Trump Administration Should Focus on Fixing IRA, 340B: John M. O’Brien, PharmD, MPH

John Michael O'Brien, PharmD, MPH, president and CEO of the National Pharmaceutical Council (NPC), discussed how the current administration could focus on the Inflation Reduction Act, pharmacy benefit managers (PBMs), and the 340B program to help patients with the rising cost of health care.

This transcript was lightly edited for clarity; captions were auto-generated.

Transcript

What do you think are the most pressing questions around drug access that will be addressed in the policy decisions of this administration and Congress?

One of the things that I love most about being in policy and research, as opposed to politics, is that the evidence we generate with our research is useful to policy makers, regardless of who’s in office. Here’s what we know right now: President [Donald] Trump just released an executive order that takes on issues that we've been focused on at NPC for some time, like investigating and fixing the pill penalty that exists within the Inflation Reduction Act drug price negotiation program, taking a good hard look at the 340B program and proposing some reforms to help patients, taking a look at the role of middlemen and their business practices, and otherwise improving transparency within the value chain.

Now, our research and the work of others has identified that the Inflation Reduction Act will delay launches, reduce the number of subsequent indications, and have a chilling effect on postapproval outcomes research. There are also a number of unanswered questions about whether or not patients will benefit from the Inflation Reduction Act’s effectuation, if you will, at the pharmacy counter. There’s uncertainty still about whether or how this law will actually disincentivize the development of small-molecule drugs or drugs with additional orphan designations to help patients living with rare diseases.

On the 340B side, our research has identified that 340B is not a victimless crime that only takes money from pharmaceutical manufacturers. It’s costing employers, it’s costing states, and that’s ultimately costing patients. Our research found that costs for self-insured employers are actually going up about $5 billion to $6 billion a year because of this program, and research from the National Alliance of Healthcare Purchaser [Coalitions] looked outside drug costs and found that a 7.5% higher claims cost is actually costing employers a lot more in health care premiums.

And when we think about pharmacy benefit managers, their business practices are hurting patients. They’re not transparent, and these middlemen are keeping about half of what we call “drug spending” in the United States. I do hope that policy makers take a good look at the evidence, fix the perverse incentives caused by the Inflation Reduction Act, address the way that the last administration interpreted the orphan drug exemption, pass meaningful PBM reform, and help restore the 340B program to its original intent and stop the explosive growth that’s increasing health care costs for self-insured employers.

But most importantly, when it comes to policy, we need to remember that good policy making begins with good evidence, and that’s something that we’re focused on and going to continue to do here at the NPC.