Health plans

Biden administration demands insurers and health plans to account for prescription drug costs

Photo: Jeff Lagasse / Healthcare Finance News

In an interim final rule, the Biden administration now requires private insurers to report prescription drug costs, along with key data, to the departments of Health and Human Services, Labor and the Treasury.

This is the fourth rule in a series that departments are issuing to implement the No Surprises Act, as well as the transparency requirements of the Consolidated Appropriations Act of 2021, according to the Centers for Medicare and Medicaid Services.

Action requires health insurance plans, health insurance issuers offering group or individual health insurance coverage and health insurance plans offered to federal employees to submit key data to government departments , who will work through the HHS Assistant Secretary for Planning and Evaluation to publish a report on prescription drug price trends and discounts, as well as their impact on premiums and out-of-pocket costs for consumers.

The data submission requirements include information on the average monthly premiums and drug expenses of patients, relative to their employers and / or group health plans and health insurance issuers.


The administration said prescription drugs represent a significant portion of health spending by consumers, plans, issuers, and the federal government. For this reason, the interim final rule also implements requirements to identify specific cost drivers.

Plans and issuers are now required to provide departments with an annual overview of their top 50 drugs in key areas of concern. These include the most frequently distributed brand-name prescription drugs, the most expensive prescription drugs, and the prescription drugs that saw the largest increase in total annual plan spending compared to the previous year. .

CMS said the additional information on prescription drug discounts, fees and other compensation paid by drug manufacturers to drug benefit plans, issuers and managers – including the top 25 drugs generating drug benefit amounts. highest discounts – will help departments understand and report on prescription drug costs and how they fluctuate over time.

The agency has also published a fact sheet with details on the data submission requirements, including how the data will be collected and analyzed. The new requirements will start with data for the calendar year 2020.

However, departments are delaying the application of the new requirements until December 27, 2022, in order to give regulated entities more time to come into compliance. This means that the information required for 2020 and 2021 is expected by December 27, 2022, although it can be submitted earlier. Departments plan to release their first report in June 2023 and every two years thereafter.


Tackling prescription drug costs has long been a priority for Biden’s White House. In September, HHS Secretary Xavier Becerra released a plan to reduce drug prices, in part by allowing the HHS director to negotiate the prices of Medicare Part B and Part D drugs directly with pharmaceutical companies and make these prices available to other buyers.

PhRMA TV commercials said the decision to ask Medicare to negotiate drug prices would deprive consumers of their choice.

Biden’s budget proposal in August called on Congress to enact solutions to lower prescription drug prices and hold brand-name drug makers accountable. He called for Medicare to cap annual drug fees for beneficiaries, as well as support the Food and Drug Administration’s efforts to accelerate the development of generic drugs, which typically have much lower costs for recipients. consumers.

Biden also called on states to work on plans to import drugs from Canada, where costs are also much lower, and proposed penalizing drugmakers who raise prices unbalanced with inflation.

The net cost of prescription drugs – that is, the sticker price minus manufacturer discounts – has grown more than three times faster than the rate of inflation over a decade, according to a report from 2020 JAMA to study.

Twitter: @JELagasse
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