Addressing list prices, reforming rebates and improving market competition critical
Washington (July 11, 2018) – The Alliance of Community Health Plans (ACHP) urges the Administration to act now to bring greater transparency to the pharmaceutical market and lower costs for consumers. ACHP submitted recommendations today in response to the HHS Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.
“The most important thing the Administration can do is address the prices set by manufacturers. High prices determined by drug companies are solely responsible for the situation we find ourselves in today,” said ACHP President and CEO Ceci Connolly. “The calculation of drug list prices is a total mystery. Publishing drug prices and increasing price transparency is the key to increasing affordability for consumers.”
Inefficiencies in the market coupled with abuses by pharmaceutical manufacturers that stifle competition have resulted in unaffordable drug prices for consumers, employers, plans and the government.
Drug rebates are another tactic that often masks the price of medications, distorting the market and potentially leading to higher drug prices. Reforming the use of rebates and possibly eliminating them altogether would improve transparency and negotiations between health plans and manufacturers – meaning better prices for consumers at the counter. ACHP encourages the Administration to lay the groundwork for this reform, including exploring overall costs for consumers, premiums and the impact on drug formularies.
“We would love to see a world without drug rebates,” said Connolly. “While we work toward this goal, it’s time to explore options that improve transparency. Some health plans are already taking promising steps, including implementing contracts that pass 100 percent of the rebate back to the plan or using rebates as value-based refunds.”
Improving market competition is also essential to reining in prescription drug prices for consumers. ACHP urges the Administration to vigorously support passage of the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, bipartisan legislation to eliminate drug company tactics to delay generic competition. CREATES is estimated to generate $3.8 billion in savings for taxpayers and improve competition and transparency in the pharmaceutical market.
ACHP members have a long history of managing drug costs while also ensuring that the 21 million patients they serve have access to innovative therapies. However, the ability of ACHP plans to successfully restrain drug spending is reaching its limit. ACHP looks forward to working with the Administration to implement solutions that provide immediate as well as long-term relief for consumers from high drug prices.
To access the full text of ACHP’s recommendations, click here.
The Alliance of Community Health Plans (ACHP) is a national leadership organization bringing together innovative health plans and provider groups that are among America’s best at delivering affordable, high-quality coverage and care. ACHP’s member health plans provide coverage and care for more than 21 million Americans across 32 states and the District of Columbia. These organizations focus on improving the health of the communities they serve and are on the leading edge of innovations in affordability and quality of care, including primary care redesign, payment reform, accountable health care delivery and use of information technology. To learn more, go to www.achp.org and follow ACHP on Twitter @_ACHP.