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 Trump Plans Medicare Changes to Pressure Lower Drug Prices

​In a preview of President Trump’s announcement on Friday, May 11, of new government efforts to curb the prices paid by consumers for prescription drugs, Health and Human Services (HHS) Secretary Alex Azar said pharmacy benefit managers (PBMs) are a prime target in the effort.

Speaking on CNBC, the HHS head said, “We have to fundamentally examine and re-examine the role of pharmacy benefit managers, which serve a very important function in this system of negotiating, but how do the financial arrangements work? Who are they collecting money from? And how are things structured in terms of that list price to net price dynamic? Because those incentives are driving it.”

PBMs, such as CVS Health, Express Scripts, and UnitedHealth Group, are third-party administrators of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans.

Although Azar mentioned PBMs during his CNBC appearance, the summary of the Trump plan, called, “American Patients First,” does not have any suggestions to address the PBM role in the prescription drug continuum.

One area that the Trump administration has focused on within the PBM sphere is the role of manufacturer rebates worked out between drug makers and PBMs, and why more of that price reduction is not passed on to consumers.

For example, earlier this spring, Azar praised a move by UnitedHealthcare to share manufacturer rebates and discounts with patients at the pharmacy. “Today’s announcement by UnitedHealthcare is a prime example of the type of movement toward transparency and lower drug prices for millions of patients that the Trump administration is championing,” he said.

For its part, the Pharmaceutical Care Management Association (PCMA) said PBMs help to reduce prescription drug costs and improve convenience and safety for consumers, employers, unions, and government programs.

“PCMA’s mission is to lead the effort in promoting PBMs and the proven tools they utilize, which are recognized by consumers, employers, policymakers, and others as key drivers in lowering prescription drug costs and increasing access,” PCMA said.

As for the Trump blueprint, media reports said the president will not call for Medicare to directly negotiate lower prices with drug manufacturers, which many Democrats favor and the president backed while campaigning for the White House.

But, according to The New York Times, the president’s drug plan will make it easier for commercial health plans to negotiate “better deals for our seniors, especially for high-cost medications.”

In sticking with his administration’s America First theme, the newspaper said Trump will pressure foreign governments to relax drug price controls, with the thinking being drug companies can then lower prices in the United States as a result.

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