6 things to know before the HHS forum

Robert Zirkelbach
Robert Zirkelbach November 19, 2015


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Tomorrow, the Department of Health and Human Services (HHS) will host a forum on pharmaceutical innovation, access, affordability and better health. We welcome the opportunity to discuss how we can ensure patients have access to the care and treatments they need without unnecessary barriers. And while discussions about cost are important, we need to look at spending across the health care system to find solutions that ensure access to high quality, patient-centered care and continue to encourage development of innovative, life-changing medicines.

Medicines help patients live longer, healthier lives. Over the last 25 years, medicines have helped changethe way patients are treated and helped those diagnosed with debilitating diseases live longer, healthier lives. Not long ago HIV was an acute, fatal illness. Today, thanks in part to innovative medicines, the death rate has fallen nearly 85 percent since its peak, and is now considered to be a manageable, chronic disease.  Therapeutic advances have also transformed treatment of rheumatoid arthritis. Previous treatments were limited to addressing the symptoms of the disease. Now, medicines target the underlying sources of inflammation, halting progression of the disease.

Here are the 6 things you need to know ahead of the forum:

  1. Conversations about cost need to look at spending across the health care system. The share of health care spending that goes toward life-saving medicines has been consistent for more than 50 years and is projected by government actuaries to grow in line with health care costs through the next decade. This is possible due to a competitive marketplace for medicines where generic utilization rates are high, robust competition among brand name medicines takes place and aggressive negotiation occurs to lower prices. Learn more at PhRMA.org/cost.
  2. Increasingly high cost sharing and restrictions on access are creating barriers for patients. Patients are facing real barriers to accessing needed medicines as a result of their health insurance coverage. Deductibles for prescription medicines, high copays and coinsurance, step therapy and prior authorization and placement of all medicines to treat certain conditions on the top tier put a burden on patients. Learn more at AccessBetterCoverage.org.
  3. Prescription drugs are NOT a primary driver of insurance premium increases. Despite claims from insurers about the impact of medicine costs on premium increases, their own data indicates otherwise. The largest driver of premium increases is hospital services, accounting for $10.06 (nearly half) of the $25.26 average increase in monthly premiums in 2016. Read more.
  4. Net medicine price increases are the lowest in the past five years. A recent research brief from IMS Health found after accounting for discounts, rebates, coupons and other concessions to payers, net price increases in 2014 for branded medicines was the lowest in the past five years at just 5.5 percent, which was in line with overall health care spending growth. According to IMS, “payers appear to be limiting overall branded product price growth through the negotiation of discounts and rebates.” Read more.
  5. Paying for value must ensure patients can receive high-quality care and access to the newest, most innovative treatments. PhRMA has long supported the development and use of sound, patient-centered tools to help guide decisions about which treatment options are best for the individual patient. Value assessment tools hold significant implications for patients and health care providers and should be flexible and account for patient preferences. It’s important to ensure that patients have adequate coverage and affordable access to the tests and treatments they need, and are able to work with their physicians to select the medicines that best meet their individual needs and treatment goals. Learn more about value at the crossroads and PhRMA’s payment and delivery reform principles.
  6. Successful negotiation in Medicare keeps costs low for beneficiaries and taxpayers. Large powerful purchasers negotiate directly with prescription drug manufacturers to secure discounts and rebates under the program. In fact, Medicare requires that Part D plans provide beneficiaries with access to negotiated prices for covered drugs and the Medicare Trustees report that brand rebates are substantial. The government would not be able to negotiate lower prices than already exist without imposing restrictions on access or coverage of medicines for beneficiaries. Read more about how successful negotiation takes place.

Learn more about costs in context at PhRMA.org/cost and in our slide deck available here. For more from PhRMA, subscribe to instant updates.

Topics: Access, Drug Cost, Medicare, Value-Driven Health Care, The Value Collaborative