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National Academy of Sciences recommends drug price negotiation to make drugs affordable

Written by Diane Archer

A new report, Making Medicines Affordable, by the National Academies of Sciences, Engineering and Medicine recommends several immediate actions to ensure Americans have access to affordable and effective medicines. For people with Medicare, the committee supports Medicare drug price negotiation, a cap on out-of-pocket costs for prescription drugs and an end to cost-sharing for prescription drugs in some cases. The report recognizes that people are increasingly not taking their medications because of their high cost and that lack of compliance with a drug regimen can increase health care costs overall.

The report recommends that deductibles and copays for people enrolled in all government health programs be based on the net price of the prescription drugs and not the list price, which is often significantly higher. The net price is the price that the pharmacy benefit manager (PBM) gets for a drug after all rebates are taken into account. People filling their prescriptions often do not benefit from these rebates and end up paying copays and deductibles off higher drug prices than the the prices that the PBM is getting for the drugs.

Committee members recognize that the US does not have a competitive marketplace for prescription drugs. As a result, prices for many drugs are sky high. They recommend ensuring meaningful competition among drug makers after a drug’s patent expiration. They propose ways to limit the ability of drug makers to take drugs going off patent off the market and change them superficially so as to allow them to garner a new patent, “evergreening.”

In addition, committee members propose more price transparency and ending profits to pharmacy benefit managers, insurers, doctors and hospitals for using high-priced drugs. They want to encourage doctors to prescribe the most effective drugs at the lowest prices and patients to use drugs that offer the greatest clinical benefits at the lowest cost. They also want pharmaceutical companies to explain how they price their drugs so that the Federal Trade Commission can take action against companies engaging in anti-competitive practices.

Committee members would like to find ways for better understanding of the comparative value of drugs, particularly of new drugs brought to market, and to explore paying for drugs based on value.

According to David Lazarus at the LA Times, to date President Trump and the US Department of Health and Human Services have failed to embrace any of these recommendations, much less all of them.

If you want Congress to rein in drug prices, please sign this petition.

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