Biden-Harris Administration Improves Transparency and Oversight of Prescription Drug and Medical Costs

PrescriptionImage by Charles Thompson

WASHINGTON, D.C. — The Biden-Harris Administration took additional steps this past week to lower health care costs by requiring health insurance issuers, employer-based health plans, and other group health plans to report on prescription drug and health coverage costs.

The requirement—implemented through an interim final rule with request for comments issued by the Departments of Health and Human Services (HHS), Labor, the Treasury (collectively, the Departments), and the Office of Personnel Management—represents the latest in a series of actions that deliver on President Joe Biden’s commitment to protect millions of consumers long plagued by high health care costs. The rule is the fourth rule in a series that the Departments are issuing to implement the No Surprises Act and transparency requirements of the Consolidated Appropriations Act (CAA), 2021.

“Life-saving prescription drugs should not cost anyone their life savings,” said HHS Secretary Xavier Becerra. “…the Biden-Harris Administration is taking additional steps to make health care more accessible and affordable for patients. By collecting key data on the costs of prescription drugs, we are promoting competition and transparency in the health care industry as we continue to curb the rising costs of drugs and surprise medical bills.”

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“With [this] rule, we’re taking more steps to make sure that the care people receive is affordable,” said CMS Administrator Chiquita Brooks-LaSure. “Expanding on our earlier efforts to implement the No Surprises Act, we will monitor pricing and premium trends to better identify barriers to the low-cost, comprehensive, and person-centered care we all deserve.”

The action requires health plans, health insurance issuers offering group or individual health insurance coverage, and health benefits plans offered to federal employees to submit key data to the Departments, which will work through the HHS Assistant Secretary for Planning and Evaluation (ASPE) to publish a report on prescription drug pricing trends and rebates, as well as their impact on premiums and consumers’ out-of-pocket costs. The data submission requirements include information on average monthly premiums and drug spending for patients, compared to their employers and/or group health plans/health insurance issuers.

Since prescription drugs account for a significant portion of health care spending for consumers, plans, issuers, and the government alike, the interim final rule also implements unique requirements to identify specific cost drivers. Plans and issuers must now provide the Departments with an annual overview of their top 50 drugs across key areas of concern, including:

  • the most frequently dispensed brand prescription drugs,
  • the costliest prescription drugs, and
  • the prescription drugs that had the greatest increase in total annual plan spending over the previous year.
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Additional information on prescription drug rebates, fees, and other remunerations paid by drug manufacturers to plans, issuers, and pharmacy benefit managers—including the top 25 drugs generating the highest rebate amounts—will help the Departments understand and report on prescription drug costs, and how they fluctuate over time.

Details on data submission requirements—including how data will be collected and analyzed—can be found in CMS’ fact sheet. The new data submission requirements will apply starting with data from the 2020 calendar year. However, the Departments are deferring enforcement of the new requirements until December 27, 2022, to give regulated entities time to come into compliance. This means the required information for 2020 and 2021 is due by December 27, 2022, although it may be submitted sooner. The Departments anticipate releasing their first report in June 2023 and biennially thereafter.

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The interim final rule with request for comments, “Prescription Drug and Health Care Spending,” implements Title II (Transparency) of Division BB of the CAA, and builds on earlier progress with implementing Title I (the “No Surprises Act”) of Division BB of the CAA. This includes two earlier interim final rules (published on July 13, 2021 and October 7, 2021, respectively) and a notice of proposed rulemaking (published on September 16, 2021). To view the interim final rule in its entirety, please visit the Federal Register.

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