Guest Column: As part of his plan to rein in Big Pharma, President Trump should use Pharmacy Benefit Managers to help keep prescription prices low

As part of his plan to rein in Big Pharma, President Trump should use Pharmacy Benefit Managers to help keep prescription prices low
by Dr. William Cohen

President Trump has been taking a bold lead in holding pharmaceutical companies responsible for their actions in the opioid crisis and has taken lead holding big pharma accountable.  But it’s not just how they prescribe drugs that need to be addressed, and I think the great leadership the President has been providing is just the start of what we can achieve.

In addition to addressing drug overdose deaths, momentum has been building in Washington to take action on out-of-control prescription drug prices.  One in four Americans cannot afford their medication, creating a problem for our great nation that can no longer be ignored.

Democrats and Republicans promised voters to hold pharmaceutical companies accountable in the 116th Congress.  Several hearings have taken place in our nation’s capital to combat skyrocketing drug prices.  Americans should be encouraged that significant action is happening.

The Trump Administration pledged to lower prescription drug prices and our President has a chance to continue his momentum.  The Administration aims to increase transparency in the drug market by forcing drug manufacturers to include a drug’s list price in their direct-to-consumer ads.

The FDA, under former Commissioner Scott Gottlieb, has worked to bolster competition and call out abuses in the marketplace by cracking down on pharmaceutical companiesanti-competitive tactics.  President Trump should be commended for these efforts – they are a step in the right direction to help alleviate high drug prices.

There is a proposal right now for a Rebate Rule – a step to eliminate the ability of pharmacy benefit managers (PBMs) to negotiate rebates with pharmaceutical companies for Medicare recipients — the only existing check in the supply chain on manufacturers’ control over prices.  The plan will cost patients and taxpayers billions of dollars and could exacerbate the crisis of rising drug prices.

It’s important to understand how PBMs work within the supply chain.  PBMs negotiate with drug manufacturers on behalf of health insurance companies to get discounts on Medicare Part D drugs – drugs that our seniors and those with disabilities need to live.  The savings PBMs negotiate benefit patients by helping insurers lower out-of-pocket costs.

Pharmaceutical companies attack PBMs and call them ‘middlemen’, but if PBMs didn’t exist, companies would have nearly unilateral control over drug prices.  Blaming PBMs for high prices just diverts consumer attention away from the real problem: a lack of competition and the need for more market-based checks on the pricing of prescription drugs.

But it’s not just PBM’s who are affected, there are even greater consequences to the Rebate Rule.  The proposed rule hurts American seniors and people with disabilities, many of whom are on fixed incomes.  According to the administration’s own actuaries at the Centers for Medicare and Medicaid Services (CMS), Medicare Part D premiums will rise by 25 percent overall and 19 percent in 2020 alone.  Seniors with fixed budgets will not be able to afford an increase of this magnitude.

The Rebate Rule also effects taxpayers.  The CMS concludes that federal spending will increase $196 billion from 2020–2029. This will make it one of the most expensive regulations in U.S. history.  The Rebate Rule costs so much money that President Trump didn’t even put it in the budget he delivered to Congress.

Our lawmakers ought to challenge this proposal and reconsider if we want to ask taxpayers to cover nearly $200 billion in new spending to fund a plan that hikes Medicare premiums.  If our representatives in Washington can work with President Trump, I know we can come up with a better solution.

No one should have to struggle to afford life-saving medication.  In my heart of hearts, I believe the Trump Administration needs to work with Congress to enact proposals that increase price transparency and boost competition instead of ones that cost patients and taxpayers billions of dollars.  I hope Senator Thune will lead the way and oppose the Rebate Rule.