The White House’s efforts to combat high drug prices are falling short, according to a report released ahead of a planned appearance by the Trump administration’s top health official.
Democrats on the Senate Finance Committee released a report Tuesday outlining the drivers of high drug costs and how the Trump administration’s blueprint to combat the problem is inadequate. Health and Human Services Secretary Alex Azar is expected to testify before the committee about drug prices Tuesday.
The report outlines the complex process behind the price of medications, including negotiations and transactions that lead to the high prices consumers pay. It looks at drug agreements in Medicare, not private health insurance. It also examines tactics to suppress generic drug competition.
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The report bashes byzantine rebate agreements brokered between the drug maker and insurers or pharmacy benefit managers that oversee drug plans for employer or union health plans.
A common criticism of the rebate agreements is that they promote high prices since the insurer and PBM get a cut of the rebate. A higher list price for a drug means a higher rebate, which creates a larger cut.
The report notes that the administration’s blueprint, issued last month, has some encouraging policies such as combating “gag rules” that prevent pharmacists from informing a consumer when it is cheaper to buy a drug with cash than through insurance.
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But the blueprint’s policies “are not sufficient to reduce costs significantly for Americans. Few of the administration’s proposals seek to meaningfully limit drugmakers’ ability to set or raise list prices with impunity.”
It added that most of the plan is simply a request for information seeking public comment on ideas to tackle high prices.
“In light of the thinness of the president’s blueprint, it does not appear that this administration is willing to make the fundamental changes necessary to fix this otherwise broken system,” the report says.
Azar has said that the plan is part of a larger effort to combat high prices. The blueprint includes changes that were included in President Trump’s budget proposal but doesn’t require much from Congress beyond that.
It focuses on making significant changes to Medicare Part D, the program’s prescription drug plan, and Medicare Part B, which cover drugs administered in a doctor’s office, such as chemotherapy.
