Tuesday marked the 100th day since President Trump released his drug pricing blueprint, and to commemorate the event, the Trump administration released a report that outlines the administration's actions and policy changes related to prescription drug prices.
The report—authored by Dan Best, senior advisor to the HHS secretary for drug pricing reform—is based on data from HHS' Assistant Secretary for Planning and Evaluation. The report stated that the data show "clear evidence that drug company behavior has changed dramatically since the release of the blueprint's proposals."
The report stated that since Trump released the blueprint on May 11, "HHS has taken dozens of actions on the four strategies contemplated in the blueprint: increased competition, better negotiation, incentives for lower list prices, and reducing out-of-pocket costs." According to the report, HHS' "actions have helped bring into focus a vision for a more competitive pharmaceutical marketplace," and "pharmaceutical manufacturers, pharmacy benefit managers, and other actors in the market have indicated that they recognize the scale of disruption this would involve."
For instance, the report notes that since Trump released the blueprint, a total of 15 pharmaceutical companies have reduced the list prices for their drugs, reversed planned price increases, or pledged to freeze prices for their products for the rest of this year. The report noted that, overall, there were:
- 60% fewer price increases for brand-name drugs from May 11, 2018, through August 15, 2018, when compared with the same period in 2017; and
- 54% more price decreases for brand-name and generic drugs from May 11, 2018, through August 15, 2018, when compared with the same period in 2017.
The report stated that HHS also has taken actions intended to provide incentives for drugmakers to lower list prices for their products. For instance, the report noted that CMS has "made significant changes to its Drug Pricing Dashboard, highlighting the individual drugs with the highest price increases in Medicaid, Medicare Part B, and Medicare Part D, and, for the first time, the manufacturers responsible."
According to the report, HHS also has sent language to Congress that would eliminate a cap on the Medicaid Drug Rebate Program's inflation penalty, and Rep. Michael Burgess (R-Texas) has since introduced legislation to remove the cap.
Lowering out-of-pocket costs
The report stated that HHS also has taken steps to lower out-of-pocket costs for U.S. consumers. For example, the report noted that CMS "within two weeks of the blueprint's release" warned health insurers "that it is unacceptable to impose" so-called pharmacy "gag clauses."
According to the report, HHS also has sought to:
- Reduce Medicare payments "for certain new drugs"; and
- Reduce payments for drugs under Medicare's 340B drug discount program.
The report stated that the blueprint also has spurred increased competition in the U.S. drug market by accelerating FDA approval of generic drugs. The report stated, "In July, FDA approved more generic drugs than in any single month in its history."
Further, the report stated that HHS has launched its first-ever working group to review whether the United States can safely import drugs from other countries to address price hikes for certain drugs.
The report also noted that CMS has taken actions to increase the government's power to negotiate the prices of drugs covered by Medicare and Medicaid. Specifically, the report stated that CMS "has given Medicare Advantage new tools to negotiate lower prices for expensive Part B drugs," has "provided new guidance to help insurers and drug companies share information earlier to reach better deals for patients, solicited comment on ways to use private-sector competitive acquisition for Medicare Part B drugs, and approved a first-of-its-kind waiver for a state to negotiate value-based contracts with drug makers."
More to come
The report stated that "the most significant parts of [Trump's] blueprint are largely still in the works." For instance, the report noted that HHS is:
- Examining whether the federal government can require drug companies to include prices in direct-to-consumer television advertisements;
- Working to reform the rebate system currently used by drugmakers, insurers, and pharmacy benefit managers; and
- Working to increase Medicare Part D's power to negotiate drug prices.
HHS Secretary Alex Azar in a release said the report shows that Trump's "blueprint for lower drug prices is working, drug prices are coming down, and American patients are going to see the savings in their pocketbook."
During a call with reporters Monday, Azar added that the changes detailed in the report are "the tip of the iceberg." He said, "The industry and Congress can and should take specific action in the months to come."
Meanwhile, some observers said the report detailed changes that might not have come about because of the blueprint. For instance, Politico's "Pulse" reports that FDA began working to speed its drug approvals under former President Barack Obama. In addition, observers have raised doubts that pharmaceutical companies' actions to reverse and halt price increases, as well as those to decrease some drug prices, will have significant effects on the prescription drug market (Luthi, Modern Healthcare, 8/20; HHS report, 8/20; HHS release, 8/20; Florko, Inside Health Policy, 8/20 [subscription required]; King, Washington Examiner, 8/20; Diamond, "Pulse," Politico, 8/21).
Learn more: How you can save money on your employees' drug cost
To learn more about how you can save money on your employees' drug cost, view our infographic on how pharmacy can help reduce employee benefit costs.