President Trump is expected to touch upon areas of agreement between both parties and all Americans. in tonight’s State of the Union. One such area he’s expected to speak to, the rising cost of healthcare.
We’ve written extensively on how the Trump Administration has already taken decisive action to increase transparency, accountability and competition to bring down prices.
One way the administration can go further is to ensure that middlemen no longer pocket savings intended for patients. Currently, rebates from pharmaceutical manufacturers don’t reach the patients taking those drugs. As those rebates are often for the most expensive medicines treating serious illnesses, this means that the sickest patients aren’t getting the relief they need.
Adam Fein, CEO of Drug Channels Institute, said it best this week in the Wall Street Journal:
The allure of massive rebates also encourages many health plans to select the most expensive drug possible for any given treatment. One senior PBM executive even tells me that some of his clients are ‘addicted to rebate checks.’… Patients are the ultimate victims of the current drug pricing system. Overall drug spending is growing very slowly—only 0.4% a year in 2017. But the sickest Americans are stuck paying ever-higher out-of-pocket costs for drugs with net prices that are flat or declining.
This is a simple case of misaligned incentives, meaning that no change is possible without real accountability and transparency.
In this case, sunlight is the best disinfectant – and, look forward to the sun shining on this problem, soon. Read the full op-ed, “Don’t Blame Drug Prices on ‘Big Pharma’” in the WSJ here.
