The overall strategy is laid out across four areas:
- Increasing competition though policy measures that prevent manufacturers from gaming the patent system and promoting innovation and competition among biologics.
- Improving negotiation abilities, including doing more with value-based purchasing; allowing for more substitution, especially in the case of single-source generics; and further examination of the competitive acquisition program for Part B.
- Providing incentives to manufacturers to lower their list prices.
- Lowering out-of-pocket costs.
Currently, there is no incentive to lower drug prices, Mr. Azar noted. He called out pharmacy benefit managers (PBMs) for financially benefiting from both manufacturers and the insurers they represent and said HHS is looking into banning financial compensation to PBMs from the manufacturers. He also said the agency will be releasing a request for information on the feasibility of doing away with rebates as a means of driving manufacturers to lower their prices.
PhRMA, the lobbying group representing pharmaceutical manufacturers, said in a statement that some of the changes related to Part D “could undermine the existing structure of the program that has successfully held down costs and provided seniors with access to comprehensive prescription drug coverage. We also must avoid changes to Medicare Part B that could raise costs for seniors and limit their access to lifesaving treatments.”
The Pharmaceutical Care Management Association, the lobbying group for pharmacy benefit managers, also spoke out against the idea of eliminating rebates, noting in a statement that getting rid of them “and other price concessions would leave patients and payers, including Medicaid and Medicare, at the mercy of drug manufacturer pricing strategies. PBMs have long encouraged manufacturers to offer payers alternative ways to reduce net costs. Simply put, the easiest way to lower costs would be for drug companies to lower their prices.”