PhRMA calls for lower payments to pharmacy benefit managers to tackle high drug prices in US

In response to recent proposals from US President Donald Trump to tackle high drug prices, the Pharmaceutical Research and Manufacturers of America (PhRMA) outlined what it called a "bold new policy position" on how payments in the supply chain should work. PhRMA chief executive Stephen Ubl said "our industry agrees…that the status quo is not working in the best interest of patients and our healthcare system needs to change." 

According to PhRMA's proposals, pharmacy benefit managers (PBMs) and other parties in the supply chain should be prevented from having their compensation calculated as a percent of the list price of a medicine and instead receive a fee based on the value their services provide. "Delinking supply chain payments from the list price will be disruptive and requires our companies and others to adapt, but it is necessary to improve patient affordability," Ubl remarked, adding "we hope realigning these incentives will result in a greater shift toward value and lower costs for patients." 

PhRMA noted that although discounts and rebates led to savings of $150 billion last year, insurers are increasingly requiring patients to pay more out of pocket, while those with high-deductible health plans or coinsurance do not benefit from negotiated savings as their out-of-pocket costs are frequently based on the undiscounted list price. 

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Meanwhile, CVS Health, which owns the PBM company Caremark, said "until drug manufacturers reduce the high price they set for these drugs, we know this problem is not going away." CVS urged that "more must be done to make generics available, including expanding the use of biosimilars, and eliminating tactics that stall competition." The healthcare company suggested that to increase the availability of biosimilars, the exclusivity period for biologics should be shortened from 12 years to seven years, while pay-for-delay agreements should be prohibited. 

CVS said it has "seen great results from prescribers accessing the real-time benefits information to the point of prescribing," noting that its data suggest doctors who use the technology switch to a covered drug 75 percent of the time when the original drug is not covered. The company also supports proposals to strengthen negotiating tools in Medicare's Part D programme. 

Pharmaceutical Care Management Association CEO Mark Merritt commented "we are encouraged that the administration's blueprint raises several proposals that would increase the use of [PBM] tools to reduce costs in public programmes." He added that the organisation recommends the use of PBM tools in Medicare Part B and an expansion of available formulary tools in Medicare Part D and Medicaid. 

Meanwhile, the American Cancer Society Cancer Action Network warned that some proposed changes, such as eliminating six protected cancer drug classes and shifting drugs from Part B to Part D of Medicare, "could erect barriers to cancer care." In addition, Vizient said it backs the administration's efforts to tackle drug pricing, but expressed "serious concern" that the two site-neutral payment policies proposed in the blueprint could have "a substantial and devastating impact on access to care" for vulnerable patients. 

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