By ROBERT PEAR The New York Times
Posted: June 17, 2018 at 4:17 a.m.
·
WASHINGTON -- In his effort to bring down
prescription drug prices, President Donald Trump is testing the limits of a law
that prohibits the government from interfering in negotiations between drug
manufacturers and the insurance companies that provide drug coverage to more
than 42 million people on Medicare.
The prohibition was adopted 15 years ago when a
Republican-controlled Congress added drug benefits to Medicare, and since then
Republicans have repeatedly invoked it to quash Democratic demands for the
government to rein in drug costs.
But now, with prices of new drugs often topping
$10,000 a year, Trump has unveiled a blueprint to lower drug prices, and some
of his ideas envision a larger role for the government.
He wants to require insurers to reduce retail
drug prices to reflect the discounts they receive from drug manufacturers.
These discounts often take the form of rebates paid to insurers and middlemen
known as pharmacy benefit managers.
Trump takes further aim at those rebates by
suggesting that Medicare should "restrict or reduce," or perhaps even
prohibit, their use. Administration officials have said that the rebates, which
are a common feature of contracts in the pharmaceutical industry, could be
viewed as illegal kickbacks because they reward an insurer for increasing the
sales of a drugmaker's products.
The White House blueprint suggests that it might
be better to require a fixed price for a drug, rather than rebates, in
contracts between drugmakers and the insurers that offer Medicare's prescription
drug plans.
Critics say that is exactly the type of
interference Congress wanted to prevent.
Under the president's proposal, Medicare would
"dictate the details of pricing arrangements between the parties" --
details that, under the Medicare law, are supposed to be worked out in
negotiations between drug manufacturers and prescription drug plans, said Wendy
Krasner, a vice president of the Pharmaceutical Care Management Association,
which represents drug benefit managers like Express Scripts, CVS Health and
OptumRx, a unit of UnitedHealth Group.
Medicare officials "may not interfere in
those negotiations," she said, and "this free market approach is
generally credited for the overwhelming success" of the drug benefit
program, known as Part D of Medicare.
The 2003 law that created the Medicare drug
benefit says that the secretary of health and human services "may not
interfere with the negotiations between drug manufacturers and pharmacies and
[prescription drug plan] sponsors" and may not establish "a price
structure" for the reimbursement of prescription drugs.
This provision of the law, the
"noninterference clause," is central to the free market approach
Republicans took when they added drug benefits to Medicare. The benefits are
delivered entirely by competing private plans that try to keep costs low by
negotiating with pharmaceutical companies to obtain discounts in the form of
rebates, which can exceed 25 percent of the list price of a drug.
Premiums for drug coverage, which average about
$35 a month for a standard Part D plan, and the overall cost of the drug
program ($94 billion last year) are below the original estimates, and surveys
show that beneficiaries are generally satisfied with the program.
Trump has shown no particular commitment to the
principle of noninterference. As a presidential candidate, he broke with his
party and said the federal government should use its buying power to negotiate
lower drug prices for Medicare beneficiaries -- an idea long favored by
Democrats. As president, he has backed away from that proposal, saying he wants
to give private plans more tools to negotiate, under new federal rules and
requirements.
Drug companies lobbied Congress to include the
noninterference clause in the 2003 law. And they have often cited it in
resisting Democratic proposals that call for the government to negotiate lower
prices for Medicare beneficiaries. But now drugmakers want the government to
require Medicare drug plans to share a minimum percentage of negotiated rebates
with patients.
This, they say, would immediately reduce
out-of-pocket costs for Medicare beneficiaries at the pharmacy counter. Such a
change would also reduce the political pressure on drug manufacturers, which
are often blamed for high drug prices.
Medicare officials have "clear statutory
authority" to require insurers to pass on some of the savings they receive
to Medicare beneficiaries, says the Pharmaceutical Research and Manufacturers
of America, a trade group for drug companies.
Under federal law, the group says, Medicare drug
plans must provide patients with "access to negotiated prices," and
the government can specify how much of any rebates must be included in those
prices.
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Section on 06/17/2018
http://www.nwaonline.com/news/2018/jun/17/trump-s-drug-cost-plan-tests-03-law-201/
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