Industry Groups Weigh in on HHS' Drug Price Blueprint
Organizations from across the healthcare industry weighed in on the administration's drug price blueprint in time for a Monday deadline.
In May, the Department of Health and Human Services issued a request for information shortly after the president unveiled his administration's "American Patients First: plan to lower drug prices. In the policy blueprint, the proposal changes to Medicare drug benefits to lower costs, an increased focus on drug market competition, and a focus on "foreign freeloading," which the president blamed for driving up prices.
The plan received plenty of reactions from across the healthcare spectrum, from patient advocacy groups to the drug industry to pharmacy benefit managers and hospitals.
Here's a look at the range of feedback submitted on the drug blueprint:
- The Community Oncology Alliance warned in a letter to HHS that plans to move certain medications from Medicare Part B into Part D would "increase the roles, leverage and power of third party middlemen. The group added stated that their efforts to curb abuses by [pharmacy benefit managers] and to fix the broken 340B drug discount program such that patients in need benefit from 340B savings, not hospitals' bottom lines.
- PBMs and the 340B Program have both been frequent targets of criticism as policymakers and stakeholders debate ways to address the rising costs of drugs. The leading pharmaceutical industry group—the Pharmaceutical Research and Manufacturers of America (PhRMA)—also took aim at PBMs. PhRMA pushed for what it called a "bold new stance" on drug rebates in its letter to HHS. It suggested that the agency "de-link" the supply chain from list price and push the system toward one where PBMs no longer calculate their fees based on a drug's list price.PhRMA also said that regulators should ensure that savings from drug rebates are used to lower drug cost sharing for patients.They continued that Pharmacy benefit managers and other entities in the supply chain have incentives to favor medicines with high list prices and rebates.This hurts patients and increases costs, they contend. PhRMA also suggested that policymakers revisit the 340B program and "strengthen" it, as recent research indicates "hospitals are taking advantage" of its discounts.
- The Pharmaceutical Care Management Association, the largest trade organization for PBMs, wrote in its response to the RFI that rebates must remain a viable option for PBMs, because they are the only proven way for PBMs to negotiate lower drug costs. Instead, PCMA said that a focus on policies promoting greater competition in drug markets is more likely to lead to lower costs than eliminating rebates or shaming pharmaceutical companies for list prices. PCMA and PBMs are open to any idea that could use a market-based approach to lower drug costs. PCMA continued that recognizing there have been proposals to change the current rebating system, there hasn't yet been a viable, market-based proposal that would take as much cost out of brand drug spending as negotiated rebates do today.
- 34OB Health, a group that includes more than 1,300 hospitals enrolled in the drug discount program, states that 340B is a crucial tool for safety-net providers that treat low-income patients, and significant changes to the program could hinder those providers' abilities to treat patients in need. In addition, 340B hospitals are not responsible for setting list prices for drugs—pharmaceutical companies are. Under the current regulatory system, the only institutions that set drug prices and raise them are the manufacturers based on what the market will bear, 34OB stated. And posits that policymakers should implement the long-delayed 340B rule that sets price ceilings and civil penalties to drug makers that knowingly overcharge hospitals. HHS delayed the rule for the fifth time in June, pushing off its implementation until July 2019.
- The American Hospital Association commented that pharmaceutical companies are inappropriately blaming 340B for rising drug prices to divert attention from their own price increases. AHA contends that this is a blatant attempt to divert attention away from their decisions to set and raise drug prices at higher and higher levels, contributing to double-digit margins.The AHA also warned that changes to the program could harm safety-net hospitals, and echoed 340B Health's call for HHS to enforce the price ceilings rule.