Patients need transparency and relief from high drug costs, not defense of the status quo

By: John O’Brien , Senior Advisor to the Secretary for Drug Pricing Reform

Summary:

This proposal could usher in the single-biggest change to how drugs are priced at the pharmacy counter.

The current drug pricing system is broken and indefensible. Right now, everybody but the patient benefits as list prices climb higher and higher.

President Trump has proposed to bring transparency to the system, end the status quo of kickbacks from drug companies to middlemen and plans, known in the industry as “rebates”, and deliver those savings straight to patients and their pocketbooks.

This proposal would be a major step forward in bringing transparency to an opaque drug market that is currently built on hidden deals and payments that are not reflected in what the patient pays at the pharmacy counter. The government knows that rebates are paid on drugs representing 93% of Part D’s “non-protected class” spending. Patients need to know how much less they could be spending on high-cost drugs if these savings went to them. Incidentally, we’ve proposed via other rulemaking to give pharmacy benefit managers (PBMs) new tools to get better deals on “protected class” drugs, including tools specific to prices rising faster than inflation.