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Is American Patients First good for retail pharmacies?

Written by Tom Ryan

Source: U.S. Department of Health & Human Services

President Donald Trump on Friday unveiled his blueprint American Patients First program, designed to lower drug prices, a plan that seemed to have been expected if not embraced by the pharmaceutical industry.

“We commend the Trump Administration's focus on reducing the cost of prescription drugs, and we agree more can and needs to be done,” said CVS in a statement.

The 39-page proposal included more than 50 initiatives designed to increase competition for medicines, reduce regulations and rework incentives for all players in the pharmaceutical industry.

Among the proposals:

  • Giving Medicare’s private prescription drug plans, known as Part D, “greater flexibility” in negotiating lower prices.
  • Ending a gag rule insurers use to keep pharmacists from telling patients how they save money by paying list price instead of an insurance co-payment.
  • Speeding up FDA approvals of over-the-counter medicines.
  • Pressuring other developed countries to loosen price restrictions and lift the prices of brand-name drugs, with the expectation that pharmaceutical companies would then lower prices here in the U.S.
  • Considering ending rebates that pharmacy benefit managers (PBMs) receive from drug makers in negotiating drug prices for insurers and large employers.
  • Consideration by the FDA of requiring drug makers to disclose prices in television ads.

The plan excludes many of the ideas Mr. Trump had called for on the campaign trail and pushed by Democrats, notably allowing Medicare to negotiate directly with drug manufacturers. The more than 57 million Americans in Medicare would present huge leverage in negotiating prices versus insurers, but drug companies have lobbied hard to prevent government involvement. The plan indicates that few regulations will be imposed over the prices manufacturers charge. Americans also won’t be able to import low cost medicines from abroad.

David Maris, an analyst at Wells Fargo & Co., told Bloomberg the plan marked “a first shot across the bow.”

“The industry is among the most profitable of any industry in the U.S. and as such probably has room to give,” Mr. Maris said. “If it doesn’t reform itself, it will be reformed and this is the beginning of that reform.”

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