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The devil is in the details – Trump administration’s plan to reduce drug prices

By Michael Thompson posted 05-18-2018 10:59


Last week the Trump administration announced the highly anticipated “American Patients First” blueprint to reduce drug prices. While it was encouraging to see that it targeted some of the problem areas, it may not have the teeth to make a serious impact on the market pricing practices. Employers and other purchasers who share the brunt of the costs for these issues cannot rely on the government to mitigate these problems.

One of the problems identified and written about this week in ebn by National Alliance member Cheryl Larson, president and CEO of the Midwest Business Group on Health, is that the recommendations did not place a priority on the use of pharmacy benefit management (PBM) drug rebates. While it’s noted in the blueprint, it’s not being considered as a strategy for immediate action.

We’d also like to see more specific policy proposals that would lower the high list prices of drugs and make a greater impact to those footing the bill. One area not specifically addressed in the blueprint is the fastest growing area of spend for employers today -- specialty drugs. While these new drugs are truly innovative and important, the specialty drug marketplace itself is dysfunctional with high cost, high variation and high waste. The effect is seen across the entire supply chain. We need to wring out the impact of poor quality, unwarranted cost, complexity, and conflicts. In response to this, we’ve developed an engagement framework with several member coalitions targeting critical issues and opportunities for specialty stakeholders including manufacturers, providers, health plans, and pharmacy benefit managers.

The Five Rights Framework offers guidelines to bring all healthcare stakeholders to the table to improve value for healthcare purchasers and work towards delivering the best possible patient care. The Framework includes the following recommendations:

  • Clinical efficacy and safety independent of conflicted interests
  • Support improved assessment of correct drug, dose and duration of treatment for specific patient
  • Expand purchaser transparency and engagement and use of National Drug Codes
  • Value based contracting aligned with performance and adherence to high value drugs
  • Cost parity or benefit differentials across sites of care for same drugs and services
  • Effective emotional and social support to increase adherence and improve outcomes
  • Discontinue conflicting practices - low value coupon programs, drug increases in excess of consumer price index, exclusion of high value delivery options


We are very supportive of all efforts to rationally put the brakes on this runaway train of drug costs. Public policy can be helpful, but the private sector cannot stand still in the meantime. The National Alliance and our coalition members are leading tangible, collaborative and, at times, independent actions that support our collective efforts to disrupt the spiraling path we face today.