Health insurance companies will have to give their customers estimated out-of-pocket costs for prescription drugs and disclose to the public the negotiated prices they pay for drugs, under an unexpected new Trump administration rule.
The administration said those requirements, part of a broader rule issued Oct. 29 forcing health plans to disclose costs and payments for most health care services, will promote competition and empower consumers to make better medical decisions.
The new rule does not, however, apply to Medicare or Medicaid.
The drug price provisions, which would not begin until 2022, were a surprise because they were not included in the original proposed rule issued in 2019.
It's the departing Trump administration's most ambitious effort to illuminate the complex, secret and lucrative system of prescription drug pricing, in which health plans, drug manufacturers and pharmacy benefit management firms agree on prices. The administration and Congress have tried and failed to reform part of that system — the rebates paid by drugmakers to the pharmacy benefit managers to get their products onto insurance plan formularies. Those payments, which some call kickbacks, are widely blamed for driving up costs to patients.
Patient advocates and policy experts, while generally supportive of the administration's transparency concept, are divided on the cost-saving value of the new rule. Many say Congress needs to take broader action to curb drug prices and cap patient costs. Groups representing drugmakers, pharmacy benefit managers and commercial health plans have denounced the initiative, saying it will damage market competition and raise drug prices.
Advocates say the new rule will help patients in private health plans, including employer-based plans, and their physicians choose less expensive medications. It may even enable health plans to buy drugs more cheaply for their members. Three in 10 Americans say they have opted not to use a prescribed drug as directed because of the high cost, according to a KFF survey last year. (KHN is an editorially independent program of KFF.)
Under the new federal rule, starting in 2024 an insurance plan member can request and receive estimates of out-of-pocket costs for prescription drugs, both online and on paper, taking into account the member's deductible, coinsurance and copays. Insurers say most plans already offer such cost-estimator tools.
Helping patients find drugs that cost them less could boost their compliance in taking needed medicines, thus improving their health.
"You can call your insurer now and ask what your copay is," said Wendy Netter Epstein, a health law and policy professor at DePaul University in Chicago. "Patients often don't do that. Whether or not this has an impact depends on whether patients take the initiative to obtain this information."