Think disclosing drug list prices in TV ads is all the transparency the Trump administration is asking for? Think again.
President Donald Trump is expected to sign an executive order as early as next week that would require for the first time disclosure of prices across the healthcare industry, in a move that officials hope will lower healthcare costs, The Wall Street Journal reported, citing people familiar with the discussion.
The presidential directive, blessed with the power of law, would ask federal agencies to force price disclosures across the industry, including the negotiated rates between hospitals and insurers. For pharmas, that could mean publishing information on drug prices and those so-far-secretive discounts drugmakers offer to pharmacy benefit managers to win formulary coverage.
Details of the final version of the order will be discussed Friday at the White House, one person familiar with the discussions reportedly told the WSJ. And there seem to be disputes within the administration. For example, aggressive proposals from the Alex Azar-led HHS on drug-price transparency have faced opposition from Joe Grogan, who heads the White House Domestic Policy Council, five people told the Journal.
Earlier this year, Azar’s HHS proposed scrapping rebates drugmakers pay PBMs. While some argue that rule would remove the incentive for list price increases, others contend that it would handicap payers' negotiating power.
Rising drug list prices have drawn much public outcry—and Trump’s personal criticism. Biopharmas and PBMs have routinely pointed fingers at each other. Drugmakers say they’re forced to increase list prices to make room for bigger rebates that would give them better position on formularies, even though their net prices have actually decreased for some. PBMs, for their part, have said drugmakers are raising drug prices just because they can.
No conclusion has been made on which side has more convincing arguments because the only thing known is that the rebates are unknown. And that’s one aspect Trump’s new directive might change.
Azar’s proposal is not official yet—and it might not be in the near term—but another one toward the goal of more drug price transparency is. Earlier this month, the administration finalized a rule that now requires drugmakers to include their sticker prices in TV ads for any drug that costs more than $35 for a month’s supply.
“Making those prices more transparent is a significant step in President Trump’s efforts to reform our prescription drug markets and put patients in charge of their own healthcare,” Azar said at the time.
The industry was obviously disappointed, arguing the list price offers little help to patients as it’s not reflective of what they pay out of pocket.
“We are concerned that the administration’s rule requiring list prices in direct-to-consumer (DTC) television advertising could be confusing for patients and may discourage them from seeking needed medical care,” Steven Ubl, industry trade group PhRMA’s president and CEO, said in a statement at the time.
The Trump administration isn’t alone in going after drug price disclosures. Sen. Ron Wyden, D-Ore., ranking member of the Senate Finance Committee who co-championed the recent attack at rising insulin prices, just last week introduced a bill that would require insurers to give beneficiaries information on healthcare costs, including for drugs.