On the President’s Drug Cost Plan, Three Important Concerns

On the President’s Drug Cost Plan, Three Important Concerns

Part 1. Restricting access under Medicare Part D 

The Trump administration is out with its plan to lower the cost of prescription drug for America’s patients. The plan rightly rejects the flawed schemes we hear regularly from pundits and the media — importation and direct government price negotiation in Medicare — that together would weaken the safety of our nation’s pharmaceutical supply chain, reduce patient access and do little to lower costs.

The plan contains some positive ideas, such as encouraging value-based pricing agreements, fixing the flaws in the 340B drug discount program, limiting pharmacy gag clauses, and passing rebates through to patients in Medicare Part D and capping their out-of-pocket costs. However, buried in the details are proposals that could harm the ability of patients to get the medicines they need both now and in the future.

Today, BIO is starting a blog series that will highlight three proposals in particular that could pose significant challenges to patients. As the first in a three-part series, this blog will look at proposals in the president’s drug pricing plan that would affect a popular prescription drug program for America’s seniors.

Restricting access under Medicare Part D. 

The Medicare Part D prescription drug program has been a remarkable success for both seniors and taxpayers.

  • The program cost $349 billion less over 10 years than initially expected;
  • Average premiums dropped 3% in 2018 to less than $34 per month; and
  • Hospital admissions for seniors have also dropped by 8%.

It’s no wonder then that nearly 90% of seniors are satisfied with the program.

Medicare Part D generally covers medicines that patients buy at a retail pharmacy and take themselves. The private health plans administering the Part D program are required to provide at least two drugs for each class of drugs that exists. Then there are six “protected classes” of drugs for patients facing particularly devastating diseases like cancer, HIV and mental illnesses. Health plans are required to cover “all or substantially all” medicines that fall within these protected classes.

Current policies help provide seniors and people with disabilities with choices, and more choices means more competition that can lead to lower costs. However, under the Trump administration’s proposal, health plans would only be required to provide one drug per class, down from the current requirement of at least two. The administration may also eliminate some of the protected classes altogether. These changes would leave doctors and patients with fewer options, forcing beneficiaries to pay more if the medicines their doctors prescribe aren’t covered.

Health plans would also be allowed to increase the use of so-called utilization tools – such as “step therapy” or “prior authorization.” These bureaucratic hurdles are already far too common, and while these “tools” may help insurers protect their bottom line, they also bury doctors in paper work and make it harder for patients to get the right medicines at the right time. 

The nation’s biopharmaceutical innovators support taking steps to strengthen the Medicare Part D program. That effort should focus on lowering seniors’ out-of-pocket costs and ensuring they have broad access to the medicines they need.

Stay tuned for the second part of this three-part blog series, which will look at proposed changes to the Medicare Part B program.

 

Read part 2

Read Part 3

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