PUTT’s Statement on President Trump’s Executive Orders for Drug Pricing Reform
Following Friday’s announcement by President Trump of the signing of four new Executive Orders aimed at reducing the price of prescription drugs for Americans, Pharmacists United for Truth and Transparency (PUTT) is cautiously optimistic that some of these Executive Orders will result in the fulfillment of promises made by the President two years ago.
While we are most hopeful for the Executive Order “prohibit(ing) secret deals between drug manufacturers and pharmacy benefit manager middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter” we respectfully ask the Trump Administration to consider the following questions:
- What protections will be ensured for patients, plan sponsors and providers should rebates and other proprietary “deals” be prohibited by law? A documented, defining characteristic of the PBM business model is to rename or reclassify rebates as “management fees” which are then collected and kept by the PBMs. These types of “trade secret” deals have contributed to record profits for PBM middlemen, including those recently announced for CVS and UnitedHealth, despite the COVID-19 pandemic and economic downturn experienced by the rest of the country.
- How will the Trump Administration ensure the elimination of rebates and other secret deals will not result in price increases for consumers? Since the introduction of the President’s plan to eliminate the middlemen, the PBM opposition has made direct, publicly documented threats that ending rebates will result in higher — not lower — prices for consumers. While PBMs have not articulated how the elimination of rebates will cause prices to go up instead of down — or even explained how transparency will cause price increases — they have engaged in a full-fledged PR campaign to shift responsibility onto the drug makers, the pharmacies, the prescribing physicians, the pharmacy contracting organizations and/or any other entity in the prescription drug supply chain other than themselves.
Despite numerous studies on the role of rebates in drug pricing — the most recent published in 2020 — PBMs have managed to not only thrive in the closed market U.S. healthcare system, but have come to dominate it through a series of highly-contested vertical mergers resulting in the consolidation of the insurance provider, the pharmacy benefits designer, the physicians, and the pharmacies. In absolutely no case did these mergers fulfill their promise for lower costs and better healthcare delivery, but in fact had the opposite effect — most notably the acquisition of PBM Caremark by CVS Health in 2006. In many situations, U.S. consumers have seen their drugs’ list prices increase while the net price remained stable year over year, the most famous cases being Mylan’s EpiPen and Eli Lilly’s Humalog.
The PBM business model must be reformed to ensure PBMs act as fiduciaries to the plan sponsor and not as middlemen “rent-seekers” exploiting a fragile system for their own profit gain. For true drug price reform to occur, all forms of “pay to play” compensation between PBMs and drug manufacturers must stop. Ending rebates all together would move prescription care a step closer to a free market, where true market forces, including competition, would lower costs.
As pharmacists, we wholly believe every patient needs and deserves access to affordable medication. We offer our support of any programs that will create transparency so that all U.S. healthcare stakeholders can understand the supply chain dynamics and rationale for drug pricing. We do not support the importation of drugs from other countries, including Canada. We believe this practice will create false hopes for Americans, who will be disappointed with pricing that would be marginally less than what they currently pay, but would be a great deal cheaper if the PBM middlemen and their backroom deals were simply eliminated altogether.
PUTT and our members look forward to patients and providers having the right of quality, affordable access to medication restored, and to providers receiving the respect and level playing field to which they are entitled as medical professionals.