HHS’ Azar Lists Drug Pricing as One of Four Top HHS Priorities

Feb. 20, 2018 – In President Donald J. Trump’s FY 2019 Budget, drug pricing is one of the top priorities for the Department of Health and Human Services (HHS), according to HHS Secretary Alex Azar.

“The President’s budget makes investments and reforms that are vital to making our health and human services programs work for Americans and to sustaining them for future generations,” Azar said in a Feb. 12 statement. He noted that the top four HHS priorities are addressing the opioid crisis; bringing down the high price of prescription drugs; increasing the affordability and accessibility of health insurance; and improving Medicare to focus on value over volume.

The budget proposes legislative solutions that would help seniors by shielding Medicare beneficiaries from high drug prices, give plans more tools to manage spending, and “realigning incentives in the Part D drug benefit structure.” The HHS Budget in Brief document states that proposed changes “enhance Part D plans’ negotiating power with manufacturers; encourage utilization of higher value drugs; discourage drug manufacturers’ price and rebate strategies that increase spending for both beneficiaries and the Government; and provide beneficiaries with more predictable annual drug expenses through the creation of a new out-of-pocket spending cap.”

When asked about the budget’s drug pricing proposals at a Congressional budget hearing, Azar stated that under the proposal, Medicare Part D recipients who have reached the catastrophic coverage phase would have more of the cost of their prescription drugs paid for by private insurance and less by the federal government, a Feb. 15 article in STAT reported.

Addressing the proposal to change the way out-of-pocket costs are calculated, Azar said that required discounts would no longer count as out-of-pocket costs, reducing the insurance company’s incentives to use brand-name drugs with high list prices, according to STAT, which states that “it’s not clear if it would encourage the drug companies themselves to lower drug prices.”

Azar also noted that generic drug approvals can increase competition and lower drug prices, and vowed that he would like to expand the biosimilar market to increase competition.

“In particular, the budget’s efforts to reduce the high cost of prescription drugs, especially for America’s seniors, are a reflection of President Trump’s deep commitment to addressing this important issue,” Azar said.