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  • Washington Highlights

    HHS Releases Report to Address High Drug Prices


    Mary Mullaney, Director, Hospital Payment Policies

    The Department of Health and Human Services (HHS) released a report, “Comprehensive Plan for Addressing High Drug Prices,” on Sept. 9 in response to the July 9 executive order on competition in the American economy (executive order 14036) [refer to Washington Highlights, July 16]. The proposal seeks to foster innovation, increase competition to reduce drug spending in the health care system, and improve patients’ access to affordable medications.

    The report outlines both legislative and administrative actions to lower drug pricing. Proposals that would require legislative action include:

    • Allowing Medicare to negotiate prices for certain Medicare Part B and D prescription drugs and make these prices available to commercial plans and employers.
    • Capping catastrophic spending in Medicare Part D.
    • Slowing drug price increases on existing drugs, prohibiting “pay-for-delay” agreements, and shortening exclusivity periods on biosimilar and generic drugs.

    HHS would use administrative authority to test value-based payment models in Medicare Part B; collect data from insurers and pharmacy benefit managers to improve transparency about prices, rebates, and out-of-pocket spending on prescription drugs; and promote transparency and efficiency in the generic drug approval process. 

    HHS also reiterated its support for the 340B Drug Pricing Program in the report.