Access, affordability, ambiguity: Who really benefits from federal prescription drug price policies?

Making prescription drugs more accessible and affordable sounds great in theory.

But who really gets the most availability at the best price?

When politicians and policymakers talk about making prescription drugs more affordable, they may mean something different from what patients experience at the pharmacy counter. It’s a distinction worth considering and taking action on, according to the Alliance for Aging Research (AAR).

This spring, Adina Lasser, then director of public policy and government relations for AAR, spoke with Medical Economics to break down the complex landscape of federal drug pricing policy, from Medicare negotiations under the Inflation Reduction Act to most-favored-nation pricing proposals and pharmaceutical tariffs. She explained why policies designed to lower costs do not always translate into savings for older adults at the pharmacy counter, leading to questions that patients have for their physicians.

This transcript has been edited for length and clarity.

Medical Economics: Prescription drug affordability is a key issue for the Alliance for Aging Research. Can you talk about the organization's stance or position on what that means?

Adina Lasser: What we care about most is access and affordability, and that means that what we're thinking about, when we react to a policy, is specifically: Can an older adult, as a result of this policy, have better access to the medications or therapeutics or devices that they and their physician decide is best for them? And then also, will they be able to afford it when they get to the pharmacy counter? There are so many of these policies that we're responding to that talk about affordability, but what they're actually talking about is affordability of these medications for the government or for other entities, not for the patient or the beneficiary at the pharmacy counter. And so when we're thinking about drug pricing policy, what we're thinking about is: What does an older adult actually get out of this policy?

Medical Economics: To begin with some groundwork, what are some of the policies or provisions that the Alliance really supports to bring down out-of-pocket costs for patients?

Adina Lasser: We have been incredibly supportive of any policy that would help older adults afford their prescriptions at the pharmacy counter. We've done a ton of work around the Medicare Prescription Payment Plan, which allows beneficiaries to smooth their costs over the course of the year. That doesn't necessarily bring down the cost, but if you have a copay or a deductible, or even just that Medicare out-of-pocket cap — which is another affordability provision that we've supported and really advocated for. So there's that $2,100 cap. It means that you can take that and, instead of just having to pay that upfront cost at the beginning of the year, you can smooth it out over the rest of the year. So we've supported that. Anything that targets those out-of-pocket costs directly We've really gone after utilization management abuse: stopping somebody from accessing their prescription by requiring a prior authorization, requiring them to fail first on a cheaper therapy through step therapy, or an increase in coinsurance over co-payments, which are all things that we're starting to see percolate throughout the Medicare program. We also work to promote competition — help the FDA get through their approvals, encourage generics and biosimilars, address formulary and rebate practices that block competition. And then, of course, always investing in prevention and early diagnosis so that we can protect people across the lifespan and stop them from needing those more intense and expensive treatments, or things like hospitalization, which can be incredibly expensive. So really, it's all about fixing access barriers, not just list prices.

Medical Economics: From a patient's point of view, I tend to think of access as being two things: actually being able to go to a place and get the drug, or have it delivered to your home, because there is mail-order pharmacy, and then being able to pay for it.

Adina Lasser: I'd add to that, that being able to decide what treatment is correct for you with your physician. There are so many treatments that the label is very similar, and the thing that they're meant to be treating is very similar, but the actual way that they affect your body, it can be very different. And so making that distinction with your physician without the influence or burden of some kind of interference with your insurance, is another one that I would add.

Medical Economics: I'm glad you mentioned about prior authorization, because members of our audience may grind their teeth whenever they hear that phrase. And yet it is a huge part of what our physician audience deals with, and their patients.

Adina Lasser: It is such a waste of physician time. It is such an administrative burden when these people, who are so trained and could be so helpful to so many patients who are waiting months and months to see them, have to spend six-plus hours a day on the phone with the insurance company. It's infuriating.

Medical Economics: This spring, the White House had an announcement about bolstering national security and strengthening U.S. supply chains by imposing tariffs on patented pharmaceutical products. Can you bring us up to speed about what is the situation right now with tariffs on imported drugs and medicines?

Adina Lasser: The White House has been going after these international supply chains. One thing that's really interesting about how medications are made is that when we get a med, we get the packaging, we get the thing itself — and we think, OK, all of that's one thing, right? But often all of the component parts are produced not only in different factories, but in different countries. The Alliance has been very supportive of this goal. What the president's trying to do is protect us by saying, if we're at war with a certain country, we'll still be able to access our medicine, or to disincentivize being charged too much, or bring this manufacturing process home. And on some level, that's a great goal.

On another level, tariffs are an incredibly blunt instrument. All of your medication, before it gets to you, could have gone through China, India, Sweden, all over the world, potentially. And if there are tariffs at every stop along the way, it's just going to make the American consumer pay for them. So we have fought back quite a bit against these tariffs because of this blunt nature of how they impact patients and how they will raise costs for the American people.

Medical Economics: Having availability in a time of kind of geopolitical crisis, the notion of onshoring, bringing production and jobs back to the United States, definitely are worthy goals. So I think that the administration probably finds a lot of support that way.

Adina Lasser: Absolutely. And there's other ways to go about that. The administration has incentivized domestic manufacturing, and a couple of companies have already started to bring their manufacturing back to the U.S. There's ways to do it without making prices more expensive for Americans.

Medical Economics: It sounds like this is an area where that nuance in affordability comes into play.

Adina Lasser: That's absolutely right. It's one of those things where when we say that we're tying what other countries pay to what we pay, who's paying that price? It's the Medicare program. So when we're talking about this, we are not talking about you at the pharmacy counter paying the same thing as a person in France at the pharmacy counter would pay. We're saying, let's just slash the price that the government pays and then hope that doesn't impact access, when we know it will. It does that in a number of ways. Most concerningly, most favored nation prices endorse discriminatory metrics for price-setting that other countries use, and would import them. We have talked before about the quality-adjusted life year (QALY), and I'm sure it's something that your readers are familiar with. But just to give a very basic background: The QALY assigns a monetary value to the additional years of life provided by a treatment or therapeutic. And it really discriminates against older adults and people with disabilities, because what it says is, OK, can this treatment get you back to perfect health? And if not — meaning getting back to being younger, healthier, whatever — if not, it's less worth paying for. For somebody like an older adult, or an individual with a disability, who can't get back to what this metric, on a discriminatory basis, considers perfect life, then that treatment is not worth paying for. This is not something that we do in the U.S. It's not something we've had to do. It is explicitly banned in the Medicare program because of how it discriminates against older adults and individuals with disabilities, and that was done in the Affordable Care Act (ACA). But if we start importing the prices that are set using the QALY, suddenly we have imported that kind of rationing of care.

Medical Economics: It seems counterintuitive in the sense that by making drugs more affordable, in theory, they should become more accessible, even at the pharmacy counter level. And it sounds like that doesn't always happen.

Adina Lasser: It definitely doesn't. One other place that we're seeing that is in the Inflation Reduction Act (IRA). Now Medicare can negotiate the price of drugs, so we have actual data on this. They have lowered the prices and we can say, how did that actually change the price for beneficiaries? And only about 11% of Medicare beneficiaries that are on these drugs have actually seen their prices get lowered at the pharmacy counter. And at the same time, pharmacies, especially small, local, community pharmacies, are no longer carrying some of these drugs, so patients lose access that way. They are being moved around on formularies so that they're less incentivized [to use those drugs]. And that's because of the complex dynamics of how pharmacy benefit managers (PBMs) price and incentivize drugs to be paid for. But there are all kinds of downstream effects. And then at the same time, insurance companies, because the goal is to get them to pay more of their share of the pie, are doing whatever they can to put that back on patients. So people are seeing an increase in utilization management abuse, right? It's like, we change one little number and it's over. But actually at the pharmacy counter, beneficiaries aren't really benefiting.

Medical Economics: We talk about the pharmacy counter, but then patients in the exam room are asking their primary care physicians about why a drug is priced the way it is. What would you advise physicians to tell their patients about all these complexities?

Adina Lasser: At the patient level, what really matters is what their plan says. The time that you have the most control is — well, of course, when you vote, that's part of it, right? Who are the politicians in place making the policy? And then directly for your life, at open enrollment, when you're looking for the plan that will best suit you. For Medicare specifically, there's the medicare.gov plan finder that will tell you, at this pharmacy, how much will your drug cost on this plan. And so that's the time that you have the most control. It's important to check every year. A lot of older adults will just pick a Medicare plan the year they turn 65 and stay on it for the rest of their life. They are costing themselves money by doing that, by not doing this sort of aggressive, proactive work of trying to find the plan that best suits them, because plans will change over time, and the plan that best suited you last year might not be the plan that best suits you this year. If physicians are interested in getting into list prices versus sale price and net price, that's something that you can explain to your patients, if you're interested in doing so. But actually, I think what matters to them is: What does their plan cover, and what do they have access to?

Medical Economics: There's been a lot of attention devoted to the TrumpRx online platform. Can you describe what that is, and has the Alliance had a chance to analyze any results coming out of that?

Adina Lasser: We haven't seen any research out of that. What I will say is that TrumpRx is another entry in this push to do direct-to-consumer pharmaceutical pricing, meaning that I as the company set the price, and then I as the consumer can go and buy it for that price without my insurance company getting involved. On some level, I think that does work to increase access, because often it's cheaper than trying to go through your insurance company and then having to pay the price that, if it's not covered, your insurance would otherwise pay. So those can be vastly different. They do all of these negotiations with the insurance companies, so that insurance companies are paying a lot more for a drug, and then if they cover it, you're only responsible for your co-pay, but if they don't cover it, you're responsible for that much higher price. And so direct-to-consumer, it's often a lower price, and in some ways that does increase access.

The place where the Alliance gets concerned is that direct-to-consumer spending does not go towards things like that out-of-pocket cap. It doesn't go toward your deductible. It doesn't give you any of the benefits that actually going through your insurance plan would. If we're going to keep going down that road, we need to reconcile those differences and make it so that direct-to-consumer spending actually does count toward the money that you're required to pay in the first place to your insurance plan before their benefits kick in. Otherwise, you're just paying out of pocket twice, right? If you have that $2,100 cap, and I spent $400 on a medication over here direct-to-consumer, I still have to spend $2,100 before I hit that cap with my insurance company. And that's the concern there.

Medical Economics: What did I not ask about that you would like our audience to know?

Adina Lasser: One thing that we're extremely concerned about is that these most-favored-nation pricing policies are going to reduce access, are going to bring in discriminatory metrics, [and] are going to hurt investment into therapeutics and procedures that impact older adults. That is something that the administration is really pushing for and has been pushing Capitol Hill on. We haven't seen any legislation around this, but the administration has been asking for codification of most favored nation pricing, putting it into law and statute. We are very concerned about this. And one thing that we're asking is that before anything goes out into the world, or before there's a bill, that legislators involve the patient community in those conversations so we can make our case before it's too late and we have something that's unchangeable.