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Proposed Trump Rx policy will drive up people’s drug costs

Written by Diane Archer

The New York Times reports on a new proposed Trump administration policy that would drive up people’s drug costs further. It would raise the cap on total out-of-pocket costs for people with health care coverage under the Affordable Care Act. In addition, it would make it harder to qualify for a federal subsidy to offset people’s insurance premiums and reduce the size of the subsidy for those eligible.

The Trump administration’s policy proposal would penalize people with health care coverage through the state health insurance exchanges, who use brand-name drugs when lower cost generics are available. It would allow insurers on the state exchanges to count only the generic drug’s copay amount towards a person’s total out-of-pocket costs even when the person paid a higher copay for a brand-name version of the drug.

Maximum out-of-pocket costs for people would increase. Today, people’s annual out-of-pocket cap is $7,900. The Trump Administration policy would push it up to $8,200. And, how these costs are counted would change to push the cap still higher in practice. Any help people in the state health exchanges receive in the form of coupons or financial assistance to offset the cost of their drugs would not count towards their total out-of-pocket costs. Some insurers are already failing to count this assistance towards people’s out-of-pocket costs.

This proposed policy change at first may appear to have merit. Pharmaceutical companies use drug coupons–which are not generally available to people with Medicare–as a means to get people to buy their high-cost drugs and drive up their profits. This is problematic when lower-cost drugs are as effective, killing generic competition and driving up overall health care costs. For this reason, these coupons are a problem.

But, the coupons can be a lifesaver for people who otherwise could not afford their medications. A policy that makes them less effective is of no help to people who need them to afford their drugs. Some brand-name drugs do not have a lower-cost substitute. And, some people rely on drug coupons to pay for their generic drugs, which can be very expensive. 

Without drug coupons, the Trump administration believes that the pharmaceutical industry will rein in high drug prices for fear they will lose market share. But, there is no evidence to support that theory. Pharmaceutical companies never seem to need to lower their prices. They find other strategies to sell their drugs at high prices.

The most helpful government action to rein in drug costs is to step in to negotiate fair drug prices for everyone, as Senators Bernie Sanders and Elizabeth Warren have proposed in different Congressional bills they have introduced.

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

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