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  • Washington Highlights

    White House Releases Drug Pricing Plan and RFI

    Jason Kleinman, Senior Legislative Analyst, Govt. Relations
    Mary Mullaney, Director, Hospital Payment Policies

    President Trump May 11 released the outline of his Administration’s plan to lower prescription drug prices, titled “American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.” The Department of Health and Human Services (HHS) May 14 issued a Request for Information (RFI) on the blueprint seeking suggestions to improve the affordability and accessibility of prescription drugs. Responses are due by July 16, 2018.

    The blueprint outlines the Administration’s priorities to tackle the problem of rising prescription drug prices. It identifies four (4) main strategies that HHS may use in order to decrease drug prices – increased competition, better negotiation, incentives to lower list prices and lower consumer out-of-pocket costs. Highlights of the blueprint are below.

    The RFI specifically solicits stakeholder feedback on the 340B Drug Pricing Program. HHS is seeking feedback on program concerns such as program growth, program eligibility, and duplicate discounts. The RFI also requests feedback on general regulatory authority of the 340B Program, including implications of changing the definition of “patient,” covered entity contracts with pharmacies, and registration of off-site outpatient facilities.

    Blueprint Highlights

    Increased competition

    • Increase prescription drug competition and end the gaming of regulation processes that keep drug prices inflated.
    • Accelerate FDA approval of generics.
    • Remove the REMS (risk evaluation and mitigation strategies) loophole.
    • Promote competition in the biologics space and incentivize development of biosimilars.
    • Eliminate pay-for-delay loophole.

    Better Negotiation

    • Allow Medicare to negotiate prices under Part B and Part D
    • Explore the use of value based purchasing in federal programs, including indication-based pricing (many drugs are used off label) and long-term drug financing (mortgaging drug costs)
    • Revisit the Competitive Acquisition Program in Part B.
    • Remove protected classes in Medicare part D and only require one drug per category / class.
    • Site neutral payments for Part B drugs, physician administered drugs and difference in reimbursement between inpatient and outpatient settings.
    • Move some Part B drugs to Part D in an effort to decrease costs.

    Incentives for lowering list prices

    • Create new incentives to reward drug manufacturers that lower list prices or do not increase them.
    • Require manufacturers in include list prices in direct to consumer marketing.
    • Update Medicare’s drug pricing dashboard to hold drug makers accountable for price increases.
    • Reform rebates, including revisiting the safe harbor under the Anti-kickback statute for drug rebates
    • Reform Medicaid Drug rebate Program. Clarify the definition of brand and OTC medications and limit manufacturer rebates to 100 percent of AMP.
    • Reform 340B Drug Pricing Program. Potential change to definition of “patient.” Address duplicate discounts in Medicaid.
    • Change regulations impacting drug copay coupons.

    Lowering out-of-pocket costs

    • Lower out-of-pocket costs for consumers at the point of sale.
    • Apply rebates at point of sale.
    • Eliminate cost-sharing on generics for low-income Medicare beneficiaries.
    • Prohibit the pharmacy gag clause that prohibits pharmacists from informing consumers about lower OOP options.