Trump Believes More Competition Will Lower Drug Costs
The pharmaceutical industry is “getting away with murder” and now Trump is freeing pharmacies to tell patients about cheaper alternatives, running out the middlemen and forcing foreign countries to share the cost of American research and development.
Liberal papers are brushing the announcement off as “cobbled together old and new ideas” and saying that the drug system is too complex to save money for consumers, but Trump is picking up on the proven laws passed at state level and pushing them out on a federal basis.
There are a few major points to Trump’s announcement, made Friday afternoon.
- Preventing Pharmacy Benefit Managers from pocketing the rebates and discounts negotiated with drug companies for health plans
- Banning the Pharmacist Gag Rules
- Addressing the fact that American consumers pay extra for research and development, while other countries get drugs for much cheaper due to their own laws.
Read on for more details about these three prongs which through negotiation will result in:
“more competition and much lower prices at the pharmacy counter, and it will start to take effect very soon.”
The announcement took place in the Rose Garden at the White House.
What Is A Pharmacy Benefit Manager?
Acting as a third party administrator to health plans including Medicare, federal plans, and commercial plans, a pharmacy benefit manager is responsible for working out rebates and discounts with drug manufacturers, contracting pharmacies to work with the plan and working out the list of drugs that are and aren’t covered, and at what cost to the patient.
Right now, more than 266,000,000 Americans are at the mercy of these managers.
Pharmacy benefit managers have been fighting against the FDA’s focus on approving generic or similar versions of the extremely expensive “biologics” drugs that are used to treat autoimmune diseases like rheumatoid arthritis and Alzheimer’s.
In the last year, the rebates and discounts partially pocketed by PBMs totaled $153,000,000,000.
Pharmacist Gag Rule
In the last few months, several states have been attempted to block the “gag clauses” in insurance including Connecticut, North Dakota and North Carolina, where both Democrats and Republicans are co-sponsoring actions to block the rules, which prevent pharmacists from telling their insured customers about cheaper, generic options.
“Our plan bans the pharmacist gag rule, which punishes pharmacists for telling patients how to save money. This is a total rip-off, and we are ending it.”
Earlier this year, the White House Council of Economic Advisers issued a report discussing that pharmacy benefit managers “exercise undue market power” through their ability to gag pharmacists, and therefore they generate their own “outsized profits.”
One pharmacist, speaking to media from his storefront in Plattsburgh New York said that the restrictions are “incredibly frustrating.” Steven Moore explained further, saying that one consumer with health coverage might be picking up a prescription that costs him $20 at the counter, where a non-insured customer buying the same drug might pay $15.
That is, if you use your insurance, you might be paying more out-of-pocket for a drug because the pharmacist is not allowed to tell you that it’s cheaper to simply pay cash instead of going through insurance.
In North Carolina, the language chosen to free pharmacists is that they “shall have the right” to inform insured customers about their co-payments and options for cheaper generics.
North Dakota recently passed a law ensuring that a pharmacy benefit manager or insurer are banned from charging a high co-payment than the actual cost of the medication.
High Cost At Home
Everyone knows the story, that if you know how to buy it online (or if you take a vacation) then you can get your prescriptions filled much cheaper in other countries like Canada and Mexico. That’s because only American consumers are burdened with the extra cost to fund new research and development, which is an added cost that other countries do not allow to be placed on sales in their own country.
“Finally, as we demand fairness for American patients at home, we will also demand fairness overseas. When foreign governments extort unreasonably low prices from US drugmakers, Americans have to pay more to subsidize the enormous cost of research and development.”
As well, Trump is promising that the FDA will be speeding up the approval process for cheaper generics and alternative, further pushing the cost down.
Sources: The New York Post, New York Times, Wikipedia