Can anything be done to bring down prescription drug costs?

Photo (c) M.J. Prototype - Getty Images

Congress is working on it but it could be a long process

The Senate Health, Education, Labor and Pensions (HELP) Committee went to work this week to find a bipartisan consensus on measures to reduce prescription drug costs.

As you might expect, things got off to a bumpy start as things often do in Washington these days. In this case, Republicans accused Democrats of going back on promises they made when they were working out the framework of the various bills they plan to consider.

In December, Congress for the first time allowed Medicare to negotiate the prices of some drugs with major drug companies. Since Medicare is such a huge customer, it is hoped that the price Medicare pays will filter down throughout the system.

But Chris Blackley, CEO of Prescryptive, a healthcare technology company, says some additional steps will probably be necessary before consumers see lower prices.

“There are still practices that the prescription drug middlemen – pharmacy benefit managers (PBMs) – partake in that will continue to drive up prices,” Blackley told ConsumerAffairs. “As long as PBMs are controlling market access for affordable options and inhibiting competition through practices like spread pricing, verticalization, and bundling, drug costs will not go down.”

This may take a while

Jayne Hornung, a registered pharmacist, is the chief clinical officer at MMIT, a global pharma intelligence provider. She strikes a more optimistic tone but agrees that consumers probably won’t see lower prices for a while.

“The success of this program remains to be seen, but it has the potential to significantly impact drug pricing and out-of-pocket costs for Medicare patients,” she told us.” It is important to note that not all drugs will be subject to negotiation – it only applies to certain high-cost drugs.”

Among the bills Congress is trying to consider, Hornung says a House bill, HR 2148, could have a significant impact. It would establish a series of oversight and disclosure requirements for the prices of brand-name drugs. 

“The legislation would require the Department of Health and Human Services (HHS) to review all brand-name drugs annually for excessive pricing,” Hornung said. “If this review finds that any brand-name drugs are excessively priced, HHS will have to do three things: void any exclusivity the government has granted to the drug; issue open, nonexclusive licenses for the drug; and expedite the review of applications for generic drugs and biosimilars."

What’s considered excessive? A drug’s price is considered excessive if the average domestic manufacturing price is higher than the median price for the drug in Canada, the United Kingdom, Germany, France, and Japan. 

However promising the legislation might be, Hornung says the bill has been stalled in the House for over a year.

What about PBMs?

There’s spirited debate within healthcare circles about the impact of PBMs on prescription drug prices. Blackley says there needs to be more transparency and accountability and expects legislation to accomplish that will be introduced this summer.

“Additionally, the practices of PBMs are being investigated by the Federal Trade Commission (FTC), and a PBM reform law is expected in the near future,” he said. "These have all opened the door to lowering the costs of prescription drugs.”

The Pharmaceutical Care Management Association (PCMA), a national association representing America’s PBMs, rejects the charge that its industry is responsible for high drug prices. It says “Enabling a robust private prescription drug marketplace that promotes competition is the best way to drive down prescription drug costs and make more affordable alternatives available for patients.”

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