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New federal prescription drug policy will lower prices, Northeast Ohio health policy experts say

Bottles of medications ride on a belt at a mail-in pharmacy warehouse in Florence, New Jersey.
Julio Cortez
"If American taxpayers paid to help invent a prescription drug, the drug companies should sell it to the American public for a reasonable price," said White House Domestic Policy Advisor Lael Brainard.

The White House unveiled a series of health policies and guidelines Dec. 8 designed to lower prescription drug and other healthcare costs by targeting what administration officials said are anticompetitive practices of pharmaceutical companies, hospitals and health insurance companies.

The Biden administration proposal includes a framework establishing, for the first time, cost as a factor in determining whether to expand the license for new drugs or other medical treatments developed using taxpayer dollars to additional companies. The government would allow additional companies to sell a drug

The White House’s proposal would let another company make a drug if a corporation used tax-payer dollars to develop it and then overcharges consumers.

The cost to consumers must be considered when deciding whether to expand licenses because taxpayers helped fund the development of these new medicines and treatments, said White House Domestic Advisor Neera Tanden.

"When drug companies won't sell taxpayer-funded drugs at reasonable prices, we will be prepared to allow other companies to provide those drugs for less," said White House Domestic Policy Advisor Lael Brainard during a Dec. 6 briefing. "If American taxpayers paid to help invent a prescription drug, the drug companies should sell it to the American public for a reasonable price."

Local public health experts said this policy change should make a big difference for local consumers, especially seniors who live on a fixed income.

This policy will put guardrails on for-profit companies, Center for Community Solutions’ Loren Anthes told Ideastream Public Media.

"I think that this is an appropriate regulatory response to ensure that especially as it comes to tax dollars, that these entities are achieving quality and efficiency appropriately and aren't leaving behind... people who rely on Medicare and Medicaid and marketplace and other services in order to receive health care generally," he said.

This policy will help elderly residents obtain the drugs they need as well as other essential support, said Tommy York, of the Western Reserve Area Agency on Aging.

"For our people that we serve here who are on limited income, being able to go and get EpiPen, that's expensive," he said. "It's not always covered. It's a life-saving treatment, right? So being able to negotiate prices and create competition... would allow our members, our consumers, to be able to afford a life-saving treatment."

This would also allow Medicare Advantage plans to spend more on other services, York said. Medicare Advantage are Medicare plans offered by private companies.

Applying savings from this proposed drug policy will allow those plans to "look at other supplemental benefits that could help reduce the social determinants of health," he said. "That's just a piece of mind right there."

These additional benefits go beyond healthcare, York said.

“Transportation, food insecurity, housing — I mean, there's all these other needs that are still out there that we can go after with these funds that potentially are being saved,” he said.

The proposal will now undergo a public comment period where the public and others, including companies and associations, can weigh in on the proposal. The public comment period ends Feb. 6.

In addition to this proposed drug pricing policy, the administration also announced plans to investigate what it says are a growing number of anticompetitive mergers and acquisitions in the health care industry that could lead to higher health care costs.

The White House is directing the Department of Justice, the Federal Trade Commission and the Department of Health and Human Services to issue a joint request for information to assess "to seek input about how private equity and other corporations’ increasing power and control of our health care is affecting Americans," according to a Dec. 7 fact sheet issued by the White House.

"The agencies will use this joint Request for Information to identify areas for future regulation and enforcement prioritization, and they will continue to work together on case referrals, reciprocal training programs, data-sharing, and further development of additional health care competition policy initiatives."

The White House announced also said it plans to attempt to increase transparency regarding ownership of health facilities and the operation of Medicare Advantage plans.

Transparency regarding medical facility ownership helps consumers understand how different facilities stack up in terms of safety, costs and performance, according to the fact sheet.

"Making ownership information transparent allows for identification of common owners with histories of poor performance, analysis of trends on how market consolidation impacts consumers, and evaluation of the relationships between ownership and changes in health care costs and outcomes," the fact sheet said.

Transparency regarding Medicare Advantage plans will help ensure these plans, which the White House said account for nearly 50% of Medicare enrollment nationwide, provide sufficient access and quality of coverage.

Stephen Langel is a health reporter with Ideastream Public Media's engaged journalism team.