What drug-pricing proposals are still on the table?

The Trump administration abandoned its proposal to overhaul the drug rebate system this week, but a host of other high-profile proposals to lower drug prices remain.

Below are some plans being floated, according to S&P Global.

1. Facilitating generic or biosimilar competition. This bill is supported by the Senate Committee on Health, Education, Labor and Pensions. It seeks to address the issue through patent reform and penalizing anticompetitive behavior. 

2. Increasing PBM reporting requirements. Also backed by the Senate HELP Committee, the bill aims to bring more transparency into the system used by pharmacy benefit managers.

3. Capping drug price inflation for Medicare Part B and Part D. This proposal, which seeks to cap price increases to inflation levels, is backed by the White House budget committee; Med-PAC;  Sens. Chuck Grassley, R-Iowa, Ron Wyden, D-Ore, and House Speaker Nancy Pelosi. S&P reports that the likelihood of implementation is higher than some other proposals because the pharmaceutical industry reportedly is prepared to accept an inflation cap. 

4. Capping Medicare Part D members' out-of-pocket costs. The draft bill is supported by the House Ways & Means Committee; White House budget committee; Med-PAC; and Mr. Grassley, Ms. Pelosi and Mr. Wyden. The bill seeks to cap patient responsibility for drug costs.

5. Restructuring catastrophic coverage. The draft bill, supported by the House Ways & Means Committee; White House budget committee, Med-PAC; and Mr. Grassley, Ms. Pelosi and Mr. Wyden, aims to increase health plans' share of costs in the catastrophic phase. The bill would cap patient cost-sharing at Medicare's catastrophic spending threshold, which was set at $8,140 in 2019. Currently Medicare picks up 80 percent of the tab, but the bill seeks to reduce the government's obligation from 80 percent to 20 percent over four years, increasing financial pressure on health plans.

6. Banning spread pricing and giving full rebates to beneficiaries. Backed by the Senate HELP committee, the bill seeks to ban a practice known as spread pricing, which happens when pharmacy benefit managers charge health insurers more for a drug than it reimburses a pharmacy to dispense the drug. PBMs often keep a portion of the amount paid to them from the health insurers, instead of passing the full amount to the pharmacy. The bill also seeks to ensure all rebates — discounts drugmakers pay to PBMs — would be passed on to consumers at the pharmacy counter. 

7. Issuing executive order to enforce "favored nations clause." President Donald Trump said in early July he was preparing an executive order to lower prescription drug prices in the U.S. to the lowest price paid among other developed countries. He is calling his proposal a "favored nations clause."

8. Negotiating drug prices directly. This proposal, brought by Ms. Pelosi, aims to allow Medicare and Medicaid to directly negotiate drug prices with drugmakers. 

9. Improving PBM transparency at state level. Several states are working on proposals to improve transparency into the PBM industry or ban certain tactics used by PBMs, including spread pricing. 

More articles on pharmacy:
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Nation's 1st prescription drug affordability board goes into effect
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