A response on the Trump Administration’s idea of lowering drug prices

A response on the Trump Administration’s idea of lowering drug prices

From TheHill.com: Trump officials make new moves to lower drug prices


I have no reasonable argument against the elimination of the prescription drug discounts and rebates that are contractually required by the pharmacy benefits managers (PBM) and have those funds redirected into patient discounts at the pharmacy counter. The patient out-of-pocket costs would effectively go to zero for the vast majority of common prescription drugs. Additionally, the wholesale acquisition price (WAC) would go down for the PBM and Health Plan. This approach would likely generate meaningful savings for consumers and the overall healthcare system without Pharma taking a massive margin hit. Of course, the savings are coming from somewhere, and in this case, it is the PBMs and Health Plans that will take a hit to their bottom lines.

However, if these changes move forward, I believe the new reality will consist of the PBMs raising patient’s prescription co-pay amounts to such extent that they are equal to the discounts provided by the Pharma company. This will have a net-net effect of little to no difference in the overall cost of prescription drugs. The PBMs would still be effectively taking the current system of drug discounts and rebates paid by Pharma to their bottom line.

I will say that this is a start to prescription drug price reform and Pharma must come to the table with reasonable concessions. But Congress and the Administration need to spend time taking a more in-depth look into the PBM and Health Plan relationships in addition to the big Distribution companies pricing models. Every player wants a piece of the prescription drug price pie, and they all need to be part of a sustainable solution that lowers the effective cost of healthcare.

As a side note, I feel that many consumers believe that Pharma loves the PBMs and the discount/rebate contracts that must be put in place to get drugs on formularies. That has not been my experience, granted an n=1, but the relationships between Pharma and PBMs are generally considered professional but not “friendly” by any stretch of the imagination. PBMs and the Health Plans hold a lot of cards in this game.

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