Michael D. Hogue, PharmD, FAPhA, FNAP, FFIP

Michael D. Hogue, PharmD, FAPhA, FNAP, FFIP

Michael D. Hogue is the 15th Executive Vice President and Chief Executive Officer of the American Pharmacists Association (APhA).

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Published on Friday, August 20, 2021

The federal government needs drug price solutions. We’ve got their back.

APhA was the only pharmacy organization invited to participate. We showed up as THE voice of pharmacy to deliver the message that PBM reform, protecting the supply chain, and leveraging biosimilars are key to controlling runaway drug costs.

When we call out PBMs for their behind-the-curtain dealings, we’re not just spewing rhetoric. We’ve got the evidence to prove our point. Here’s Exhibit A: In 2019, Medicare Part D spent over $2 billion on a brand-name arthritis drug. We gave them Florida’s Medicaid data showing that if patients prescribed this drug were not steered toward PBM-affiliated pharmacies—if they could get their drug at the pharmacy of their choice—Florida would have saved over $1.5 million.

That’s huge. A $1.5 million savings on one drug in one year in one state. Imagine the potential savings if we apply these lessons to Medicare Part D. If we keep letting PBMs force people to use the pharmacies they own, we’re allowing them to fleece taxpayers and siphon money from Medicare patients who desperately need these therapies.

Patient steering is just one of PBMs’ dirty dealings. They also employ hidden pharmacy “clawbacks,” like DIR fees; artificially inflate list prices; utilize spread pricing models that rip off payers but provide no corresponding savings for beneficiaries; and engage in anticompetitive vertical integration in the health care space. The administration can act today and stop the chicanery in its tracks.

Unfortunately, the administration has made moves to try chasing artificial bargains abroad. APhA is staunchly opposed to Canadian drug importation schemes that offer a false promise of lower prices and make our drug supply chain less safe. We communicated to our partners at HHS that the best solutions to high drug prices are homegrown.

FDA can do more to address drug shortages, which can make drug-pricing games worse. They should use existing tools or seek expanded authorities through legislation to monitor manufacturing capacity, production, and distribution more closely to mitigate drug shortages and market disruptions. The government could also implement regulatory and market incentives that bolster the availability, quality, and safety of pharmaceuticals—including increasing domestic production.

Policymakers could realign incentives so patients can benefit from the market competition offered by the introduction of more biosimilars and generic drugs. And HHS could leverage pharmacists’ services in counseling patients about the availability of these less-expensive options.

If the federal government is ready for lower drug prices, APhA has realistic solutions to share. We know the way forward—just follow the straight line between pharmacy and health care that offers all Americans a fair deal.

Our Government Affairs team is closely watching for the final HHS report and will provide analysis on how it affects pharmacists and their patients when it’s released. Follow APhA's Twitter, Facebook, and LinkedIn accounts for updates.

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