Trump Administration Releases Blueprint to Address Drug Pricing Challenges
The Trump Administration has released a proposed blueprint for addressing challenges associated with drug pricing. The two-phased blueprint includes actions the president may direct the U.S. Department of Health and Human Services (HHS) to take immediately, as well as longer-term actions HHS could take, pending further evaluation and feedback.
The blueprint is focused on four primary areas: 1) Improved competition; 2) Better negotiation, 3) Incentives for lower list prices; and 4) Lowering out-of-pocket costs. Among the more immediate tactics proposed in these areas are:, preventing manufacturer gaming of regulatory processes such as Risk Evaluation and Management Strategies (REMS); adopting measures to promote innovation and competition for biologics; developing proposals to stop Medicaid and Affordable Care Act programs from raising prices in the private market; updating Medicare’s drug-pricing dashboard to make price increases and generic competition more transparent; and experimenting with value-based purchasing in federal programs.
Additionally, many of the immediate tactics also involve potential reforms to Medicare Part D, including allowing more substitutions to address price increases for single-source generics; giving plan sponsors significantly more power when negotiating with manufacturers; prohibiting Part D contracts from preventing pharmacists’ from telling patients when they could pay less out-of-pocket by not using insurance; and including information about drug price increases and lower cost alternatives in Part D explanation of benefits.
Looking further ahead, the blueprint proposes discussions around ways to encourage sharing of samples needed for generic drug development and additional efforts to promote the use of biosimilars. The blueprint also urges consideration of ways to further use value-based purchasing in federal programs, including indication-based pricing and long-term financing; removal of government impediments to value-based purchasing by private payers; mandating site neutrality in payment; and evaluating the accuracy and usefulness of current national drug spending data.
Other potential long-term tactics include restricting the use of rebates, including revisiting the safe harbor under the AntiKickback statute for drug rebates; adopting more measures to inform Medicare Part B and D beneficiaries about lower-cost alternatives; and providing better annual, or more frequent, information on costs to Part D beneficiaries. The Administration is also looking for ways to address foreign government threats of compulsory licensing or IP theft that may be harming innovation and development and driving up U.S. drug prices.
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