WASHINGTON, D.C. — In light of the news that Health and Human Services Secretary Alex Azar proposed a new rule to end the safe harbor protections for rebates in government prescription drug programs, Patients For Affordable Drugs founder and cancer patient, David Mitchell, issued the following statement:

“The proposed rule is a serious step forward. It would begin to rid our system of secret deals between drug companies and pharmacy benefit managers that drive up prices and hurt patients.

“It’s important to note that the proposed rule does not lower list drug prices or address the monopoly pricing power of drug corporations. So this rule will not lower prices for sole-source drugs or the most expensive biologic drugs that lack competitors. To address that problem, we need direct price negotiations with drug corporations in Part D and reference pricing as proposed for Part B.

“However, today’s actions — to ensure savings go to patients and not to PBMs — will deliver much-needed relief for patients at the pharmacy counter. We thank Secretary Azar for his focus on the drug pricing crisis, and we look forward to implementation of a final rule.”

BACKGROUND

• While we have questions about the proposed rule, we support two key aspects:
  • Under the rule, instead of paying PBMs for favorable placement on formularies, drug companies will be motivated to negotiate deals that pass lower prices and savings directly to consumers. They will compete on the lowest price for patients.
  • If enacted, the proposed rule should lower drug prices for patients in Medicare, especially those with the highest-priced prescription drugs.
• HHS acknowledges that this proposal may increase premiums to some extent, but that savings in out-of-pocket costs should more than offset higher premiums. We would add that transparent discounted prices and an end to secret kickback deals should also contribute to more favorable arrangements and savings for patients. Sunshine is an excellent disinfectant.