July 11, 2019
Back in January of this year millions cheered President Trump’s plan to finally hold pharmacy benefit managers (PBMs) and insurance companies accountable for their heavy role in the increasing prices of prescription drugs. Each year billions of dollars in rebates and discounts are provided by pharmaceutical manufacturers to PBMs through negotiation in Medicare Part D, but a sizable chunk of these rebates never make it to patients, but are instead pocketed by PBMs or insurance companies. The Trump plan was aimed at finally addressing this by requiring rebates be returned to seniors.
Unfortunately we learn today that HHS Secretary Alex Azar is reversing course, and abandoning this plan for reasons that still have not been made entirely clear. What is clear is that rebates will continue to be kept by the PBMs and insurance companies to pad their enormous profits instead of going back to consumers and seniors especially who would have benefitted the most from this proposal. As expected, insurance company stocks did a victory dance, spiking heavily on the news before the markets opened, as sure a sign as there is that the big-money gravy train will keep steaming along on its way to record-profit junction.
Making matters worse is that the White House continues to consider a proposal that borrows price control policies from other countries, where medicine is either unavailable or rationed, and patients wait extraordinary periods for care. These socialist policies being introduced into the Medicare Part D, where government can enforce an arbitrary price cap, will undermine the negotiations with drug makers that have made Part D one of the most successful and cost-effective government programs ever. Consider that for years the main debate over Part D is an argument regarding just how much it came in UNDER its projected budget.
Either way, the White House needs to stay committed to policies that provide real savings for American seniors rather than allow PBMs and insurance companies to keep pocketing record profits through a generous rebate program while instilling socialist price controls into one of our nation’s most successful and cost-saving drug programs. It is important for consumers to learn the facts and tell the White House and Congress to STOP meddling with Medicare Part D, and get serious about fixing a broken rebate program.
