White House Budget is Positive for Patients, Plans and PBMs

Feb 9, 2018

Media reports are circulating with details about the Fiscal Year 2019 budget that President Trump will release on Monday. In support of this, the Council of Economic Advisors (CEA) has prepared a white paper that reviews policy options to lower prescription drug costs for Americans. With varying levels of details on each policy, there’s a lot for patients, plan sponsors and regulators to like about these proposals. Few would question the central theme of the white paper – that America has too many examples of irrational drug prices – but few will agree on how precisely to solve it. Some of the policies being discussed that impact prescription drug purchasers include:

  • The Medicaid Best Price program may be causing drug makers to inflate drug prices in the commercial market. Reforms could prevent this cost shift.
  • CMS should provide guidance on how to lawfully execute value based purchasing programs, like Express Scripts SafeguardRx programs, in government-funded programs. This shifts toward paying for value and increases competition.
  • Among ideas to put competitive pressure on makers of drugs administered in a physician’s office is moving Medicare Part B drug coverage into Medicare Part D.
  • Lowering drug costs in Medicare Part D by: Removing the requirement to cover two drugs per class, sharing drug maker rebates with patients at point of sale, freeing plans to negotiate formularies differently, lowering generic drug copayments, promoting plan designs that don’t hasten catastrophic coverage.
  • Enhancing competition is key, but the CEA misinterprets a University of Southern California study. USC Schaeffer Center for Health Policy and EconomicsThat’s correct – drug manufacturer profit is 10x that of PBMs. While increasing competition among the supply chain is important, this must include manufacturers, PBMs, wholesalers, pharmacies, and others. PBMs actually decrease the overall cost of healthcare. Nowhere is this clearer than in our 2017 Drug Trend Report.
  • Quicker FDA approval times for second or third to market drugs in a class will increase competition and lower prices. Myriad other FDA reforms are considered that would ease the burden to innovate and have new drugs approved, bring generic drugs to market faster, and speeding up final guidances around biosimilars.

Time will tell what of this proposal, if anything, is enacted into law by Congress. But, in the meantime, Express Scripts will continue to promote many of these same policies to lower prescription drug costs for Americans.

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Lab Staff
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