Infectious Disease

HHS is proposing laws to reduce the cost of prescription drugs

September 10, 2021

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HHS secretary Xavier Becerra announced a plan to lower prescription drug prices by “promoting negotiation, competition and innovation in the healthcare industry”.

One of the “key” lines is legislation that would allow HHS to negotiate drug prices for Medicare Part B and Part D directly with drug companies and then make those prices available to other buyers, according to an agency press release.

HHS announced a plan to lower prescription drug prices through negotiation, competition and innovation.
Source: Adobe Stock

Other suggested guidelines include:

  • Medicare Part D reform, including a spending cap to protect beneficiaries from prohibitive out-of-pocket expenses;
  • Legislation to slow the rise in drug prices;
  • Legislation to accelerate the availability of biosimilars and generics, for example by reducing the exclusivity period and adopting Medicare Part B guidelines to increase the prescribing of biosimilars among clinicians;
  • Prohibition of “pay-for-delay” agreements and similar “anti-competitive” practices; and
  • Investing in basic and translational research to promote innovation.

HHS also suggested:

  • Testing Value-Based Payment Models in Medicare Part B;
  • Trial Models that provide Medicare Part D Low Income Subsidy Program participants additional cost-sharing support for the use of biosimilars and generic drugs;
  • Testing nursing cost models in Medicare to see if they reduce overall spending and improve patient outcomes;
  • Collecting data from insurers and pharmacy performance managers to improve transparency regarding drug prices, discounts, and self-spending; and
  • Working with states and tribes to develop drug import programs that reduce costs without increasing safety risks.

Prescription drugs cost Americans more than $ 1,500 per person, and brand-name drug prices are rising faster than inflation, according to HHS. A report by RAND Corporation published earlier this year estimates that prescription drug prices in the United States are 2.56 times higher than in other countries. For branded drugs, the price difference was even larger – 3.44 times higher.

“Many low-income families are too often unable to take their prescription drugs due to cost reasons,” Becerra said in the press release. “The Biden-Harris administration remains committed to making health care more affordable for American families, and this plan outlines an important way we will do that.”

References:

HHS. Comprehensive Plan to Deal with High Drug Prices: A Report in Response to Regulation on Competition in the American Economy. https://aspe.hhs.gov/sites/default/files/2021-09/Competition%20EO%2045-Day%20Drug%20Pricing%20Report%209-8-2021.pdf. Accessed September 10, 2021.

HHS. Comprehensive Plan to Deal with High Drug Prices: A Report in Response to Regulation on Competition in the American Economy. Summary. https://aspe.hhs.gov/sites/default/files/2021-09/Drug%20Pricing%20HHS%20Exec%20Summary%209-8-21.pdf. Accessed September 10, 2021.

HHS. HHS Secretary Xavier Becerra publishes a bold proposal to cut prescription drug costs. https://www.hhs.gov/about/news/2021/09/09/hhs-secretary-xavier-becerra-releases-bold-proposal-lower-prescription-drug-costs.html. Accessed September 10, 2021.

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