By Danny Sanchez, Chief Executive Officer, EmpiRx Health
In the wake of the recent elections, there has been a great deal of speculation about how the major changes in the presidential and congressional landscapes will impact healthcare policy. While we cannot accurately predict the effects these significant political shifts will ultimately have on the nation’s healthcare sector, we are clear on one policy priority we’d like to see the President-elect and Congress focus on in the year ahead: skyrocketing prescription drug costs.
The fact is that constantly rising prescription drug costs are a primary driver of overall healthcare spending in the US, and the flood of hyper-expensive specialty medications is making matters even worse. Exorbitant prices for many drugs present serious challenges to the healthcare system, most notably for private benefit plans that more than 164 million Americans rely on for their healthcare.
Here are some initial recommendations for positive, proactive steps the incoming Administration and Congress can take to limit skyrocketing drug costs:
- Limit Big Pharma’s Role in Driving Up Drug Costs – One cannot overstate the undue influence that the big pharmaceutical companies have on rising prescription drug costs. Consider, for a moment, the hundreds of millions of dollars spent by these companies each year on direct-to-consumer advertising to build patient interest and demand. On top of those ads, the pharmaceutical companies employ rebate-centric business models that push patients and payers toward their expensive branded drugs when lower cost generics and alternative medication therapies would be the better option. We would like to see the new Administration and Congress scrutinize the role of these business practices in inflating drug prices rather than keeping them in check.
- Increase Transparency in Healthcare, Especially in Drug Pricing – As is often said, sunlight is the best disinfectant. That should include bringing more transparency and visibility to the true costs of healthcare, especially when it comes to prescription medications. We would like to see the new healthcare power-players in Washington support measures that give patients and payers clearer visibility into available treatment options and medication costs. Increased transparency can help reduce confusion caused by opaque drug pricing and increase accountability among the pharmaceutical companies and their close partners, the biggest pharmacy benefits management (PBM) companies.
- Put Pharmacists Back in Pharmacy Benefits Management – While the FDA is primarily concerned with the efficacy and safety of the drugs they regulate, it is not known for providing oversight on the cost/value of these medications. The result is that the pharmaceutical companies receive little to zero pushback on whether their drugs deliver sufficient patient value to justify their enormous costs to the healthcare system. Who should provide that oversight? We believe that critical function can be provided by clinical pharmacists, whose job is to advise patients, providers, and payers on the clinical appropriateness of medication therapies.
- Enact True PBM Reform Now – It’s undeniable that the volume- and rebate-driven business practices of the big three PBMs are major factors driving the soaring drug costs that pose an existential threat to the US healthcare benefits system. Together with their pharmaceutical company partners, the largest PBMs are complicit in perpetuating a broken operating model that increases, rather than reduces, drug spending. As a starting point, we believe PBM reform should include true pricing transparency, limits on vertical-integration that creates competition-killing industry behemoths, and an end to anti-competitive practices that put community pharmacies out of business.
Big problems require equally big solutions. With a combination of bold policy reforms based on transparency, affordability and access, and industry actions that prioritize patients over profits, we can reverse the trend of constantly rising drug prices.
Forward-looking PBM companies have an important role to play in these healthcare transformation efforts. We look forward to working with our new partners in government to develop and execute real-world solutions that ensure the health and happiness of patients, while securing the long-term viability of the nation’s healthcare system.
