On Friday, May 11, 2018, HHS Secretary Alex Azar and President Trump gave quick speeches about how the United States would address drug pricing. At the same time, the Trump Administration published a their ideas: “American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.” You don’t need to read all 44 pages (DPAC did this for you!) to know that none of the ideas proposed will help people with diabetes immediately, in the long-term, or at all.
Four Challenges & Four Strategies (According to the Administration)
The blueprint claims HHS has identified four challenges for the U.S. drug market:
- High list prices for drugs
- Seniors and government programs overpaying due to lack of negotiation “tools”
- High and rising out-of-pocket costs for consumers
- Foreign governments getting a “free-ride” off of American investment in innovation
And HHS has proposed four key strategies to reform:
- Improved competition
- Better negotiation
- Incentives for lower list prices
- Lowering out-of-pocket costs
5 Takeaways that Show the Blueprint Won’t Help The Diabetes Community
“Prices will come down.” – Donald J. Trump
- Prices will not come down any time soon, even if all of the immediate actions or “further opportunities” come to fruition within the next year (which will be impossible, with many of the actions needing legislation). The two single items that will help with out-of-pocket costs would be the elimination of the pharmacy gag clauses imposed by Pharmacy Benefit Managers (which DPAC supports – you can learn more AND send a message to Congress about this issue) and including information about price increases and alternatives in Medicare Part D explanation of benefits.
- “Increasing competition” for HHS means generic drugs – not the newer biologics, insulins, and brand name drugs that people with currently use. (Metformin, a popular diabetes oral medication, is already a generic drug that is inexpensive – $4 at Walmart). Spurring competition for generic drugs does nothing to help the diabetes patient community with additional options.
- “Better Negotiation” is only for government programs, not individual or employer-based insurance plans. If you’re on Medicare, next year’s budget will include a “closed formulary” which will require a minimum of one drug per category rather than two (which means less access to the drugs currently available, not more access). There is nothing in the blueprint about better negotiation for the U.S. population that does not have insurance (and doesn’t qualify for Medicaid) or has non-governmental insurance.
- The solutions for “Incentives for Lower List Prices” does not involve those in the supply chain responsible for list prices. The blueprint proposes a broad modernization of Medicare Part D (including a cap on the out-of-pocket maximum for Medicare Part D, which is good for many Medicare beneficiaries), and improving the 340B program. Again, nothing for the non-insured or non-governmental programs. Nowhere in the documents does it reference manufacturers, drug wholesales, insurance companies, pharmacy benefit managers, employers, or… patients. The U.S. government does not control list prices and does not offer incentives for anyone in the supply chain.
- There is no proposal to reduce out-of-pocket spending for most of the U.S. population. Once again, the focus is on the 340B drug program (which does not help the average consumer – it helps hospitals), applying “some” manufacturer rebates for Medicare, and getting those who are receiving Medicare low-income subsidies to receive biosimilars at a lower cost. In fact, with a push for moving many medications that are currently under Part B to Part D, prices for insulin negotiated by Medicare will be higher.
We’ll be watching to see how all of the proposed steps will shake out, but the first pass at helping the average American with the cost of prescription drugs is a miss.