AAOS May 29, 2018
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Azar Proposes Changes to Address Drug Prices

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House of Representatives Legislative Activities

Senate Legislative Activities

Azar Proposes Changes to Address Drug Prices

The Department of Health and Human Services’ (HHS) this month issued a request for information (RFI) to seek comment from interested parties to help shape future policy development and agency action on lowering drug prices and reducing out-of-pocket costs. The blueprint released by HHS, also this month, covers multiple areas including, but not limited to:

  • improving competition and ending the gaming of the regulatory process,
  • supporting better negotiation of drug discounts in government-funded insurance programs,
  • creating incentives for pharmaceutical companies to lower list prices, and,
  • reducing out-of-pocket spending for patients at the pharmacy and other sites of care.

According to the RFI, millions of Americans “face soaring drug prices and higher out-of-pocket costs, while manufacturers and middlemen such as pharmacy benefit managers (PBMs) and distributors benefit from rising list prices and their resulting higher rebates and administrative fees.” This requires, the agency argues, “an unprecedented re-examination of the whole system and opportunities for reform.”

“For too long, there’s been a lot of talk on drug prices, and no action,” HHS Secretary Alex Azar stated at the blueprint’s release. “Drug companies have insisted we can have new cures or affordable prices, but not both. I’ve been a drug company executive—I know the tired talking points: the idea that if one penny disappears from pharma profit margins, American innovation will grind to a halt. I’m not interested in hearing those talking points anymore, and neither is the President.”

Azar is scheduled to testify on the prescription drug plan on June 12 before the Senate Health, Education, Labor and Pensions (HELP) Committee.

“Biomedical research has made it possible to cure Hepatitis C, prevent migraines, and stop a stroke, but it is important that patients are able to afford these miracle drugs,” stated Chairman Lamar Alexander (R-Tenn.). The cost of prescription drugs is a complex problem and the Administration has laid out a comprehensive plan to help address that problem. I welcome the President’s leadership to put patients first, and look forward to hearing more about the blueprint from Secretary Azar and learning how Congress can help reduce the cost of prescription drugs.”

This will be the committee’s fourth in a series of hearings this Congress on the price of prescription drugs. According to the committee, the first hearing in June 2017 examined the path a prescription drug approved by the Food and Drug Administration takes from the manufacturer to patient, and how this path affects what the patient pays. At a second hearing in October, the committee heard from industry experts on what goes into the price Americans pay when picking up their prescriptions. The committee held a third hearing in December to hear from the National Academies of Sciences, Engineering, and Medicine on a report they published on making medicine more affordable.