Although Congress has so far failed to pass legislation to lower prescription drug prices, they have not given up trying to do so.
This Wednesday, the Senate Finance Committee will hold a hearing entitled “Prescription Drug Inflation: an urgent need to lower prescription drug prices in medicines.”
In addition, leaders in both houses have said they will continue to work on legislation that can gain enough support to pass. As we’ve reported in the past, the Democratic majority has been unable to agree among themselves on legislation to lower drug prices and Republicans have said they will not vote for any drug-lowering legislation the Democrats have come up with so far.
Because of the impasse in Congress, the Biden administration has been looking for ways to lower drug prices either through executive orders or through administrative rule-making.
An example of the latter is a Medicare proposal aimed at lowering out-of-pocket drug costs. It is complicated measure but that’s because the manner in which drug prices are set is very complicated and not at all transparent.
Very briefly, this new rule mandates that Medicare Part D plans apply all “price concessions” they receive from pharmacies to the final sale price.
However, it wouldn’t ensure the rebates that manufacturers pay to insurers and pharmacy middlemen also apply at the point of sale. Critics argue those rebates are shrouded in secrecy and have ultimately led to higher initial list prices.
The Centers for Medicare & Medicaid Services (CMS) said in January that the proposed rule would reduce costs of prescriptions for those who need them, and improve transparency and competition in the Part D program.
However, Pharmacy Benefit Managers (PBMs) argue that the proposal would limit its function to bring lower drug costs to consumers. PBMs have repeatedly argued that drug manufacturer price setting is the root cause of high drug costs.
PBMs are something no one outside of the prescription drug world had ever heard of until the drive-in recent years to lower drug prices. They are pitted against the big drug manufacturing companies in the battle, with each accusing the other of being the reason for the outrageously high prescription prices Americans are paying and each are pouring millions of dollars into lobbying efforts to try and defeat any proposed legislation that might harm their profits.
As we said, it’s very complicated.
In all of this, TSCL’s goal remains the same: prescription drug prices are too high, and we need government action to lower them. A drug that will cure or control a medical condition does no good if the person who needs the drug can’t afford it.
