Insurers to Trump: Let Our Drug Price Negotiators Work

A health insurer group says it likes some of the Trump administration’s new proposals for controlling drug prices but believe that others could increase prices, by limiting health insurers’ ability to negotiate with the manufacturers.

President Donald Trump unveiled the proposals today at a briefing in the White House.

(Related: Trump Promises Aggressive Campaign to Cut U.S. Drug Prices)

“Several of the president’s proposed solutions will have a real impact on lower the impact of drug prices on Americans,” America’s Health Insurance Plans said today in a statement.

The Washington-based group said it likes administration proposals to change drug patent rules, to encourage doctors to prescribe lower-priced medications, and to give insurers more overall flexibility in negotiations with drug manufacturers.

AHIP cited one proposal, to require Medicare Part D prescription drug plans to pass on the savings from drug manufacturer rebates at the pharmacy counter, as an example of a proposal that could backfire.

“Requiring drug rebates to be passed through to Medicare patients at the pharmacy counter would likely lead to higher drug prices from manufacturers, and would to higher premiums for seniors,” AHIP said in a response to the Trump administration proposals.

AHIP argued in a blog post two days ago that, in many cases, drug companies use rebates to encourage patients to ignore the underlying cost of drugs and use more expensive versions of the drugs.

Other Reactions

Trump singled drug manufacturers and pharmacy benefits managers (PBMs) out for criticism.

But Express Scripts Inc., a St. Louis-based PBM that’s being acquired by Cigna Corp., praised the administration’s proposals.

“President Trump rightly recognizes [that] drug companies charge way too much, and their prices need to come down,” Express Scripts said. “In particular, we are pleased that the administration recognized and endorsed policies that we have advocated for over the years.”

Some of those policies include increasing the number of generic drugs available, and “gag clause” provisions that limit pharmacists’ ability to tell patients about ways to reduce their drug spending, Express Scripts said.

Richard Fiesta, executive director of the Alliance for Retired Americans, said he believes that the Trump administration weakened its proposals by leaving out any provision that would let Medicare itself bargain for lower prices directly with the drug manufacturers.

“We are outraged that he has chosen to side with the powerful multinational pharmaceutical corporations and against American retirees and consumers,” Fiesta said.

AARP, which has often been critical of other administration proposals, put out a statement praising the administration’s goals, without criticizing any of the proposals.

“We welcome a broad look across the entire drug supply to chain find ways to help drive down drug prices,” Nancy LeaMond, an AARP executive, said in the statement.

But LeaMond noted, without criticizing the Trump proposal package, that AARP has supported letting Medicare officials negotiate for lower drug prices directly with the drug manufacturers.

The Documents

Rebates do nothing to stop drug companies from increasing the underlying prices of the drugs, AHIP said.

The White House has posted a list of specific proposals for controlling drug prices here.

A copy of a longer document describing how the Trump administration sees the drug price situation is available here.

Any of the proposals could help, or hurt, health insurers. One proposal, for example, could encourage drug makers to put prices in their ads, to promote ad-driven price competition.

But h ere’s a list of some of the proposals that would appear to have a direct effect on issuers of Medicare Advantage plans, Medicare Part D drug plans or commercial health plans.

The administration says it wants to:

• Give Medicare Part D drug plan issuers more power to negotiate with drug makers.
• Give Medicare Part D drug plan issuers more benefits design flexibility.
• Discourage Medicare Part drug plans from easing use of costly brand name drugs that quickly push enrollees into the catastrophic spending category.
• Set a new limit on out-of-pocket spending for Medicare Part D plan enrollees who do have catastrophic claim costs.
• Require Medicare Part D drug plans to share a minimum portion of drug rebates with patients.
• Make some Medicare Part D program incentives available only for drug makers that stop raising prices.
• Require Medicare enrollees to be told what their out-of-pocket costs will be prior to receiving a drug covered by Medicare, and whether lower-cost alternatives exist.

— Read Rare Loss for U.S. Pharma Lobby Will Cost the Industry Billions, on ThinkAdvisor.

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