Four big questions about Trump’s drug price plan.Healthcare analysts and industry groups still don’t know what to expect from the Trump administration’s plan to combat high drug prices, a week after the president announced what he deemed the “most sweeping action in history to lower the price of prescription drugs.” Trump’s blueprint laid out a series of proposals, but details for several are sparse, and no concrete regulations have been proposed yet. Here are the four biggest questions surrounding the plan:
- Will getting rid of rebates lead to lower prices? Drugmakers and middlemen called pharmacy benefit managers currently negotiate over rebates to drugs’ list prices, but critics say that not enough of the rebates are not being passed onto customers. So HHS Secretary Alex Azar has suggested a move to fixed price discounts, which reduce the list price by a certain amount, either through a flat fee or a percentage. But competition can drive prices down and sometimes it can drive prices up “because you don’t want to make any less than what the guy across the street does,” said Kelly Brantley, vice president of health research firm Avalere.
- Which drugs will move from Part B to Part D? This part of the blueprint drew the sharpest rebuke from the pharmaceutical industry, but there are many unanswered questions on how it would be applied. Medicare Part D is the program’s prescription drug plan. PBMs and insurers represent seniors and negotiate with drugmakers for rebates. The plan calls for moving some drugs from Part B to Part D, with the hopes that private plans could negotiate with drugmakers for lower prices. But the administration hasn’t given any details on how many or which drugs could be shifted.
- Will Trump’s plan give lagging efforts in Congress a boost? Most of the blueprint can be handled through administrative actions, bypassing the need for congressional action. That may be for the best, as drug price bills haven’t had much success in Congress lately. But after Trump’s speech, some stalled efforts got a shot in the arm. For instance, House Speaker Paul Ryan said at an event last week that there is momentum for the Creates Act, which aims to clamp down on drug makers that block generic competition. Ryan said committees are in the work on a compromise version of the bipartisan bill, which hasn’t advanced in either chamber.
- Coming soon to a TV ad near you: list prices? The blueprint includes a proposal to require drugmakers to include the list price for any drug in any direct-to-consumer ad. The proposal has created a host of questions for the Food and Drug Administration, including whether it legally can mandate the requirement to whether it would have any effect on prices. The U.S. is the only country in the world that allows TV advertising for drugs. The FDA currently goes after drug ads that are misleading or gloss over important details about side effects. But it does not require companies to add the list price.