President tackles prescription drug costs

President Donald Trump and HHS Secretary Alex Azar unveiled the chief executive’s Blueprint To Lower Drug Prices (titled “American Patients First”).  The President called out PhRMA manufacturers but also didn’t ignore the middle-man in his comments, stating PBMs contribute to increasing drug prices and any solution to this issue must address PBMs rule.   Below are highlights of issues addressed by the President and Azar.

DIR Fees:  The Administration is attacking retroactive fees in all directions.  First, the Blueprint outlines the Administration’s intent to address rebates head on.  In fact, Secretary Azar specifically stated at the May 11 press conference that HHS is looking into getting rid of all rebates and going to a flat price which would effectively take away incentives for PBMs to make more money.  The proposal also focuses on ongoing efforts to require applying all pharmacy price concessions, aka DIR fees, to the price of a drug at the point of sale.  (WVPA Executive Director Richard Stevens has requested this pricing method to West Virginia’s congressional delegation and HHS.)

Fiduciary Feedback:  The President is also seeking feedback on requiring Pharmacy Benefit Managers to act in the best interests of payers.   WVPA joined the National Community Pharmacy Association in requiring Congress to implement more regulation and transparency of PBMs.

Gag Clause:  The President’s plan calls for immediate action to prohibit “gag clause” in Part D contracts.   Pharmacists have been unable to inform patients that they could pay less out-of-pocket by not using insurance.  Prohibiting this action is a win for pharmacies worried that their PBM will retaliate against the pharmacy for looking out for the best interests of the patient.

WVPA had legislation passed in the 2018 West Virginia Legislature allowing pharmacists to inform their patients of lower-cost alternatives, thus eliminating the “gag clause” in West Virginia.  “My wife witnessed the benefit of this new law recently after her pharmacist informed her of $18.50 prescription drug cost compared to the $140.80 charge by the PBM,” said Stevens.

Secretary Azar, a former pharmaceutical manufacturer CEO, said he plans to ask HHS’s inspector general to investigate price concessions that PBMs retroactively charge pharmacies during testimony before the Senate Appropriations subcommittee, referring to PBM-owned pharmacies.