Of all the news coming from Washington D.C. in recent weeks, none may affect you more than the good news coming today--lowering the price of drugs. President Trump will speak on the topic extensively, revealing his vision for lowering drug prices, and his specific actions to do so. These specific actions will not require the approval of Congress, meaning changes are in sight, whether or not Congress approves.
What to Expect
Many of the changes that are soon to occur, will happen on the part of manufacturer's, insurers, and pharmacy benefit managers. Consumers will not be making the changes or playing a part in negotiations, but it is the American people who will see the changes.
Changes to Medicare and Medicaid
Changes seen in the proposed 2019 budget point to changes in Medicaid and Medicare coverage. Presently, the Medicaid drug rebate program allows insurers to cover certain drugs currently under rebate, pocketing the profits. Instead of saving consumers money, the rebate program allows insurers to gain a profit, and allow manufacturers to raise prices. Giving states the power to choose which drugs are covered would lower prices, something that the state of Maine implemented in 2003.
In addition to the expected lower prices, there will be changes that will affect senior citizens. Changes to the Medicare Part D program will mean not only lower prices to the insured, but will also require that insurers and pharmacy benefit managers share the discounts with the insured. Medicare Part B will see changes that will adjust the cost of in-office drug administration, as well as to provide incentives for hospitals that provide charity care.
Changes to Manufacturing and Marketing
A large part of the problem is the lack of available generic drugs, and the Food & Drug Administration is working to correct it. Presently, manufacturers stand to benefit from less available generic drugs, bio-similars, and rival brands from entering the market. In order to provide more options to consumers, the FDA has cleared a backlog of approvals for generic drugs and are actively looking for ways the rules are being used to close the market on generic drugs. For example, branded companies may deliberately block a generic company from accessing enough testing samples of the originator drug.
Changes to Trade Policy
Changes like the ones the American people need do not happen over night. President Trump's economic advisers see a need for change in trade policy, whereas health policy experts disagree. The problem is that the U.S. spends most of the money and does most of the work for drug research, innovation, and manufacturing from which the rest of the world benefits. Limiting the under-pricing of drugs both domestically and in foreign counties will bring prices down by encouraging innovation. President Trump is expected to speak more on this topic during his address, likely to expound upon the report released from the White House in February of this year.
One thing is certain--changes need to be made--but they cannot happen overnight. The circumstances that have allowed the rising drug prices in America happened over decades, and now the federal government has a plan to correct it. Both Democrats and Republicans are weighing in, but it's the American people themselves that stand to gain or lose as the cost of health continues to rise.