Ed's Blog

In response to a Request for Information from the Department of Health and Human Services (HHS) to comment on its "Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs", we joined Consumers Union and other leading groups in a consumer group comment letter. In particular, we detail ways to rein in abusive and anti-competitive practices of both Pharmacy Benefit Managers (PBMs) and Big Pharma's brand name drug companies that force American consumers to pay too much for health care. Our comments support many of the proposals from Secretary Azar and HHS.

From the comment letter: "With the Blueprint, HHS has taken what could be important first steps toward actually bringing down and controlling the escalating costs of prescription drugs. These rapidly increasing costs threaten our nation’s ability to control the cost of health care overall. The unreasonably high out-of-pocket cost for prescription drugs threatens patients’ access to medicines, as some may choose to stop or delay treatment because they cannot afford it. Ensuring that patients can afford life-saving and life-managing prescription drugs is critically important to the public health of the nation, because it will increase usage of necessary medications that help patients live longer and healthier lives. Accordingly, the Administration’s efforts to contain drug costs are appreciated."

The letter goes to explain the anti-competitive practices of a smaller and smaller set of Pharmacy Benefit Managers (PMS) -- arrogant middlemen who dictate to insurance companies and others their increasingly take-it-or-leave-it demands, including the use of outrageous gag clauses that prevent pharmacies from telling consumers about lower-cost options:

"Although PBMs offer the potential to control pharmaceutical costs, there has been a pattern of conflicts of interest, self-dealing and anticompetitive conduct, all of which ultimately means that consumers pay more for the drugs they need than they should. After a comprehensive study, the White House Council of Economic Advisers found that the three large PBMs control more than 85% of the market, “which allows them to exercise undue market power against manufacturers and against health plans and beneficiaries they are supposed to be representing, thus generating outsized profits for themselves.” Indeed, PBMs make larger profits than any other players involved in the drug supply chain (distributors, insurers, or pharmacies). PBMs take advantage of a lack of transparency, misaligned incentives, and conflicts of interest. Ultimately this leads to higher drug costs."

The comment letter goes on to commend Secretary Azar and FDA Commissioner Gottlieb for their efforts to prevent Big Pharma's politically powerful brand name drug companies from using unfair tactics to "game the system" and delay market access to lower cost generic and biosimilar drugs. U.S. PIRG has also long supported state and federal agency efforts -- including in the courts -- to stop Big Pharma practices such as "product-hopping" and "pay for delay.

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