Summary from the National Rural Health Association
On Thursday, September 9, 2021, the Department of Health and Human Services (HHS) Secretary Xavier Becerra released a comprehensive plan to lower prescription drug prices. The plan was released in response to the larger Executive Order on Promoting Competition in the American Economy released by the Biden Administration earlier this summer. In the Executive Order, the Administration outlined areas where a lack of competition was a driving force in problems across economic sectors, including in prescription drug access and pricing. In the report, HHS identifies that Americans spend more than $1,500 per person on prescription drugs, while paying prices that are higher than our international counterparts. With that, brand name drugs continue to rise in cost faster than inflation.
To address this growing issue, the Administration has outlined three guiding principles for the Drug Pricing Plan:
- Make drugs more affordable and equitable for all consumers and throughout the health care system.
- Improve and promote competition throughout the prescription drug industry.
- Foster scientific innovation to promote better health care and improve health.
The Administration has placed an outline for what they would like to see legislatively to accomplish this, most of which is being proposed through the ‘Build Back Better’ (BBB) plan being negotiated currently on Capitol Hill. Some of these provisions they’re supportive of include:
- Drug pricing negotiation in Medicare Parts B and D, with those negotiated prices also available to commercial plans.
- Part D reform, including a cap on catastrophic spending.
- Legislation to slow price increases on existing drugs.
- Legislation to speed the entry of bioslimilar and generic drugs.
- Prohibition on ‘pay-for-delay’ tactics.
While supporting actions being discussed on Capitol Hill, the Administration also plans to consider taking actions at the Department level to address this issue. Some of these provisions include:
- Test models using value-based payments in Part B, in which payments for drugs is directly linked to the clinical value they provide patients.
- Test models providing additional cost-sharing support to Medicare Part D Low-Income Subsidy Beneficiaries for using biosimilars and generics.
- Data collection from insurers and PBMs to improve transparency about prices, rebates, and out-of-pocket spending.
- Work with states and Tribes to develop drug importation programs.
In sum, the Biden Administration is working to promote lower prescription drug prices. To do so, from our interpretation, they are exploring new test models at the Department level, but primarily throwing weight behind prescription drug reform legislation being discussed on Capitol Hill.