President Trump is vowing to bring down prescription drug prices by targeting the “middle man,” and a leading health care policy expert is explaining who that is and what should and should not be done about it.
The cost of prescription drugs continues to be a major frustration for patients and physicians, to the point that cash-strapped patients sometimes choose not to get their medication.
“Physicians tell me that they prescribe medication for their patients and they can’t afford to fill the prescription because of the cost of their co-payments,” said Galen Institute President Grace-Marie Turner.
So who are these “middle men” and how are they driving up the cost of prescription drugs?
At issue are distributors who sell to major clients like hospitals and big pharmacy chains like Walmart and CVS.
“Distributors, called pharmacy benefit managers, have set up their businesses to help provide not only distribution supply chains so these institutions have their medicines but also to try to negotiate big discounts for them.
“There are questions about how much of that money – the discounts – is actually going back to the people making the purchases. You’re always going to have middle men in the economy that work between the manufacturer and the consumer, but I think the lack of transparency in this industry has become something of a problem,” said Turner.
Many liberal critics cried foul when Trump did not order the government to negotiate price reductions with drugmakers, calling it a sellout to the industry. Turner says Trump made exactly the right call.
The left’s approach always is, ‘Let’s put price controls on drugs and we can get the costs down,’ what every government-run health care program in the world does. It doesn’t work. You end up artificially suppressing prices temporarily, but you wind up with fewer new drugs.
“We’re the medicine chest for the world because we don’t have price controls,” said Turner.
In fact, Turner says competition and consumer choice is leading to lower prices through the Medicare Part D program.
“It’s costs are 45 percent below what the government said the costs were going to be at this point when the program was created more than 10 years ago. Seniors’ premiums are less now than they were ten years ago,” said Turner.
Turner says another way to bring down costs is to boost drug price transparency. Right now, she says a pharmacist can only tell you what your insurance company is telling him to charge you. He cannot tell you it might be vastly cheaper to get your prescription filled somewhere else.
Yet another advantage for patients would be to speed up the introduction of generic meds. Turner says there is a difficult tension at work in the current timing.
“The balance of protecting intellectual property rights of that developer that spent maybe $2.5 billion bringing that drug to market is important. But it’s also important, to them as well, that people have access to those drugs,” said Turner.
She says the Trump administration has about 100 different ideas to bring down the cost of prescription drugs and is urging the public to weigh to help prioritize its efforts. More information can be found at hhs.gov.