Top 3 Things You’ll Learn
- Details of two major drug pricing bills awaiting action in the United States Senate
- The main reasons that Federal-level action to lower drug costs has stalled
- Your role in helping your self-funded clients manage their pharmacy benefits costs
For years health plans, employers and policymakers have been calling for measures to help lower the out-of-pocket cost of prescription medications. Now, it looks like payers and consumers will have to continue waiting for any Federal-level action to help lower prescription drug prices. Discussions on the major drug pricing proposals have been pushed aside as legislators focus on Federal aid bills designed to ease COVID-19-related economic concerns for individuals and businesses throughout the country. This means that it will be even more important for you to provide detailed oversight of your clients’ pharmacy benefits plan this year, independent of the pharmacy benefit manager (PBM), especially in identifying and addressing their key risk areas.
Prior to COVID-19, two major drug pricing bills were awaiting Senate action. Here’s what you need to know, now that those have stalled and Rx costs are still a problem.
Drug Pricing Legislation Delayed
Prior to COVID-19, lawmakers had been working on two key bills designed to help lower the costs of prescription drugs for payers and individuals:
S.2543 – The Prescription Drug Pricing Reduction Act
Submitted by the Senate Finance Committee Sept. 25, 2019, and still awaiting a decision, this bill establishes a $3,100 cap on annual out-of-pocket spending in Medicare Part D, starting in 2022. It would have an indirect impact on drug pricing by creating much stronger incentives for payers to manage costs throughout all phases of the Medicare Part D benefit. In turn, this could lead to lower prescription drug prices because it will force Part D plans to be more efficient in their pricing negotiations and management of drug spending. This bill also proposes an inflationary rebate for physician-administered Part B drugs. So if prices for brand-name drugs or biologics covered under Part B increase faster than the rate of inflation, the drugs’ manufacturers would be required to pay the difference in the form of a rebate to Medicare.
H.R. 3 – The Elijah E. Cummings Lower Drug Costs Now Act
Passed in the House of Representatives on Dec. 12, 2019, this bill is currently awaiting action in the Senate. The biggest change proposed in HR 3 is to remove the existing law that forbids Medicare from negotiating drug prices. It would effectively give Medicare the power to negotiate directly with the drug companies, creating a new way to force drug companies to the table to agree to real price reductions. The bill also limits the maximum price of any negotiated drug to the drug’s average price in foreign countries where drug companies charge less for the same drugs – and admit they still make a profit.
The future of these bills is unknown, especially given the Trump Administration and the Senate’s opposition to government price setting and upcoming November elections.
How You Can Help Your Clients Anyway
As the country deals with the unexpected consequences of the COVID-19 pandemic, your clients will be looking to you now more than ever to guide them with innovative solutions to lower their prescription drug costs. Small and mid-sized businesses will need your support in finding ways to lower their pharmacy benefits costs – and the greatest opportunity you have to find those savings opportunities is through a careful analysis of their pharmacy benefits contract and prescription drug claims data.
Read our free ebook to find out how to use an independent market analysis to evaluate the options for your self-funded clients so that you can recommend the optimal cost-saving pharmacy benefits strategies.