The Trump administration’s plan to peg Part B drug prices to those paid in other countries may not come to fruition in its current form, but it’s meant more to signal to the healthcare industry—and voters—that it's serious on this issue, experts say.
Ezekiel Emanuel, M.D., chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania and one of the key architects of the Affordable Care Act, said the policy’s release was clearly tied to the election, and means that the administration will do something, even if the final version is scaled back or revamped significantly from the current plan.
“Things take on a life of their own once they’re in the public,” Emanuel said.
The Department of Health and Human Services announced its International Pricing Index plan last month, which it intends to test in about half of the country. The agency projects that the model could save $17 billion over the course of its five-year demonstration.
President Donald Trump ran for office in part on promises to lower drug prices, but his administration has come under fire for not doing enough to achieve that goal, Emanuel said. The ongoing back-and-forth sets up healthcare costs, and drug prices in particular, to be central issues in the 2020 election, he added.
Emanuel was one of several speakers at an event on cancer care hosted Tuesday morning by The Washington Post.
Jennifer Bryant, senior vice president for policy and research at the Pharmaceutical Research and Manufacturers of America, said that the policy, if enacted as currently planned, could have a major chilling effect on pharmaceutical research.
Health policymakers shouldn’t expect to eliminate such a large amount of spending—they're targeting about 30% of current Part B spend—without expecting some consequences, Bryant added. There are immediate financial impacts, and long-term it could lessen American drug companies’ status as research and innovation leaders.
“There’s no free lunch here,” Bryant said.
HHS Secretary Alex Azar has disputed concerns that the model would significantly impact drug maker’s research capabilities. Emanuel said that pharmaceutical companies are some of the country’s most profitable—several of the top companies earn 25% profits, he said—so they’d have money to move around.
In addition, the drug price plan has some changes that would likely be positive, said Peter Bach, M.D., director of the Center for Health Policy and Outcomes at MD Anderson Cancer Center. The piece that would have outside vendors taking ownership of medications and then distributing them to providers, for example, has come up in health policy plans in the past.
The International Pricing Index would also end the long-standing payment rates of average sales price plus 6%, a set-up that encourages doctors to prescribe more expensive medications, according to Bach
That pay rate was “seized upon by pharma as an incentive,” he said.
The trio also touched on how rising drug prices impact cancer patients, who are frequently prescribed some of the priciest medications on the market. In addition to an industrywide increase in cost-sharing by patients, the value of cancer drugs is on the decline.
A patient spending thousands of dollars to tack a few months onto their life may not really be getting what they’re paying for, Bach said.
“It’s getting to be less and less of a good deal,” he said.