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HHS Secretary Alex Azar backs point-of-sale drug rebates by UnitedHealthcare, CVS Health

HHS Secretary Alex Azar backs point-of-sale drug rebates by UnitedHealthcare, CVS Health

Director of Pharmacy Plan Services says Azar is out-of-touch as the discounts are unfair to healthier members of the plan who are footing the bill

Cigna’s announcement that it is buying Express Scripts is the tip of the iceberg for what’s happening with insurers’ push to control the cost of prescription drugs.

CVS Health’s proposed acquisition of Aetna will help consumers manage out-of-pocket drug costs and provide transparency, said Tom Moriarty, chief policy and external affairs officer, during America’s Health Insurance Plans National Policy Conference on Thursday.

CVS Health has had a point-of sale rebate program in place since 2013 that has helped 12 million members reduce their out-of-pocket costs, he said, presumably referring to UnitedHealthcare’s announcement this week that starting in 2019, it will pass savings from drug rebates directly on to consumers at the point-of-sale rather than using the funds to reduce premium prices.

“With more and more consumers in health plans with high deductibles, many are seeing the true cost of their medications for the first time, often at the pharmacy counter when they go to pick up their prescription,” Moriarty said.

CVS Health has also developed a system using the electronic health record that shares member-specific drug cost information, formulary coverage and available lower-cost alternatives with doctors at the moment they are writing the prescription.

Through this, physicians are able to switch the patient’s drug when it is not covered on their formulary or go to a less expensive option, Moriarty said.

Health and Human Services Secretary Alex Azar praised the point-of sale discount program by UnitedHealthcare to bring down the cost of prescription drugs for many patients and to give greater price transparency, which aligns with HHS goals.

“In both healthcare services and pharmaceuticals, the huge gaps between the list price and the actual price are notorious. It’s like the gap between the $500 rack rate on the back of the door in your Hampton Inn room and the $100 you actually pay,” Azar said during the AHIP conference. “This thicket of negotiated discounts makes it impossible to recognize and reward value, and too often generates profits for middlemen rather than savings for patients.”

However, Ben Johnson, director of Plan Pharmacy Services for Union Pacific Health Systems said Azar is out of touch with how the current system works and the point-of-sale discounts do a disservice to healthier members of the health plan.

“By giving the rebate to the consumer, there is no relief to the healthier members of the plan that are footing the bill for everyone else,” Johnson said. “The whole concept of a health plan is to spread the risk and the costs of care over a large population of people. Those who are sick benefit from the healthier members in the plan.  The premium that is not used by healthier members subsidizes or helps pay for the care of the sicker members.”

Specialty drugs are between 35 and 45 percent of a plan’s pharmacy budget but only 2 to 3 percent of the plan membership get the benefit from these medications, he said.

“As more specialty drugs come to the market, this will only increase,” he said. “Premiums and out-of-pocket deductibles will continue to increase to pay for the new wave of specialty drugs coming to market. These rebates should continue to be used to reduce the price of premiums so everyone in the plan benefits from the discount and not just the individual using the medication or getting the procedure. This is only fair.”

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