The Latest on Drug Spending: Trump Administration Releases Drug Spending Blueprint

Uproar over the high costs of prescription drugs continues to dominate health care conversations on Capitol Hill. From new efforts to increase competition to reports that brand-name drug costs have spiked, here are some recent developments on this issue.

Administration releases blueprint to lower drug prices and reduce out-of-pocket costs.

On May 11, The Department of Health and Human Services (HHS) released American Patients First, which outlines a wide range of policies being considered to address drug costs. HHS is seeking public comments to help shape policy development. That includes possible updates to how Medicare Part B pays for physician-administered drugs. The program has faced large spending increases for these drugs in recent years.  

HHS Secretary Azar testifies before the Senate HELP Committee on drug pricing plan.

 On June 12, Secretary of Health and Human Services Alex Azar testified before the Senate Health, Education, Labor, and Pensions Committee on the administration’s drug pricing blueprint. Much of the discussion focused on the role of pharmacy benefit manager rebates and potential actions to reduce their use or to eliminate them. Secretary Azar reiterated in his responses to questions his support for adding negotiation tools for physician-administered drugs to Medicare Part B. Azar discussed several policy options that require congressional action, including a possible ban on gag clauses in contracts between pharmacies and pharmacy benefit managers that prevent pharmacists from discussing lower-cost options with patients.

Food and Drug Administration (FDA) names companies accused of limiting generic developer access to sample product for testing.

The FDA began posting on its website a list of brand drug makers that have been the subject  of complaints by generic developers that say they have been unable to obtain samples of the brand drugs needed to conduct testing to support competitor applications. According to the website, the practice of limiting access to brand samples at times can amount to a “gaming” tactic. This issue has been the focus of policymakers seeking to reduce delays in access to generic products that can help bring down drug spending.

The Centers for Medicare and Medicaid Services (CMS) updates drug spending databases to improve price transparency in government programs.

The centers released updated information on drug spending and utilization in Medicare Part D, Part B, and Medicaid; web-based dashboards now include data on 2016 expenditures and utilization in these programs.

Medicare Part D costs grew between 2011 and 2015.

The HHS Office of the Inspector General released a report on June 4 noting that, despite relatively stable premiums, brand drug costs have risen substantially in recent years. After accounting for rebates, Medicare Part D payments for brand-name drugs increased by 62 percent between 2011 and 2015. In addition, Part D unit costs—the cost per dose—for brand-name drugs rose nearly six times faster than inflation during this period, and the share of beneficiaries responsible for out-of-pocket costs of $2,000 or more for brand-name drugs nearly doubled.

Ian Reynolds is a manager and Amy Abadir is an associate with The Pew Charitable Trusts’ drug spending research initiative.