaries will see their premiums and total out-of-pocket costs increase if this proposal is finalized", Reps.

"Over the last three years, COA has documented real-life horror stories from practices and physicians about patients battling cancer who have suffered at the hands of PBMs due to delayed coverage decisions, denial of needed treatments, impenetrable bureaucracies, and failure to receive medications in a timely manner", the group said in a press statement. Neal is chairman of the House Ways & Means Committee and Pallone is chairman of House Energy & Commerce Committee.

Like this: