Health Law Daily HHS heeds Trump’s call to action, solicits comments on drug pricing
Wednesday, May 16, 2018

HHS heeds Trump’s call to action, solicits comments on drug pricing

By Sheryl Allenson, J.D.

Less than a week after releasing American Patients First, the Trump administration’s blueprint for lowering drug prices and reducing out-of-pocket costs, HHS requested comments from industry stakeholders about future policy developments on the matter (see HHS’ American Patients First broad effort to address high drug costs ) (Notice, 83 FR 22692, May 16, 2018).

Steps taken so far. As an initial matter, HHS laid out several administrative steps already taken by the Trump Administration. The agency has worked to increase competition, support better negotiation, create incentives to lower list prices, and reduce out-of-pocket spending. In response to President Trump’s call to action, HHS broke each of these categories down to determine further action to be taken, and then solicited comments to various topics in each category, in order to see what additional actions could be taken.

Competition. HHS may support improved competition by taking steps to prevent gaming of regulatory processes and by promoting innovation and competition for biologics. With respect to each, the FDA will issue guidances or new policies. HHS solicited comments to determine what other steps it could take to increase competition. It asked whether its programs contain the correct incentives to obtain affordable prices on safe and effective drugs. It solicited comments on how taxes under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) and rebates have impacted manufacturer list pricing practices. HHS also solicited comments relating to distribution restrictions and samples for biosimilars and interchangeables.

Negotiation. HHS laid out several steps it could take to support better negotiation. Among those steps are allowance of Part D plans to adjust formulary or benefit design during the benefit year if necessary to address a price increase for a sole source generic drug, as well evaluating options to allow high-cost drugs to be priced or covered differently based on their indication. HHS also solicited comments, among other topics, related to value-based arrangements and price reporting, as well as indication-based payments and long-term financing models.

Lowering list prices. With respect to lowering list prices, HHS’ response to the President’s call to action includes requesting that the agency call upon the FDA to evaluate inclusion of list prices in direct-to-customer advertising. HHS will direct CMS to make Medicare and Medicaid prices more transparent and will develop proposals relating to the ACA’s maximum rebate amount under section 2501. HHS solicited comments on whether there is a fiduciary duty for pharmacy benefit managers (PBM), asking, among other things, whether PBMs should be forbidden from receiving any payment or remuneration from manufacturers and whether PBM contracts should be forbidden from including rebates or fees calculated as a percentage of list prices.

Out-of-pocket spending. HHS may prohibit Part D plan sponsors from preventing pharmacists from telling patients when they could pay less out-of-pocket than by using their insurance. Additionally, HHS could require Part D plan sponsors to provide additional information about drug price increases and lower cost options. In its solicitation for comments, HHS asked what additional information could be provided on an explanation of benefits and whether there is federal preemption of the contracted pharmacy gag clause laws. HHS also crafted questions about cost-sharing and use of lower-cost alternatives.

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