Insurers Are Concerned About Trump's "American Patients First" Blueprint

From RADAR on Medicare Advantage

The White House on May 11 unveiled its "American Patients First" blueprint that Trump in a press conference referred to as the "most sweeping action in history to lower the price of prescription drugs to the American people."

"The good news is that there is an acknowledgement that there is a problem and that a lot of it stems from the non-transparency of what drugs really cost and that the PBMs are sort of in the middle...making money [through rebates], but it does not actually provide any answers for it," says Deb Devereaux at Gorman Health Group.

HHS’s list of potential "immediate actions" included:

• Allowing Part D plans to adjust a formulary or benefit design during the benefit year "if necessary" to address price increases for single-source generic drugs.

• Giving Part D plans new flexibility to use private sector tools to better negotiate for high-cost drugs.

• Issuing a report to the president identifying particular Part B drugs or classes that could be moved to Part D for increased savings.

• Prohibiting Part D contracts from including so-called pharmacy gag clauses.

America's Health Insurance Plans (AHIP) expressed anxiety about potential changes to rebate requirements. "Requiring drug rebates to be passed through to Medicare patients at the pharmacy counter would likely lead to higher drug prices from manufacturers, and would lead to higher premiums for seniors, as well as $40 billion in additional costs for hardworking taxpayers," AHIP wrote in a statement.

Though some minor items in the blueprint would be positive for beneficiaries, Devereaux suggests that the idea of moving some Part B drugs into Part D may not be feasible, since many high-cost oral specialty drugs are already being adjudicated at the pharmacy. The plan also left out one major issue that was part of Trump's campaign promise— direct negotiation between the government and drug manufacturers.

Pembroke Consulting, Inc. President Adam Fein, Ph.D., argued that direct negotiation is a "fashionable" but unworkable concept, pointing out that any savings from direct negotiation would need to come from much more aggressive restrictions than those currently used by Part D plans.

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