Latest news and updates about the Medicare and pharmacy industries.

July 19: Trump Administration Drops Another Drug Pricing Proposal

Posted on in Industry Updates by Amplicare Team

Plus, the latest pharmacy and healthcare news to know this week. 

The Story

Last Thursday, the Trump Administration backed out of a major proposal to lower drug prices. Following the recent dismissal of an administration rule that would have required drug makers to disclose list prices of medications in TV ads, the Department of Health and Human Services (HHS) scrapped another plan that would have banned the payment of certain rebates on drugs in Medicare Part D. 

Why It Matters 

Medicare Part D beneficiaries’ costs are currently based on the full list price of a drug, even if insurers end up paying a negotiated price that is lower after rebates. The proposed drug rebate rule intended to stop drugmakers from giving these rebates to PBMs in government programs like Medicare and directly pass on the discounts to consumers instead. 

However, the HHS announced that it would no longer be moving forward with this plan after receiving mixed feedback from the public, insurers, and PBMs. The risk of increasing Medicare premiums for patients was a major concern for critics as the Congressional Budget Office determined the plan would cost the government $177 billion over nine years, and expected drugmakers to pocket the rebates instead. While pharma companies were in favor of this change, insurers and PBMs argued that it would not address the root of the problem: the high list prices of drugs at the start of negotiations. 

The reversal of this plan is pressuring the administration to look at other approaches to lowering drug prices such as importing lower-cost drugs from other countries and matching Medicare drug prices to those of other countries with cheaper prices. It has yet to be seen what the next steps will be moving forward. 

More healthcare news to watch:

  1. Johnson & Johnson is in the midst of developing the first immunization against HIV with plans to test an experimental vaccine in the U.S. and Europe. Bloomberg. 
  2. A new federal government report shows that there are fewer opioid prescriptions being written for Medicare Part D beneficiaries. STAT.
  3. New data from the U.S. CDC reveals that a majority of American adults, including current smokers, are in favor or making cigarettes less addictive. Time.
  4. U.S. lawmakers had a “historic” marijuana reform hearing discussing the federal legalization and decriminalization of marijuana. CNBC.
  5. Education Management Solutions, a simulation management technology company, has partnered with University of Otago Professor Stephen Duffull  to introduce virtual gaming into pharmacy education. Newswise.

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