'Behind-the-scenes' pricing remains in shadows despite HHS plan

Friday, May 10, 2019
Chris Woodward (OneNewsNow.com)

prescription drug costsA health policy expert argues that a new federal rule intended to boost transparency of drug prices may actually have the opposite effect and end up creating even more confusion.

The U.S. Department of Health and Human Services (HHS) made a splash this week when it announced a new rule saying drug companies must disclose the list price of a medication in commercial advertisements. In its May 8 announcement, the federal agency notes that drug companies currently are required to disclose the major side effects a drug can have – but not the effect it could have on consumers' wallets.

"If we want to have a real market for drugs, why not have [companies] disclose their prices in the ads, too?," asked HHS Secretary Alex Azar. "Consumers would have much more balanced information, and companies would have a very different set of incentives for setting their prices."


But a scholar with the Institute for Policy Innovation says Azar's rule "misses a critical point" if the objective is to make drug prices more transparent for consumers.

"The list price that drug companies would be putting on the TV ads is just simply not what most people pay," says Merrill Matthews, Ph.D., who explains why that's the case.

"Pharmacy benefit managers [PBMs] negotiate significant discounts from the drug companies and then make those available to insurers and pharmacies," he explains. "Insurers also get discounts in there; and then people, if they have health insurance, they often times end up getting a significantly discounted price when they're at the pharmacy.

"So, the list price that might come up [in an ad] just simply is not what the vast majority of people will pay, either through arbitrage or through discounts from insurance."

In an article about the new HHS rule, Matthews states if there's a "silver lining" it would be that the rule might put pressure on major players in the healthcare industry to "reform how products and services are priced, so that list prices are more reflective of what consumers actually play."

In addition to drugs, HHS says it is reviewing comments on a number of other proposed rules to deliver more transparency and fix opaque systems and perverse incentives for a range of items and services.

Consider Supporting Us?

The staff at Onenewsnow.com strives daily to bring you news from a biblical perspective. If you benefit from this platform and want others to know about it please consider a generous gift today.



We moderate all reader comments, usually within 24 hours of posting (longer on weekends). Please limit your comment to 300 words or less and ensure it addresses the article - NOT another reader's comments. Comments that contain a link (URL), an inordinate number of words in ALL CAPS, rude remarks directed at other readers, or profanity/vulgarity will not be approved. More details




I agree with this HHS proposal reversing the Obamacare section benefiting transgenders primarily because …





Tornadoes rake 2 Oklahoma cities, killing 2 and injuring 29
Israeli president shocked by German kippa warning
Iraq offers to mediate in crisis between its allies Iran, US
Venezuela negotiators return to Norway for crisis talks
Mike Pence: West Point grads should expect to see combat
Flooding leads to Oklahoma and Arkansas evacuations
New candidates vie to succeed UK’s May with focus on Brexit
Bolton says N. Korea missile tests violated UN resolutions


Gillette is at it again: This time featuring Samson, a transgender man shaving for the first time
French police hunt man who planted explosive device in Lyon, release surveillance photos
Tornado strikes El Reno, Oklahoma; at least 2 deaths confirmed: reports
Thousands march in Hong Kong to commemorate June 4 protests
Israelis protest moves to grant Netanyahu immunity, limit Supreme Court


Cartoon of the Day
Flat in Chick-fil-A drive-thru lands man free tire change, dessert

Chick-fil-A emblemA customer was blessed with more than a tasty chicken sandwich when he broke down with a flat tire in a Tennessee drive-thru this month, as Chick-fil-A employees served up not only a free tire change and two free cookies, but a fresh hot meal they switched out for his original cooled-down order.