The Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen proposes to reduce drug costs by applying rebates paid to Pharmacy Benefit Managers (PBMs) to the patient’s point of sale. This requires the HHS Secretary to complete the rulemaking process to remove rebates and discounts received by PBMs from drug manufacturers from safe harbor protection under the anti-kickback statute. The Secretary must also establish new safe harbors that would permit PBMs to apply discounts to the patient’s point of sale to reduce their out-of-pocket expenses. Before the Secretary proceeds with the previously mentioned rulemaking, they must publicly confirm that this change will not increase Federal spending, Medicare premiums, or patients’ out-of-pocket costs.
The expert panel agreed that this executive order will increase drug spending. The experts agreed that this policy will not affect drug list prices; they were split on if the policy will moderately increase or decrease net prices. The experts agreed that Medicare patients would see an increase in access to drugs, but no other patient group would see any change in access.
The experts generally agreed that eliminating kickbacks to middlemen advances drug spending policy, though they were split on if it would be minimal or moderate (one expert argued it does not advance drug spending policy at all). Most experts agreed that the precedent-setting value of the executive order is a strength of the policy, another strength of the policy is the size of the affected patient population. Experts also agreed that the ability to be implemented and the evidence base in support of the executive order are both weaknesses of the policy.
Experts highlight many considerations for policymakers. The most important consideration is that it is actuarially difficult for this policy not to increase federal spending, Medicare premiums, or cost-sharing, as the executive order requires. Other key considerations include the uncertainty of PBMs’ response and that past scores of similar policies have projected increases to Medicare costs and premiums. Additional considerations include the uncertainty of manufacturers’ response to maintain their profits and the possible changes to benefit design.