Nov. 20: HHS, FDA Take Steps to Lower Prescription Drug Prices

This week, the Trump Administration took several major steps to lower the cost of prescription drug prices, reflecting a commitment to put American patients first.

In three different actions, the Administration has worked towards implementing the President’s July 24, 2020 Executive Order on "Lowering Prices for Patients by Eliminating Kickbacks to Middlemen;" cutting down on foreign freeriding through the Most Favored Nation Model; and announced the end of the Food and Drug Administration’s Unapproved Drugs Initiative (UDI), a program that drug companies had used to jack up prices on older drugs.

The Administration finalized a rule to bring drug discounts directly to seniors at the pharmacy counter and eliminate the current system of drug rebates to middlemen.

The Administration also announced the Most Favored Nation Model, a prescription drug payment model to put American patients first.

Additionally, HHS announced a notice published in the Federal Register announced the withdrawal of guidance documents issued as part of the Unapproved Drugs Initiative.

Here is a fact sheet from HHS on all of the actions taken to lower prescription drug prices.

A report commissioned by the PBM industry group Pharmaceutical Care Management Association (PCMA) said that the rule would also hike federal spending and is unlikely to lower prices.

Payers and PBMs are worried that the rule would remove a key negotiating tool that they have with drug companies to ensure lower prices. In turn, the pharmaceutical industry has been a major proponent of the rule.  Rebates have generated PBMs and insurers a lot of money. A 2018 analysis from the consulting firm Altarum found that insurers got $89 billion in rebates from drug companies in 2016.

Insurers, PBMs and providers have reignited their vociferous opposition to the rule, which can be finalized before the incoming Biden administration on Jan. 20.

The Coalition for Affordable Prescription Drugs — a lobbying group that includes unions, employers and PBMs — slammed the rule in a statement in a prelude to the opposition the final rule will face.

“Rushing one of the most expensive regulations ever through an opaque and extremely irregular review process in the waning days of the Administration is a shortsighted decision — one that will have lasting and serious consequences for America’s seniors,” the group said.

The group urged the incoming Biden administration and Congress to overturn the rule. The Campaign for Sustainable Rx Pricing, a group that includes major payers and providers, added that it will also turn to Congress and the incoming administration to "halt and reverse implementation of this disastrous policy."

PCMA said in a statement Friday that it is exploring litigation options to challenge the rule in court.