Since ObamaCare’s passage and failed implementation, patient premiums and out of pocket expenses have gone way up, not down as promised. Consumers now have less options in terms of policies and benefits to choose from, not more as they were told. Countless patients can no longer see their doctors or be treated at local facilities of their choice.
On the campaign trail, candidate Donald Trump said he would work with a Republican Congress to repeal ObamaCare so that patients and doctors, rather than bureaucrats and unelected boards, would have more control over individuals’ health care decisions. He also vowed to roll back government obstacles to bring new medicines to market faster, speed generic drug approvals, and address the high costs of insurance premiums and prescription drugs, all to reduce unsustainable health care costs.
Detractors of President Trump like to highlight that ObamaCare is still in existence, despite Republicans controlling both houses of congress. But President Trump has quietly gained the upper hand on several crucial health care reforms including the repeal of Obama cares individual mandate, the laws core, in last years tax bill. Another victory is the repeal of ObamaCare's independent payment advisory board, aka the ObamaCare death panel. Naturally the media gives him no credit for these achievements.
Friday, President Trump will address health care reform again and the impact of drug prices will surely be included as a part of that speech. The changes that are already underway spurring greater competition which will help further drive down costs without sacrificing new medical innovations, or bringing new treatments to market. Several of the most significant reforms have come from the U.S. Department of Health and Human Services (HHS) and the agencies housed within it, the Food and Drug Administration (FDA) and the Centers for Medicare & Medicaid Services (CMS).
HHS Secretary Alex Azar is a seasoned veteran who brings experience as a health care reformer in the federal government and as an innovating private sector executive. Commissioner Scott Gottlieb, an FDA alum, is reforming the regulatory system to expedite reviews and ignite greater competition. Over the past decade, competition from generic drugs has saved the U.S. health care system $1.67 trillion. Expect much more. Gottlieb is working to eliminate regulatory barriers that stand in the way of bringing more of these drugs to market.
He’s prioritized FDA reviews for the first three generic alternatives to any original brand name drug, and these efforts are having an impact. In fact, the FDA approved more than 100 generic drugs in the month of October 2017 – more than ever before. And in July, the FDA will host a pioneering program focused on “Patient Focused Drug Development” that elevates patient perspectives and priorities in both the development of new treatments and their evaluation by regulators.
Much attention of late has been made about patients who have picked up prescriptions at the pharmacy counter only to find the costs under their insurance plan are sky high -and rising even higher. That’s because Pharmacy Benefit Managers (PBMs) – middlemen that negotiate discounts and rebates from drug manufacturers – and health plans don’t always pass along those savings, sometimes up to 50 percent, to patients. This unfairly inflates drug costs, including those of senior Medicare beneficiaries. CMS Administrator Seema Verma is working to address this through a new proposed Medicare rule, which will ensure patients benefit directly from these substantial discounts. And it’s a change that could yield more than $10 billion in savings for seniors.
Similarly, Verma has proposed reforms to Medicare’s 340B Program that would save patients hundreds of millions of dollars on drug copayments in 2018 alone. The 340B program was originally intended to help low income patients pay for medicines through large discounts provided by drug manufacturers to 340B designated hospitals. The program was expanded significantly as part of ObamaCare. Alas, the 340B program has subsequently been widely abused by hospitals who have turned the discounts into profit centers instead of passing savings on to patients. For context, a recent House Energy and Commerce Committee report calculated that the number of hospitals participating in the 340B program has more than quadrupled from 591 in 2005 to 2,479 in 2017. Furthermore, a study in the New England Journal of Medicine found that the financial gains for hospitals from the 340B program didn’t lead to expanded care or lower mortality for low- income patients.
Despite representing less than 14 percent of total health care spending, drug costs now have more visible public price tags in the wake of ObamaCare. This largely is because health insurers, even after dramatically spiking premiums, have also vastly increased deductibles, co-pays and other out -of -pocket expenses. Add to this, the misguided practice of insurers and PBMs not passing along negotiated savings from manufacturers to patients, and it is evident that the “system” created under ObamaCare has effectively shifted much of the cost burden directly on to patients in visible, invisible and painful ways. That said, as President Trump noted in his State of the Union address, the cost of drugs remains too high.
Reforms that help to lower drug costs without stifling medical innovation and investment is a critical goal, but one that can only be achieved through an approach that examines the entire “system.” This includes biopharmaceutical manufacturers, health insurers, PBMs, trial lawyers and patent trolls, regulators and our foreign trading partners. Price controls such as those that are routine in Europe would suffocate the development of life-saving, life- improving medicines and medical devices. This is what has happened overseas.
We look forward to hearing the president's remarks on these critical issues.