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Azar’s Prescription Cost Plan Needs Closer Scrutiny

Aug. 7, 2018

Azar’s Prescription Cost Plan Needs Closer Scrutiny

Statement of Peter Maybarduk, Director, Public Citizen’s Access to Medicines Program

Note: The Centers for Medicare & Medicaid Services (CMS) trumpeted a conference call featuring U.S. Health and Human Services (HHS) Secretary Alex Azar this afternoon that was designed to finally signal the Trump administration’s movement to lower prescription prices for Americans through Medicare negotiations. However, closer inspection of Azar’s promises are needed.

Compared to what the federal government could do to make medicines affordable, these are the leftovers of the small potatoes. And if handled poorly, the proposal could hurt patients.

Azar is misleading people when he implies this is what Trump meant when he said Medicare could save billions by negotiating. In Trump’s candidacy and early presidency, Trump spoke of giving Medicare the power to negotiate – that is, giving the secretary the power to negotiate directly with prescription corporations to make Medicare Part D (the prescription benefit that is the world’s largest purchaser) more affordable.

Adjusting the rules for Medicare Advantage plans under the much smaller Part B program is a much smaller change than giving the government power to negotiate directly for Part D. Even if Medicare Advantage plans for Part B somehow reduced their costs from $12 billion to zero, that still would produce less in savings than the government simply negotiating prices directly for the $100 billion Part D program. Trump still is failing to deliver on his promise, and Azar still is protecting Big Pharma.

Under the Trump proposal, some plans may spend slightly less, but largely would do so by taking a lower-cost treatment option when available. Instead, the Trump administration should focus on actually reducing prices.

Further, step therapy can come at the risk of patients not receiving the treatments best suited to them. For example, another step therapy program led some insurance plans to require that people with hepatitis C take pegylated interferon, a treatment with often intolerable side effects and mediocre success rates, before the plan would cover superior direct acting antiretroviral treatments.