While other drug pricing reform proposals have been voiced, it remains to be seen whether any plan will materialize in time to be used as a campaign tool for the 2020 election. (Photo: Shutterstock)
A one-two punch has put the drug pricing agenda from the White House down for the count. A judge has blocked one rule that would have forced drug companies to disclose prices in TV ads, and a proposal that would have eliminated drug rebates was abandoned after an outcry that it would have raised seniors' Medicare premiums and cost Medicare millions more for prescription drugs.
According to The Hill, Congress may actually have to step up and take action now that the White House agenda has fizzled. Cutting drug prices has become a bête noire for the president with action stalled on both fronts, particularly since Alex Azar, secretary of Health and Human Services, has been pushing the rebate plan for months.
Meanwhile, drug prices are still on the rise.
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According to data from Rx Savings Solutions that puts the price increases on more than 3,400 drugs at five times the rate of inflation just in the first six months of this year—a average of 10.5 percent each.
The rebate plan, according to HHS, was supposed to lower prices for prescription drugs and out-of-pocket costs by pushing manufacturers to discount products directly to consumers at the point of sale instead of going through pharmacy benefit managers. While the drug industry supported the move, PBMs did not.
Nor did AARP or the health insurance industry, especially since the White House's own actuaries found that such a move would, instead of lowering prices, actually increase senior citizens' Medicare premiums and end up costing the government an extra $180 million for what Medicare would have to fork over in increased prices on prescription drugs.
“The withdrawal [of the proposed rule] puts even more pressure on Congress to step up to the plate,” Senate Finance Committee Chairman Chuck Grassley, R-IA, said, as reported in The Hill. “It's time for Congress to legislate and deliver on our promise to lower health care costs for Americans.”
Senator Ron Wyden, D-OR, has been working with Grassley to come up with a mutually acceptable plan, something they claim to be close to. “It's going to have to be Congress,” he said. ”What is inescapable, is that that decision [abandoning the rebate elimination proposal] drives home how important it is for Congress to step up and deal with these skyrocketing prices.”
While other proposals have been voiced—tying the price paid for drugs in the U.S. to the prices paid in other countries, for instance, or importing drugs from other countries—it remains to be seen whether any plan will materialize in time to be used as a campaign tool for the 2020 election.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
