On September 9, 2021, the Biden Administration released a long-awaited plan aimed at reducing prescription drug prices.
What’s in the Plan?
At a high level, the plan would:
- Allow the Secretary of Health and Human Services (HHS) to negotiate Medicare Part B (physician-administered) and Part D (outpatient) drug prices directly with pharmaceutical companies and make those prices available in the commercial market.
- Include a redesign of the Part D to establish a beneficiary out-of-pocket (OOP) cap, increasing liability of Part D plans and drug manufacturers in the catastrophic phase.
- Levy an excise tax on drug manufacturers if the manufacturers raise the price of their products faster than the rate of inflation.
- Promote expanded use of generics and biosimilars.
- Test “value-based” payments in Part B to attempt to link payment for drugs to the clinical value they provide patients.
- Require data collection from insurers and Pharmacy Benefit Managers (PBMs) to improve transparency about prices, rebates, and OOP spending on prescription medications.
- Continue state- and Tribe-run drug importation programs.
What Do Patients Need to Know?
The full impact of the plan on patients is unclear. For example, lower list prices on drugs does not necessarily mean a patient’s co-pay or what they pay at the pharmacy counter will be less. But more concerning – because our healthcare system is a hodgepodge of federal, state, and local policy – this plan could have significant negative consequences for patients.
For example, according to an analysis by the Congressional Budget Office (CBO), if enacted, this plan would actually decrease the number of new therapies that would otherwise be available. This would likely have a disproportionate impact on patients with rare or orphan diseases and even cancer, who already face limited treatment options.
Another example: linking payment for drugs to the clinical value those drugs provide patients means that the measures a clinician finds valuable are considered. However, the patient perspective and what patients find valuable are not necessarily included in the evaluation.
What’s Next?
There is nothing new in President Biden’s plan. Many of the ideas are already in legislation that is being considered on Capitol Hill, and the Administration has already begun taking some steps on value-based payment modeling and additional transparency requirements for insurers and PBMs. But the path ahead for full enactment of these proposals is murky at best. It remains to be seen whether any substantive action will be taken by Congress, and whether the proposed administrative levers will have a meaningful impact on drug prices.
Policy Platform
The Patient Access and Affordability Project – a program of Patients Rising – has published a policy platform designed to create a healthcare system that empowers patients, advances medical innovation and reforms healthcare finance.
Some actions you can take right now include:
- Ask your Congressman and Senators to cosponsor H.R. 2163/S. 464, the Safe Step Act of 2021, which aims to improve step therapy protocols and ensure patients are able to safely and efficiently access the best treatment for them.
- Ask your Congressman to cosponsor H.R. 3173, the Improving Seniors’ Timely Access to Care Act of 2021, which would help protect patients from unnecessary delays in care by streamlining and standardizing the prior authorization program in Medicare Advantage.
- Ask your Congressman and Senators to cosponsor H.R. 4472/S. 373, the Better Empowerment Now to Enhance Framework and Improve Treatments (BENEFIT) Act of 2021, which would require the FDA to consider patient experience and patient-focused drug development data as part of the benefit/risk assessment of a new drug.
