(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA)recently submitted a letter to HHS Secretary Tom Price offering policy solutions to reduce prescription drug costs and a list of guiding principles on how the prescription drug marketplace works.

The letter reiterates pharmacy benefit managers’ (PBMs) commitment to facilitate decisions by payers on issues like the disclosure of rebates and how those rebates are used to reduce enrollee premiums and cost-sharing. PCMA notes, however, that such decisions address how to redistribute existing savings not reduce overall costs. Reducing costs requires increased competition among drugmakers.

“In order to understand which policy solutions will reduce prescription drug costs, policymakers must first understand how drug pricing works and how PBMs help reduce costs for payers and patients,” said PCMA President and CEO Mark Merritt.

PCMA’s letter outlines guiding principles on how drug pricing and pharmacy benefit management work:

  • Drugmakers alone set drug prices. There’s no correlation between price increases and rebates for brand drugs.
  • PBMs negotiate discounts and recommend benefit designs to promote the most affordable drug and pharmacy options.
  • The key to reducing costs is to increase competition. Drugs with the least competition often carry the highest prices and lowest rebates.
  • PBMs are transparent in their negotiations with payers, who decide how rebates are passed through and used to reduce premiums, deductibles, and cost-sharing.
  • While PBMs offer and can help implement point-of-sale rebates in the commercial market, that approach raises beneficiary premiums and taxpayer costs in Medicare Part D.
  • PBMs encourage drugmakers to offer payers alternative ways, besides rebates, to reduce net costs.

PCMA-priceletterRead the Letter

In addition, PCMA is making strategic recommendations to enhance private sector cost-cutting tools in Medicare Part D, Medicaid, and commercial markets.

These policy recommendations include:

  • Eliminate the use of Risk Evaluation and Mitigation Strategies (REMS) to delay competition.
  • Allow for FDA accelerated approval of brand drugs that have the potential to create competition.
  • Create a safe harbor from Medicaid Best Price for value-based drug price negotiations.
  • Expand drug coverage options for health savings account (HSA) eligible high deductible health plans (HDHP).
  • Require substitutable biosimilars to bear identical labeling and naming.
  • Reduce innovator biologic exclusivity to seven years.
  • Make biosimilars subject to the 50% Part D coverage gap discount.
  • Remove Medicare Part D’s protected classes.
  • Encourage greater use of generics for Medicare Part D low income subsidy enrollees.
  • Eliminate “pay-for-delay” agreements that keep generics off the market.

PCMA and its member companies look forward to working with the Administration and Congress to reduce prescription drug costs while maintaining high quality pharmacy benefits.