NABIP makes recommendations for prescription drug affordability

The National Association of Benefits and Insurance Professionals said it is ready to work with lawmakers to advance reforms that increase prescription drug affordability while strengthening Medicare’s long-term sustainability.

NABIP sent a letter to Senate Finance Committee ranking member Ron Wyden, R-Ore., on Aug. 17 in response to the committee’s request for information on policy options to lower prescription drug prices and improve affordability for patients.

In June, Wyden issued the request for information focusing on three policy objectives:

• Lowering the price manufacturers charge for prescription drugs
• Lowering out-of-pocket costs for patients
• Fostering biopharmaceutical innovation in areas of unmet need, bolstering domestic clinical trials, and recruiting and maintaining scientific talent

Among the factors driving the request are concerns that Americans pay too much for prescription drugs and a desire to build on the Inflation Reduction Act's cost-reduction provisions. Before issuing the request for information, Senate staff conducted listening sessions with more than 70 outside groups, including patient advocates, consumer organizations, academic researchers, health insurers, pharmaceutical manufacturers and think tanks.

NABIP’s letter to the committee mainly focused on Medicare Part D and prescription drug supply-chain issues where the association’s members have the most direct experience.

Preserve Part D premium stability and meaningful choice

NABIP said it agrees that competition and plan availability in the stand-alone prescription drug plan market are essential to preserving traditional Medicare as a viable coverage option.

Stand-alone prescription drug plans operate under different financial conditions than Medicare Advantage prescription drug plans. MA-PDs may use Medicare Advantage rebate dollars to reduce Part D premiums or enhance drug benefits, while stand-alone plans do not have access to the same source of funding.

NABIP said it has repeatedly raised concerns about rising premiums, declining stand-alone plan availability, narrower formularies and instability that can make traditional Medicare less attractive or less practical for some beneficiaries. NABIP recently expressed concern that the Centers for Medicare & Medicaid Services’ decision to discontinue the Part D Premium Stabilization Demonstration could add further uncertainty to the stand-alone market and result in higher costs or fewer choices for some beneficiaries.

“Medicare beneficiaries should not feel compelled to enroll in Medicare Advantage solely because stand-alone drug coverage has become less affordable or less available. Traditional Medicare paired with a stand-alone PDP must remain a meaningful option, not merely a theoretical one,” NABIP’s letter said.

Lower out-of-pocket costs without undermining coverage stability

NABIP said it supports the overall objective of making necessary medications more affordable for Medicare beneficiaries but believes the committee should evaluate affordability across the beneficiary’s entire coverage experience.

“A policy that reduces cost sharing or caps the out-of-pocket costs for a particular drug may not improve overall affordability if it also produces substantially higher premiums, more restrictive formularies, fewer plan choices, or reduced pharmacy access,” the letter said.

Protect formulary and pharmacy access

NABIP called on Congress to consider providing a clear Special Enrollment Period when a significant and materially adverse formulary change, pharmacy-network disruption or repeated inability to access a covered drug substantially changes the coverage on which the beneficiary relied when enrolling.

Hold PBMs accountable for total net effective cost

NABIP supports pharmacy benefit manager reforms that promote transparency, competition, accountability and aligned incentives. The association called for PBMs and plan sponsors to be evaluated using net effective cost, encompassing all economic components of the transaction.

Increase oversight of private-label drugs and vertically integrated entities

Vertical integration can reduce competition, obscure financial relationships and limit plan sponsors’ and advisors’ ability to evaluate alternatives, NABIP said. The association supports greater disclosure of affiliated entities.

NABIP’s recommendations

In its letter, NABIP recommends that the committee:

1. Develop a durable strategy for stand-alone Part D premium stability.
2. Evaluate any proposed out-of-pocket caps across the full Part D benefit, including their effects on premiums, formularies, plan participation, and pharmacy access.
3. Protect beneficiaries from disruptive formulary changes and inappropriate prescription rejections, including stronger Plan Finder information, expedited appeals, and narrowly-defined Special Enrollment Period protections.
4. Measure PBM performance according to total net effective cost rather than rebate volume, with all fees, spreads, markups, and affiliate revenue included.
5. Prohibit contractual practices that prevent plans from accessing their information, evaluating alternatives or pursuing lawful lower-cost arrangements.

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