Tracy Russell of CoverMyMeds Discusses Potential Legislation Impacting Drug Rebates

There are several pieces of legislation could have an impact on drug rebates, explained Tracy Russell, senior director, government affairs, CoverMyMeds.

Transcript

How does the move to value-based care influence how specialty pharmacies operate and who they work with?

As value-based care becomes more prevalent, there's more opportunities for the specialty pharmacies to generate additional revenue and provide more value. Under value-based care, specialty pharmacies can be an active participant with payers and biopharma companies in the delivery of care and reporting those outcomes. As a result, the specialty pharmacy can play an integral role in these arrangements and their success in providing even more value to all players.

With the prices of specialty drugs rising and these therapies representing a larger market share, there has been a growing focus on drug rebates. What policies can be enacted that will affect drug rebates and the role they play in what drugs are covered and given favorable placement on formularies?

There are several pieces of legislation that could impact rebates. Medicare inflation rebates would require biopharma companies to pay rebates for Medicare Part D and Part B drugs. Those price increases are faster than inflation. And so, because a manufacturer cannot recoup an annual cost increase by increasing prices faster than inflation, new product launch prices could be a little higher. And because the provision applies to only commercial markets, the folks who have job-based coverage could see a higher cost as well.

Part D plans use manufacturer rebates to lower the premiums. Manufacturers might not be able to increase prices above the inflation threshold, which will lower the plans rebates as the gross price approaches to meet the net price. And as a result, Part D premiums could potentially increase. If plans can't make up their lost rebate through premium increases, they'll seek to recover payments probably through pharmacies to make up the loss of revenue.

The Medicaid best price policy would require pharmaceutical manufacturers to enter into a national agreement with [the Department of] Health and Human Services, whereby the states get the best price offer to any purchaser in exchange for the Medicaid coverage of the manufacturer’s drugs. There's a minimum rebate formula and inflation-generated rebates that are included.

And then there's copay maximizers. The product is a maximizer program that could remain in the plans' formulary and may be eligible for rebates in administrative fees.