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Biden director announced ‘comprehensive plan’ to correct high drug prices


Marty schleden

Last week, the US Department of Health and Human Services plan to deal with high drug prices as part of President Joe Biden’s pledge to anti-competitive practices throughout the economy.

However, while he went into detail about the abuses by drug companies, he was much more superficial about the practices of much larger companies that acted as pharmaceutical intermediaries and as some of the larger companies. insurance of the country. ..

The “Comprehensive Plan to Tackle High Drug Prices” report was prepared by the HHS on Thursday by the White House Competition Council, pursuant to Biden’s July 9 executive order to promote competition in the US economy.

The board held its first meeting last Friday.

The report points out that the $ 370 billion drug market is affected by rapidly rising prices. Organization for Economic Co-operation and Development, A group of 38 members, mainly from developed countries.

“Americans pay a lot of money for prescription drugs,” he says. “We pay the highest prices in the world. This leads to higher expenses. As spending increases, private and government payers are pushing to increase premiums and reduce the generosity of benefits. Lack of affordable access to prescription drugs and other medical services leads to poorer health outcomes. “

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Most of the solutions he offers deal with abuse by manufacturers.

For example, there is a practice called “deferred payments” in which manufacturers of brand-name drugs with exclusive market access pay generic competitors to maintain prices by delaying competition between products.

The report also suggests ways to boost the production of generic and biosimilar drugs and reduce costs through direct negotiations between big programs like Medicare and the companies that make them. to augment.

However, this report is much lighter on suggestions on what to do with pharmacy benefit managers, the middlemen who handle the transactions. Its market is dominated by three companies, one of the 15 largest companies in the country and also a major player in insurance and pharmacies.

The discount that a company known as PBM is negotiating with the manufacturer is to increase the list price of brand name drugs, and it is also suspected that the companies play a major role in maintaining the prices of generic drugs. Artificially expensive.

Critics say the lack of transparency in PBM rebate negotiations makes them believe companies are making big profits at the expense of everyone else.

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“We’ve been working for years to clarify our supply chain,” said James Gelfand, senior vice president of ERIC, a leading employer group that insures 10 million people last month. Said in an interview. “You have a pharmaceutical company. It tells us the number of drug costs. But by the time it comes to us, where does this number come from and why is it that? No one can explain if this is a number, so I did my best to pull out the onions and understand better. “

PBM says it is using its influence to lower consumer prices.

The HHS report released last week recognizes the importance of PBM in drug prices.

Citing suspicious practices by pharmaceutical companies, the report states:

“PBMs use their market power to collect fees from independent pharmacies. The three PBMs that handle 77% of prescription claims are integrated with the major health insurance companies, one of which is also the largest drugstore / play-by-mail chain. Companies in the pharmaceutical supply chain currently have little or no incentives to reduce drug costs and challenge anti-competitive behavior. “

Despite these concerns, the report does not support scrutiny by distrust-breaking agencies such as the Federal Trade Commission or the Department of Justice Antitrust. However, he mentions a transparency initiative.

Medicare and Medicaid service centers in the United States are asking PBM, the leading health insurance company in the ACA market, to provide discounts and other information. “Data collection from PBM is expected to start in 2022,” he said.

Marty Schladen is a reporter for the Ohio Capital Journal, a sister site of Pennsylvania Capital Stars. Where this story first appeared.

Biden director announced ‘comprehensive plan’ to correct high drug prices

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