The Senate Finance Committee held its prescription benefit manager hearing today. CNBC reports on the hearing here.
Healthcare Dive reports on the comments that were filed on the CMS proposed rule to eliminate prescription drug rebates from Medicare, among other federal health programs offered to the public. The drug manufacturers favor eliminating the rebates. However, they have been unwilling to assure the PBMs and health plans that the rebate savings will lower prescription drug pricing dollar for dollar.
From skimming through the Senate testimony, it’s clear to the FEHBlog that the Medicare rebate rule needs to be withdrawn and re-evaluated. Removing rebates would not create overall healthcare savings even if rebates are fully traded for lower drug prices. It would benefit plan members with high deductibles or co-insurance arrangements for their prescription drug coverage.
Ironically, the commercial PBMs did not originate the rebate idea. The PBMs ripped a page out of the federal government’s playbook which included prescription drug rebate arrangements for Medicaid, the Veterans Administration, and the Defense Department going back at least into the 1980s.
The most effective step that Congress can take to lower prescription drug prices is to reform the patent system for prescription drugs, including specialty drugs. The UnitedHealthcare witness at today’s hearing explained (p. 6)
An effective intellectual property environment plays an indispensable role in both promoting drug discovery and ensuring innovations are affordable and sustainable. Today’s intellectual property system does not work as intended. The most important step Congress can take to address the high cost of prescription drugs is to modernize the intellectual property system for the 21st century and eliminate drug manufacturers’ ability to manipulate the patent and regulatory system and thereby prevent lower-cost genericsand bio-similars from reaching consumers more quickly
Amen to that. If the rebate debate leads Congress to take action to reform the patent laws, the debate will have served its purpose.