This spring, the Trump administration released its “American Patients First” blueprint — a sweeping plan to drive down prescription drug costs. The Department of Health and Human Services quickly issued a formal “request for information,” seeking feedback from patients, doctors, insurers, hospitals, drug manufacturers, and every other participant in the healthcare ecosystem.
Those responses are due July 16. One can only hope that healthcare groups offer their advice in good faith. The proposed reforms are some of the most dynamic and disruptive ideas to circulate Washington in years — they deserve an honest debate.
The blueprint and request for information make it clear that the healthcare status quo is no longer acceptable. It calls on brand-name drug manufacturers to facilitate the creation of more generic drugs by ceasing the legal shenanigans that prevent quicker development programs. Manufacturers also have to come to the table ready to discuss the real problems with the CREATES Act, and work to actually solve them.
It also rightly demands that pharmacy benefit managers (perhaps the most problematic of all the actors) put patients ahead of profits. They can start by passing more of the discounts that they extract from drug manufacturers (which totaled $130 billion in 2016) to patients in the forms of lower co-pays and co-insurance.
And they can build on that progress by not using restrictive formularies, co-pay accumulators, and prior authorization to pad their own pockets. If they’re not willing to accept fiduciary responsibility for their actions, they’ll have to prepare for Uncle Sam to take away their anti-kickback exemption.
The blueprint wisely calls on insurers to eliminate “gag rules” that prevent pharmacists from informing patients about ways to lower their out-of-pocket costs. HHS Secretary Alex Azar has already knocked insurers for “keeping customers in the dark.” But he’ll have to do more than throw verbal punches. He’ll need to use his HHS authority and bully pulpit to help propel more sunlight (the best disinfectant) into the insurance industry.
The Trump administration already has some unilateral authority to improve the system. The Centers for Medicare and Medicaid Services’ Administrator Seema Verma should prepare to grant more waivers to states that want to experiment with market-based reforms to government programs. Verma can also look for ways to insert more competition into Medicare Part B while retaining existing price transparency. Driving more competitive benefit design options both inside and outside of government programs must also be a priority.
Food and Drug Administration Commissioner Scott Gottlieb has already shaken up the agency — it approved a record number of generic drugs in 2017. Congress has given the agency broader authority in recent years. Gottlieb must use that power to convince, cajole, and empower line review staff to speed up drug reviews and embrace more flexible clinical trials.
Lawmakers also have a role to play — much of the drug blueprint can’t be enacted without new legislation. Congress often misunderstands the healthcare ecosystem, which leads to simplistic, sound bite-driven proposals. Drug importation, patent expropriation, and “single-payer healthcare,” for example, are bad ideas that many in both chambers support, even though they have been shown time and again to be replete with dangerous consequences. Lawmakers must stop looking for people to blame and start looking for ways to solve the problem.
The Trump administration’s request for information is essentially a high-stakes exam for America’s healthcare leadership. The questions are difficult, time is short, and the stakes are high. But with continued political pressure to develop disruptive solutions that reduce costs for patients while enhancing innovation, we can expect more than a passing grade. We can expect real progress.
Peter J. Pitts, a former FDA Associate Commissioner, is president of the Center for Medicine in the Public Interest.
