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HHS Releases Proposal to Lower Rx Drug Costs

Health and Human Services (HHS) Secretary Xavier Becerra last week released a comprehensive plan to lower drug costs, as part of President Joe Biden’s executive order on promoting competition in the American economy.

The drug pricing plan includes potential legislative and administrative actions that could be used to lower drug prices, as well as three guiding principles:

  • making drug prices more affordable and equitable for all consumers and throughout the health care system;
  • improving and promoting competition throughout the prescription drug industry; and
  • fostering scientific innovation to promote better health care and improve health.

Support of 340B Program

Becerra’s plan notes the importance of the 340B Drug Pricing Program and its role in supporting the health care safety net. In a public statement, America’s Essential Hospitals applauds the administration’s support of the 340B program.

Potential Administrative Action

The plan also describes actions the administration could take to lower drug prices, including through:

  • Medicare Part B: shared saving programs, value-based payments, and bundled payments for treatment episodes;
  • Medicare Part D: additional cost saving for beneficiaries who use biosimilars and generics;
  • Testing total cost of care models: within Medicare Part B and D;
  • Drug price transparency: using data collection from insurers and pharmacy benefit managers;
  • Food and Drug Administration (FDA) action plans: Using FDA’s biosimilars action plan and drug competition action plan; and
  • Importation: working with state and tribal organizations to develop drug importation programs that reduce costs to consumers without increasing risks to safety.

Potential Legislative Action

A key feature in Becerra’s plan is to support legislation to lower out-of-pocket drug spending, reduce overall drug spending, and slow drug price increases. Becerra outlined potential actions to improve competition by promoting biosimilar and generic drugs and enhancing the regulatory environment and market structure.

Visit the America’s Essential Hospitals coronavirus resource page for more information about the pandemic.

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About the Author

Abigail Painchaud is a policy associate at America's Essential Hospitals.

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