Aug 26, 2020

White House Should Reject Pharma-Backed Policies That Would Hand Drug Companies a Windfall on the Backs of American Taxpayers

Washington, D.C. – The Campaign for Sustainable Rx Pricing (CSRxP) issued a statement Wednesday in response to two alternative drug pricing proposals to Medicare Parts B and D presented by Big Pharma to the Trump administration this week. Big Pharma is pushing the proposals as a counteroffer to the administration’s Most Favored Nation executive order.

“Big Pharma’s long track record of putting profits ahead of patients, including hiking prices during the pandemic, prove the industry cannot be trusted,” said CSRxP executive director Lauren Aronson. “Big Pharma’s alternative proposals would do nothing to lower the prices set by pharmaceutical companies, would hurt seniors and would reward drug companies for their egregious pricing practices with a windfall paid for on the backs of American taxpayers.”

“The White House should reject these Pharma-backed plans and advance market-based solutions that hold drug companies accountable, including by seeking significant liability in the catastrophic phase of coverage for manufacturers,” Aronson said. “At a time when millions are struggling to afford their medications and Big Pharma continues to hike prices, the White House must stand up to their influence and hold drug companies accountable.”

Big Pharma’s proposed reforms to Medicare Parts B and D would do nothing to reduce out-of-control prescription drug prices, would likely increase drug prices over time and would ultimately produce a windfall for manufacturers paid for on backs of American taxpayers.

Big Pharma’s Medicare Part B Voluntary Policy Considerations

  • It is not clear whether this proposal would apply only to fee-for-service (FFS) or would also impact Medicare Advantage.
  • This proposal could reduce Part B drug administration payments to physicians – therefore hurting doctors while doing nothing to lower list prices.
  • There are no mechanisms in this proposal to prevent manufactures from increasing prices.
Big Pharma’s Medicare Part D Voluntary Policy Considerations
  • Shifting five percent beneficiary risk to Big Pharma would do nothing to prevent manufactures from increasing prices and would not necessarily reduce spending for American taxpayers.
  • This policy would do nothing to lower prices for low income beneficiaries because they are not responsible for cost sharing in the catastrophic phase.
  • Because this policy is voluntary, it is not clear that participation would increase competition in the Part D program.

Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.