Caitlin Owens February 4,
2019
Health and Human Services
Secretary Alex Azar at the National Academy of Sciences last year. Photo: Alex
Wong/Getty Images
More transparency about the cost of prescription drugs is unlikely to
directly lower their price, experts say, poking a hole in a buzzy Washington
talking point.
Why it matters: "Transparency"
comes up often in discussions about how to lower drug prices. And though more
information is undoubtedly important, something has to be done with that
information to actually get costs down.
The big picture: We usually
don't know how much insurance plans end up paying for most drugs, and we also
don't know how much of a cut the system's middlemen keep for themselves.
Transparency efforts often focus either on illuminating how money moves through
the drug supply chain, or requiring drugmakers to justify hikes in their list
prices.
- This
information may have a shaming effect, but drug companies would still be
free to charge what they want. And consumers often have limited or no
ability to choose a cheaper drug.
- There
are exceptions — like the new ban that on "gag clauses" that
prevented patients from knowing when paying cash would be cheaper than
using their insurance. But so far those circumstances have been relatively
limited.
Yes, but: Transparency measures still
matters, because “it’s hard to come up with really reasonable solutions if
you’re really working in the dark," said Vanderbilt's Stacie Dusetzina.
- It
could help employers and insurance plans “understand where they could do a
better job squeezing out some of this excess profit," she said, but
ultimately "it’s necessary but not sufficient for reducing drug
prices.”
Details: A handful of
states have already passed laws requiring drug companies to report
the rationale behind their price spikes, but most don't do anything to actually
block or prevent those spikes.
- Maryland
passed penalties for "price gouging," but the law has
been found unconstitutional. The state has asked the Supreme
Court to hear the case.
- A Health
Affairs analysis of California's transparency law found that it
is unlikely to have much of an impact on drug spending unless it's paired
with additional incentives for consumers to use lower-priced drugs.
The bottom line: "Transparency
can help the public and policy makers make more informed decisions about what
to do about high drug prices - who to target, what policies to put in place,
etc," said Walid Gellad, a professor at the University of Pittsburgh.
"Just the transparency alone is unlikely to lower prices."
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