ACP Recommendations for Rising Prescription Drug Costs

The United States routinely outspends other high-income countries on prescription drugs because of the lack of price controls or negotiation by government health care systems. Patients with high-deductible plans are increasing in number, while drug prices are also on the rise. The American College of Physicians (ACP) recently expanded on a position paper from 2016 that addressed the issue of escalating prescription drug costs with recommendations for improving transparency, value, and competition to support a more sustainable health care system.

Part of the ACP’s recommendations focus on pharmacy benefit managers (PBMs), for-profit entities that manage the selection, purchase, and distribution of pharmaceutical products for more than half of the population in the United States¹. PBMs claim to save each consumer almost $1000 a year. However, they have recently come under scrutiny for negotiating rebates from rising drug prices — such as those commonly prescribed to seniors — which could in turn incentivize drug companies to raise the prices. Because of this and other practices, 27 states have enacted laws to prohibit “gag clauses,” stopping pharmacists from informing consumers that they could save money by paying out of pocket for drugs. In their recommendations, the ACP supports this ban on “gag clauses” and contends that PBMs and manufacturers should be required to report amounts paid for drugs and amount of rebates to the Department of Health and Human Services. The ACP also recommends that health plans make medication pricing information available to both physicians and patients to support cost-appropriate care.

The other focus of the ACP recommendations is Medicare costs². Currently, Medicare accounts for 29% of all retail prescription drug spending, with spending for Medicare Part D alone reaching $137.4 billion in 2015. For their recommendations on Medicare, the ACP encourages the use of low-cost drugs for patients who are enrolled in the low-income subsidy Medicare program. By offering generic drugs at no out-of-pocket cost, the ACP feels that therapy adherence would be increased. Additionally, they support the promotion of biosimilar drugs to keep costs low. Another recommendation is capping out-of-pocket spending for Part D beneficiaries who reach the catastrophic phase of coverage³. Such as measure would protect those beneficiaries financially but could increase premiums. The ACP also advocates for allowing the Secretary of Health and Human Services to negotiate with drug makers over prices for Part D plans. However, this could potentially limit access to certain medications.

The ACP calls on policymakers and other stakeholders to address the various issues that lead to higher prescription drug costs. Such groups can provide patients the means to understand drug pricing, help physicians make informed care decisions, and create a more sustainable health care system through increased transparency and prevention of incentives that allow for higher prescription drug prices.

References

1. Daniel H, Bornstein SS; Health and Public Policy Committee of the American College of Physicians. Policy recommendations for pharmacy benefit managers to stem the escalating costs of prescription drugs: a position paper from the American College of Physicians [published online November 12, 2019]. Ann Intern Med. doi:10.7326/M19-0035
2. Daniel H, Bornstein SS, for the Health Public Policy Committee of the American College of Physicians. Policy recommendations for public health plans to stem the escalating costs of prescription drugs: a position paper from the American College of Physicians [published online November 12, 2019]. Ann Intern Med. doi:10.7326/M19-0013
3. Jazowski SA, Dusetzina SB. Recommendations for lowering prescription drug spending in public programs [published online November 12, 2019]. Ann Intern Med. doi:10.7326/M19-2895