Azar defends PBMs in Trump administration's plan to bring down drug costs

Democrats grilled HHS Secretary Alex Azar about why the Trump administration backed away from a campaign promise to allow Medicare to directly negotiate drug prices Tuesday during a hearing on the president's plan to reduce prescription costs in the U.S.

And just as predictably, Azar defended the administration's plan to control drug costs, arguing the blueprint's version of negotiation would ultimately achieve that goal of savings—with the help of pharmacy benefit managers. 

While those very businesses have been highlighted and villainized as a key reason drug prices are too high elsewhere in the system. Azar told the Senate Health, Education, Labor and Pensions Committee that PBM's could also be key partners.

"The issue you raise is, 'Should I sit there and actually be the one to negotiate, rather than using these pharmacy benefit managers which currently do that work and enhancing that work for them to do better,'" Azar said in response to a question from Sen. Michael Bennet, D-Colo.

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"We believe we can get the same type of rebates, the same type of discounts through better negotiations using these private sector entities where that is their job," Azar said. "They do this. We need to unleash them,"

In her opening statement, ranking member Sen. Patty Murray, D-Was., called administration's plan the opposite of what Trump promised voters.

"As a candidate, President Trump constantly brought up that idea. He told crowds he would 'negotiate like crazy," Murray said. "Despite his claim that he was 'very much eliminating the middlemen,' this proposal to shift payments to from Medicare Part B to Part D would have the opposite effect, empowering the companies he calls middlemen without any data to suggest it will bring down prices for our families."

Azar calls for Congress to help make drug blueprint work

While Azar previously highlighted what the administration could do without Congress, on Tuesday he highlighted several areas where Congress is needed to drive down drug prices, particularly as pharmaceutical manufacturers resist changes.

"We believe we have the authority to require list price disclosure in FDA's TV ads. But we would also welcome Congress acting there to ensure that our statutory authority is shored up as big pharma will most certainly challenge us in that effort," Azar said.

Congress could also support site-neutral payments, and ban PBM's from creating gag clauses that prevent pharmacists from telling patients about lower cost options and penalizing drug companies that lower list prices for patients. He said the administration also believes Congress could act in removing the inflation penalty created under the Affordable Care Act, which is a 100% cap on rebates that drug companies have to pay. 

He also called out brand-name drug manufacturers gaming the FDA's system to protect their patented drugs from generic competition. Generic drug makers collude with brand-name drug makers to sit on a 180-day exclusivity right, he said.  "But if they don't launch, the clock never starts," Azar said. 

Congress could grant HHS the authority to make the clock on exclusivity start once another generic drug maker is ready to enter the market, he said.