Surprise federal drug rule directs insurers to reveal what they pay for prescription drugs

A proposal sprung by the outgoing Trump administration would oblige insurers to provide customers with estimated out-of-pocket costs for prescription drugs. They also would be compelled to publicly disclose the negotiated prices they pay for medications. The requirements, exclusive of Medicare and Medicaid, raised eyebrows as part of a broader rule issued last month because they were not mentioned in the original 2019 proposal. Drug pricing transparency would take effect in 2022, with the mandate for out-of-pocket estimates following in 2024. Both provisions, advocates contend, would foster market competition and position patients to make better decisions about their health. Lobbies representing drug makers, PBMs, and commercial health plans oppose the plan, which they believe will hurt competition and inflate drug prices. “This rule will disrupt the marketplace dynamics and undermine the highly competitive negotiations that kept net prices for brand medicines at a growth rate of just 1.7% in 2019,” said Katie Koziara with the Pharmaceutical Research and Manufacturers of America. Experts like Harvard University’s Aaron Kesselheim, MD, an expert in prescription drug policy, agree the rule will not necessarily improve drug affordability. “Insurers and pharmacy benefit managers currently use rebates that are hidden from view to drive prices lower. If you make that transparent, you kind of reduce the main strategy payers have to lower drug prices,” explains Kesselheim, who believes stronger action is needed on Capitol Hill. He and others say solutions might include allowing the federal government to negotiate prices, limiting the initial price of new drugs, capping price hikes, and establishing an impartial review process for evaluating the clinical value of drugs relative to cost.