What Prescription Drug Importation Could Mean for Brokers
On the eve of the 2018 midterm elections, President Trump unveiled a new part of his “American Patients First” ideology, spurred by the difference in prices Americans pay for certain prescription drugs compared to other countries.
Since then, Congress and the Trump administration have attempted to tackle rising drug prices from multiple angles. In an about-face from the typical Republican stance, the administration began encouraging states to import prescription drugs from Canada as a mechanism to curb costs for consumers. Additionally, Health & Human Services (HHS) recently announced it would begin authorizing pilot projects to import specific drugs, provided they are manufactured safely and meet FDA approval. The FDA will also give manufacturers the chance to offer imported drugs for a lower price than they charge overseas.
Historically, drug importation has been met with regulatory challenges, but proponents argue the global prescription landscape has changed, providing a new opportunity for imported drugs to lower costs.
In another twist, at the moment drug importation from Canada became a hot topic, the Canadian government decisively removed the U.S. from the list of countries it uses as a benchmark to regulate prices. According to its announcement, the U.S. (and Switzerland) were removed because they did not have policy measures in place to curb free market pricing for medicine. This latest move makes the topic of drug importation a bit more complicated.
David Shore, SVP, Enterprise Strategy & Risk Management at Borislow Insurance, sat down with The Council’s Katie Oberkircher to talk prescription drug importation and what it means for the healthcare industry.
With or without the pressure of drug importation, the transparency train has already left the station. Of critical importance will be how that sausage ultimately ends up being made. Again, there are powerful stakeholders with a lot to lose who are aligning against change. We need to operate with continuous vigilance to ensure “transparency” does not become co-opted by these folks.
The depth and breadth of consulting that only a few years ago was reserved for jumbo clients has come down-market to employers with fewer than 200 covered employees. Looking specifically at the pharmacy supply chain that includes manufacturers, wholesalers, PBMs and pharmacies, the transparency discussion has already taken root. With a focus on value for employers and plan members, new opportunities to disrupt the opaque traditional (spread) pricing models via pass through (transparent) ones have become a regular part of our discussions with employer clients. Moreover, opportunities to negotiate pharmacy rebates via minimum guarantee, reinvested and point of sale strategies make for transparent, data rich conversations that drive actionable and meaningful bottom-line results. As a result, advisers must be proficient here to create value for their employer clients and their plan members.