Physician group: Let Medicare negotiate drug prices

ACP calls for several federal regulations

The American College of Physicians (ACP) on Tuesday published a position paper urging the federal government to rein in rising prescription drug prices, Alison Kodjak reports for NPR's "Shots."

In the paper, published in Annals of Internal Medicine, ACP notes that the United States is the only member of the Organization for Economic Cooperation and Development that does not impose government regulations on drug pricing.

Among other proposed reforms, ACP says the U.S. government should:

  • Allow Medicare to negotiate prescription drug prices with drugmakers;
  • Re-import prescription drugs from other countries, where they often are sold at lower prices;
  • Require drugmakers to disclose actual research and production costs for drug development and manufacturing; and
  • Require drugmakers to disclose the prices of drugs that were developed using research funded by the federal government.

ACP President Wayne Riley said the organization "strongly" believes that "drugs that came to market and made it through the [research and development] process with support of the NIH grants or [Veterans Affairs] grants ... should be particularly compliant with more transparency."

Here's how PhRMA is pushing back against drug price outrage

Reaction

Ed Schoonveld—who heads the market access and pricing division of ZS Associates, which consults with drug companies on pricing—say, "Making [drug pricing] more transparent will make it more clear, but it will have a negative effect on competition."

Schoonveld noted that it is important for physicians to take part in the pricing discussion because insurers are looking to cut costs by limiting access to drugs, which may not be in patients' best interest. However, he said the reforms for which ACP is advocating might not make a difference in drug pricing practices (Kodjak, "Shots," NPR, 3/29).

How Houston Methodist reduced the effect of drug costs on revenue

 Houston Methodist Health System faced high drug costs that drained overall hospital revenue. Executives challenged the pharmacy and business office teams to mitigate the impact. Using Revenue Cycle Compass dashboard, Houston Methodist was able to go beyond traditional analytics to show what pharmacy costs could be reimbursed or covered by copay assistance, significantly offsetting initial drug cost.

Executive hospital leadership also created three new FTE reimbursement coordinator positions to identify the best payment solutions with patients pre-treatment, discuss out-of-coverage treatments with physicians, and work with the insurance predetermination process to navigate one-off cases. In just three years, Houston Methodist saved over $522K.

Download the case study


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