The top of Trump administration health One official asked Congress Friday to adopt his new prescription drug reduction plan and offer it to all patients, not just those covered by government programs such as Medicare.
The plan would take discounts now hidden among industry players, such as drug companies and insurers, and send them directly to consumers when they would pay for their medications.
Patients with high drug percentages will benefit from this proposal, while those who do not use prescription drugs, or who use primarily generic drugs, would probably pay a little more because premiums are expected to increase.
One day after unveiling the plan as a proposed regulation, Secretary of Health and Social Services Alex Azar increased the stakes by calling on Congress to legislate and expand to include those covered by the employer health insurance, not just the Medicare and Medicaid beneficiaries.
"Congress has the opportunity to respond to its calls for transparency (…) by immediately adopting our proposal and extending it to the market for commercial medicines," Azar said in a speech to the group of Bipartisan Policy Center reflection.
In advance of next week State of the Union speech, president Donald Trump is under political pressure to show the results of its promise to reduce prescription drug costs. The data shows that prices of the original drugs have continued to increase, but at a slightly slower pace. Polls show that consumers from all walks of life want government action.
Democrats say that the administration plan does not go far enough, as it still leaves pharmaceutical companies free to set high list prices. They say that the price of drugs is like a black box and that it is impossible to say whether prices reflect real costs or whether companies charge what the market will support, they say.
Speaker of the House of Representatives, Nancy Pelosi, D-Calif., Has expressed concern that the plan will increase premiums. HHS recognizes that Medicare prescription premiums would increase by $ 3 to $ 5 a month.
Nevertheless, the administration's proposal seems to be on the way as Congress prepares to develop legislation on prescription drug costs. On Friday night, the Republican Chairman of the Senate Committee on Health, Education, Labor and Pensions expressed his support. The rebates "should reduce the costs borne by patients, and this is a good first step towards that goal," said Senator Lamar Alexander, R-Tenn., In a statement.
The complex plan would work by removing an exemption from federal anti-bribery rules that currently allows drug manufacturers, insurers and intermediaries, called pharmacy compensation managers, to negotiate discounts between themselves.
Pharmaceutical companies pay discounts to ensure that their drugs are covered by insurance plans that mediate between them and their patients. According to HHS, hidden discounts can account for up to 30% of the current price of a drug. Insurers say they use money rebates to contain the premiums of all consumers.
As part of this plan, the current rebate exemption for industry rebates would be replaced by a new one for rebates offered directly to consumers.
Azar said the idea would change the drug pricing system from hidden discounts to initial discounts, putting pressure on drug manufacturers to keep prices low. The proposal was co-written with the Office of the Inspector General of HHS.
Experts say that it will take time to resolve all the potential consequences.
Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York City, said the current discount system is hurting patients who take expensive drugs with high copay rates.
Think about people with cancer, patients with incurable diseases such as multiple sclerosis or rheumatoid arthritis, and those who take brand name drugs without generic competition. Patient cost sharing is often based on current prices, not on the cost of the drug after discounts.
"In simple terms, those who do not take any medicine will see their premiums go up and will not save because they do not take any medicine," Bach said. "Those on generics only can be essentially in this category (too).
"But those who take expensive drugs … they will see total savings," he added. According to a report from Express Scripts, more than half a million people have consumed at least $ 50,000 in prescriptions in 2014.
Insurers and drug benefit managers, such as Express Scripts and CVS, oppose the plan of administration, saying it would hurt their ability to negotiate with drug companies at lower prices.
Drug manufacturers have applauded the action of the administration.
Consumers are worried about the prices of the original drugs, especially new drugs promising decisive results. Generic drugs account for almost 90% of prescriptions dispensed, but branded drugs account for more than 70% of expenditures.
Azar says that in the current system, everyone except the patient benefits from high prices. A high catalog price gives way to larger negotiated discounts for insurers and intermediaries. And drug manufacturers are content to integrate this expectation in their prices.
Before joining the Trump administration, Azar was one of the leaders of drug maker Eli Lilly. This has led to criticism that he would be a pawn of the industry. But drug makers vehemently disagree with some of his ideas, including an experiment using lower international drug prices to cut some Medicare costs.