Lower Drug and Device Costs

Hospitals and health systems are working to make prescription drugs more affordable by carefully managing formularies, using biosimilars and generics where appropriate, and leveraging programs like the 340B Drug Pricing Program to stretch scarce resources for vulnerable patients. They are partnering with clinicians and pharmacists to prevent medication waste and support safe, appropriate prescribing. Notably, it was hospitals and health systems that came together to create CivicaRx to create a more sustainable and affordable supply chain for critical medicines.

Actions to reduce drug and device costs include:

• Increase access to more cost-efficient generic drugs. Facilitate the production of more generic options by aggressively preventing patent manipulation and other tactics brand manufacturers use to delay generic competition.
• Mitigate patient-driven demand for specific high-cost therapies. Curtail direct-to-consumer advertising of drugs by encouraging the Food and Drug Administration to use its existing review authority, as well as expand its review to other platforms (i.e., telehealth), and by removing manufacturers’ tax deductions for advertising expenses.
• Incentivize patients to use more cost-effective drugs. Vary patient cost-sharing for certain drugs based on value to incentivize patients and their providers to select the most clinically and cost-effective drug regimen available (“high value” drug).
• Pay for value. Adopt value-based reimbursement policies for drug therapies, such as varying reimbursement based on drug performance, as well as the comparative value of the drug for a particular use. In addition, require manufacturers to pay rebates when their drugs do not work as advertised.