Price Transparency Healthcare Policies Reduce Out-Of-Pocket Costs

Barriers in Patient Care

Various health benefit designs that include high deductibles, coinsurance, co-pay accumulators, and step therapy are barriers in patient care. These roadblocks often stand in the way of high-value care for the chronic conditions that drive most health spending. 

Because price transparency tools and benefits checkers allow clinicians to view any information about prior authorization, step therapy requirements, or lower-cost equivalent treatments, such as generic drugs, these tools save thousands of dollars in healthcare costs, benefitting both the patient and the payer.  

"The constant focus on list prices, even though recent net prices have either risen less than inflation or actually gone down, misses or ignores all the factors that contribute to the out-of-pocket cost for a medicine," John O'Brien, National Pharmaceutical Council (NPC) CEO, told PharmaNewsIntelligence.  

"The opaque system of rebates is fueling the gross-to-net bubble; benefit design too often absorbs discounts from pharmaceutical companies intended for patients who need a medication to lower premiums, rather than passing those savings on to patients at the pharmacy counter," he continued.  

The Role of Healthcare Policies

Healthcare policies are an integral part of the US healthcare system that helps shape and protect the health and well-being of the population. Healthcare policies affect healthcare access, drug costs, delivery methods, and privacy.  

Having protocols in place can also help eliminate human error and elicit communication around medical decisions.   

Therefore, many healthcare policies over the recent years aimed to lower out-of-pocket and prescription drug costs for patients. In June 2021, Biden introduced policy recommendations to protect the US pharmaceutical supply chain.  

The main objective of the recommendations was to improve supply chain transparency and incentivize resilience. Policies provide increased transparency to distributors and purchasers of the sources of drug manufacturing and the quality of the facilities that make them. 

Then in July, an expert committee created an ecosystem called the Pharmaceutical Supply Chain Leadership Forum. This group studies the challenges within the supply chain and organizes the participation of key stakeholders in pharmaceutical delivery.  

The forum examines the inefficiencies of the current model and develops potential solutions for a more patient-centered and financially sustainable pharmaceutical ecosystem. Most of the proposed recommendations aim to increase price transparency, including therapeutic alternatives and out-of-pocket costs.  

However, according to O'Brien, one major challenge of healthcare policies is that there's too much rhetoric and "finger-pointing" at who's to blame for a particular problem, rather than understanding how ill-informed policies will impact the supply chain, the entire healthcare system, and patients.  

Patient-Centered Solutions

Therefore, implementing evidence-based, patient-centered solutions can bring high-value care to prescription drug benefits and improve overall patient access.  

"Patients could see significantly lower costs if payers implemented best practices for step therapy, reduced patient cost-sharing, and provided pre-deductible coverage for high-value medicines," O'Brien said.  

In 1992, Congress passed the 340B program, enabling covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. 

In December 2020, HHS released a final rule implementing the 340B Drug Pricing Program administrative dispute resolution (ADR) rule, which offers manufacturers and 340B "covered entities" a means of negotiating certain disputes in a more formal setting without resorting to litigation or private arbitration. The final rule went into effect on January 13, 2021.  

But PhRMA claimed that although ADR was created to help enforce compliance with program requirements, the process is burdensome and has biased conditions that hinder a manufacturer's ability to address violations of 340B program requirements.  

James C. Stansel, PhRMA executive vice president and general counsel, explained in the announcement that the 340B program is "riddled" with problems that prevent it from truly working to help the nation's vulnerable patients access the medications they need.  

And while government price controls have remained a popular talking point for policymakers in 2022, O'Brien stressed that NPC studies have found that savings from government price action are unlikely to be passed on to patients through reduced premiums or cost-sharing requirements. 

Instead, we need increased transparency in the payment systems that patients use to afford their medications, such as the 340B programs. 

Boosting 340B program transparency would allow Medicare Part D beneficiaries to see drastic savings by reducing cost-sharing and capping out-of-pocket costs for patients. The lack of an out-of-pocket spending limit costs Medicare Part D patients thousands of dollars in additional costs if they require specialty medications to manage their health. 

But these policy conversations must be grounded in high-quality data and evidence so experts can fully understand the impact of potential policy changes. 

Data-driven evidence and real-world evidence (RWE) help researchers and other stakeholders draw meaningful conclusions about which interventions are the most effective treatment options for specific conditions and patients.  

RWE provides insights surrounding safety and effectiveness details from a patient's daily life.  

In the policy realm, RWE can inform the development of policies and related actions to show how certain decisions can affect different parts of our healthcare system and patient outcomes.   

However, faulty and insufficient evidence could mean that stakeholders make necessary treatment and policy decisions based on incorrect data.  

O'Brien explained that the NPC's daily work revolves around RWD and valued partnerships to advance science and achieve better patient health through overall transparency.  

For example, NPC researchers recently examined what it would be like if groundbreaking medications for severe diseases like lung cancer and HIV never made it to patients, underscoring the importance of innovation in improving patient health. 

And an NPC-sponsored project with Tufts University pinpointed two looming issues in health technology assessment (HTA), recommending that HTA bodies become more transparent in their reasoning to promote scientific dialogue and report areas of uncertainty. 

Additionally, NPC is shining a spotlight on often overlooked areas of the opaque health care system to elicit public discussions about prescription drugs. The company is delving into research to address benefit design issues that can harm patient access to medications and examine disparities in patient out-of-pocket costs.  

"What's most important is to get it right for patients. We need to optimize our healthcare system so that patients receive the right care and, at the same time, provide the right incentives to sustain next-generation innovation to improve patient well-being and health system efficiencies," O'Brien stated. 

"This is the ultimate responsibility of leading an organization that can help steer a more-informed, nuanced discussion of how policies can effectively target the patients who need them most, removing the barriers of affordability and access," he concluded.