August 26, 2020
(Washington, D.C.) — Pharmaceutical Care Management Association (PCMA) President and CEO JC Scott issued the following statement on the reported “counteroffer” by the pharma lobby to the Administration:
“While we remain deeply engaged in seeking solutions to lower drug prices and are as eager as anyone to see more progress, as reported, the ‘counteroffer’ that has been put forward is much like the rebate rule that remains under consideration. It provides no confidence that it will result in price decreases and, instead, it creates more risk of increasing Medicare premiums and taxpayer costs.
Based on reports, the proposal for Medicare Part D helps only a small fraction of beneficiaries and some aspects of it may increase both premiums and federal spending. If this is layered on top of a possible rebate rule, those effects may be even more pronounced.
Instead, pharmacy benefit managers (PBMs) support policies that will increase competition and reduce prescription drug costs for everyone, and we look forward to working with the Administration and Congress to advance solutions that reduce drug costs while protecting America’s seniors.”
Here are the Facts on the Proposed Rebate Rule
- Part D Premiums Will Increase Dramatically: Ninety percent of beneficiaries would pay higher premiums, while only about 10 percent of beneficiaries would save more on cost-sharing than they spend on premiums. If premiums increased each year and by 25% over 10 years, as estimated by the CMS Office of the Actuary, this would mark the largest average premium increase in the history of the program. Further, because Part D is voluntary, it could destabilize the program if higher premiums cause healthier beneficiaries to drop coverage or never sign up at all.
- The Proposed Rebate Rule is One of Most Expensive Regulations in History: According to the Congressional Budget Office, the Administration’s rebate reform proposal would cost taxpayers $177 billion over ten years. The Administration’s own actuaries also estimated the cost to be as high as $196 billion over 10 years, and Avalere Health estimated the proposed rule will cost taxpayers $400 billion over that time.
- Poll – Medicare Part D Beneficiaries are Concerned about Proposed Changes to Drug Plans: Senior registered voters enrolled in Medicare Part D will be less likely to support the reelection of their members of Congress and presidential candidates if those elected officials backed proposals eliminating prescription drug negotiations and price concessions that would result in Part D premium increases, according to a poll from North Star Opinion Research.
- The Proposed Rule Does Nothing to Address Prescription Drug List Prices: The Administration has continually stated its goal to lower list prices for prescription drugs, and yet the proposed rule “intends” and speculates that manufacturers might do so. The fact is the manufacturers—and only manufacturers—set drug prices. Furthermore, independent research shows that for every $100 spent in the prescription drug supply chain on branded drugs, pharmacy benefit managers (PBMs) retain about two dollars, compared with $58 for drugmakers.
Visit PCMA’s website to learn more.