Episode 14: Clear Costs, Clearer Choices: Unpacking Trump’s Transparency Drive in Healthcare
- Whitney Vadeboncoeur
- Mar 4
- 10 min read
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Join Michael Navin in this insightful brief episode of the "Ask The Expert" series on The Only Healthcare Podcast. In this episode, Michael dives into President Trump's recent executive order to enforce drug price transparency across the United States. Issued on February 25, 2025, this mandate directs federal agencies to ensure that hospitals and insurers disclose actual healthcare costs, building on a 2019 initiative.
Episode Highlights:
Understanding the Executive Order: A detailed explanation of the new directive and its expectations from healthcare providers and insurers.
Impact on PBMs and Carriers: Explore how Prescription Benefit Managers and health insurers must adjust to new regulations that demand greater transparency and how this could reshape their operations and pricing strategies.
Potential Changes for Consumers: Discuss how this shift towards transparency could empower patients, enabling more informed decisions and potentially lower costs.
Industry Reactions: Insight into how different stakeholders within the healthcare system might respond to these changes, including potential challenges and benefits.
Future of Healthcare Costs: Considerations on how this policy could influence the broader healthcare pricing and access landscape in America.
Tune in to understand how this pivotal policy could affect you, whether you're a healthcare professional, industry stakeholder, or a concerned citizen. This episode is a must-listen for anyone interested in the intersection of policy and patient care.
For feedback or to suggest topics for future episodes, reach out to us at onlyhealthcarepodcast@gmail.com.
About the Hosts:
Michael Navin brings 27+ years of experience in the pharmaceutical industry, specializing in commercialization. As the owner of a successful agency, he has launched numerous pharmaceutical products, making advanced treatments accessible to the public.
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Hosted by: Michael Navin & Randy Vogenberg, PhD
This Podcast is sponsored by:
Peek: Peek is reimagining access through innovation, technology, connectivity, and partnership. Peek offers a comprehensive and unique suite of solutions to help clients improve access and affordability for prescription drugs.
The Peek Meds Marketplace is one of Peek’s differentiated offerings that gives employers a revolutionary new approach to controlling runaway prescription costs for their employees by providing unprecedented transparency, simplicity - and cost savings. The Peek Meds Marketplace aggregates cash discount cards, manufacturer copay offset programs, and an employee’s insurance information to provide a holistic and personalized view of prescription price options. This easy-to-use platform offers a one-stop-shopping experience for prescription drugs.
Peek’s team has decades of experience in the pharmaceutical industry and offers various services to biopharma manufacturers, brokers, benefits consultants, third-party administrators and employers. Visit peekmeds.com to learn more.
Institute for Integrated Health (IIH): Health care benefits, insurance coverage regulations, and doing business in the healthcare industry can be complicated. At IIH, Dr. Randy Vogenberg and his team understand these unique challenges and provides strategic guidance customized to every client. To help overcome your unique challenges, IIH delivers education, planning and advisory on market trends, and U.S. health care market intelligence. The firm’s decades of proven success are due to strategic collaboration with associates from the business, clinical, and scientific communities. https://iih-online.com/.
Music by:Hanu Dixit, https://www.youtube.com/hanudixit
Episode 14 Transcript: (0:00) Thank you for joining me on the Ask the Expert series (0:03) of The Only Healthcare Podcast. (0:05) This is specifically designed for you (0:07) to talk about the topics of the day, (0:09) critically important news, (0:10) and to inform you on things that are taking place (0:12) and how we can help. (0:14) I'm Michael Navin, the co-host (0:15) of The Only Healthcare Podcast, (0:18) and today I'm gonna talk about the recent signing (0:20) of the executive orders for President Donald Trump (0:23) aimed at enhancing drug price transparency (0:26) in the United States.(0:28) President Donald Trump has recently signed (0:30) an executive order aimed at enhancing (0:32) drug price transparency in the United States. (0:35) On February 25th, 2025, he issued an order directly (0:39) to the federal agencies to enforce and expand (0:42) upon a 2019 mandate that requires hospitals and insurers (0:46) to disclose actual healthcare costs. (0:50) The Department of Treasury, Labor, (0:51) and Health and Human Services have been given 90 days (0:54) to develop a framework ensuring clear, (0:57) standardized price information (0:59) and robust enforcement policies.(1:01) This initiative seeks to empower patients (1:03) with accurate pricing details, (1:06) enabling them to make informed healthcare decisions. (1:09) Today, we're gonna talk about the impact (1:10) of this specific executive order on PBMs, (1:15) which are the Prescription Benefit Managers, (1:18) and carriers, which are the health insurance entities, (1:21) as well as the manufacturers. (1:23) These are all significant players in space, (1:26) and in the drug transparency and reimbursement ecosystem, (1:29) we wanna make sure we're qualifying (1:31) and providing information and what this really means (1:34) for all of these entities.(1:37) What does price transparency mean? (1:39) So there's four key things. (1:41) One is greater scrutiny on rebates and fees. (1:44) PBMs negotiate drug prices with manufacturers (1:47) and receive rebates.(1:49) But these discounts are often not passed directly (1:52) through to the consumer or the end paying customer, (1:55) such as the self-funded employer. (1:58) Increased price transparency could force the PBMs (2:01) to disclose rebate amounts and how much savings (2:04) are actually being shared with patients. (2:07) Secondly, a potential loss of revenue.(2:10) If transparency rules expose how PBMs profit (2:13) from spread pricing, which is what they charge insurers (2:16) more than they're actually reimbursing the pharmacy, (2:19) they may face pricing reforms or regulatory actions (2:23) that limit these margins. (2:25) The third is a shift towards (2:26) a direct pricing pass-through model. (2:29) So with the heightened scrutiny (2:30) over how they continuously do spread pricing with insurers, (2:34) the employers who are paying for these services (2:37) are gonna demand more pass-through pricing models (2:40) where PBMs only charge administrative fees (2:42) instead of making money from spread pricing and rebates.(2:46) And lastly, the regulatory pressures on formularies. (2:49) Some of you may or may not know, (2:51) but a formulary is the mechanism in which they use (2:54) to prefer certain drugs over others. (2:58) Transparency in price negotiations could impact this (3:01) by leading to less preferential placement of drugs (3:04) on formularies, which is the drugs that are covered (3:06) by the insurance company.(3:08) And the PBM may require the patient and the insurer (3:12) to justify formulary decisions (3:15) based on net pricing rather than maximizing rebates. (3:19) So now I'm gonna move on to the carriers, (3:21) which are the health insurance entities, (3:23) the health insurance companies. (3:25) So there's four key things here from our perspective.(3:29) One, more public pressure on drug pricing strategies. (3:32) The insurers will need to disclose negotiated drug prices (3:35) and patient cost-sharing information, (3:38) making it harder to justify complex pricing structures (3:41) that obscure the actual costs. (3:43) So this is how they charge premiums for the insurance.(3:48) Tighter oversight of coverage decisions. (3:50) So if a drug price transparency reveals (3:52) that insurers aren't passing enough cost savings (3:55) to the policyholders, the regulators or lawmakers (3:58) may push for lower out-of-pocket patient costs in this case, (4:02) which would impact the profitability (4:03) of the insurance company. (4:05) Increased competition among insurance companies.(4:08) So if patients can easily compare the drug pricing (4:11) across different plans, (4:13) insurers may need to improve their transparency (4:15) and pricing strategies to remain competitive, (4:18) but this gives the patient the ability to shop (4:21) for their insurance as well. (4:23) And lastly, there is a potential cost shift to the patient. (4:28) So if the rebates and discounts (4:29) that are currently being implemented in the system (4:32) to offset premiums are eliminated or redirected, (4:35) there is a risk that insurers may shift costs (4:38) to higher premium or other fees.(4:39) Given the overview of the PBM and the carrier, (4:43) what is the overall impact of those groups? (4:46) Number one, the PBM business model is at risk. (4:49) It relies on opaque pricing and rebates, (4:52) and they may have to adopt a clearer pricing structure. (4:55) From our perspective at Only Healthcare Podcast, (4:58) we think this is a great thing for the patients (5:01) and for manufacturers, (5:02) because now it levels the playing field (5:04) and gives them direct price negotiation (5:07) and clear, transparent pricing (5:10) and what things are gonna cost.(5:12) Secondly, the insurers have to justify their pricing models. (5:16) By providing better access to pricing information, (5:19) this leads to really large industry-wide changes (5:23) in how drugs are being reimbursed. (5:25) So again, empowering the patient (5:28) to be able to have the access (5:29) and make those decisions with their provider (5:31) on what drug is best for them, (5:33) given the pricing as well as the clinical value (5:35) of that product.(5:36) The last impact on the insurers and the PBMs (5:40) is that drug pricing reforms can accelerate. (5:43) So as public awareness of pricing grows, (5:46) there could be an increased pressure on policymakers (5:48) to further regulate PBMs and insurance companies. (5:52) What does it mean for manufacturers? (5:54) So number one, (5:56) it's going to create increased pricing pressures.(5:59) So by requiring the manufacturer to disclose drug prices (6:02) in certain things like their DTC advertising, (6:06) this could create more scrutiny (6:07) from the consumer and regulator. (6:09) If you've seen any ads currently, (6:11) they typically talk about pay as low as $0, (6:15) ask your pharmacist, go to our website. (6:18) But what's missing from that call to action (6:20) is what is the actual price of the drug? (6:23) And if the executive order passes, (6:26) when drug companies advertise a medicine, (6:28) they're gonna have to disclose the cost of that drug.(6:30) Second part of that is transparency (6:32) could lead to price reductions (6:34) as companies compete more openly. (6:36) But the good news here for the patient (6:39) as well as the manufacturer (6:40) is that it just creates a clear pricing model. (6:43) It doesn't mean they have to be discounting it (6:46) down to minimal, right? (6:47) They can still receive the net pricing they're receiving.(6:51) It just eliminates having to pay a PBM (6:54) all those rebate dollars and fees (6:56) to cover that particular drug. (6:58) And patient gets direct access to that drug. (7:01) And the public backlash against high drug prices (7:03) could push the manufacturer (7:04) to just lower the drug altogether.(7:07) We've seen some of these models start to happen. (7:10) So Eli Lilly is one of the leaders in direct programs (7:13) and they have their direct programs (7:15) with some of their GLP-1 products. (7:17) So we're seeing that happen already.(7:19) The second part, which we think is the critically (7:22) and almost most important part (7:23) is the impact on negotiating with PBMs and insurers. (7:26) If you're not aware, (7:28) drug manufacturers bring drugs to market. (7:30) And the first thing they do to do that (7:33) is negotiate the pricing with PBMs and insurers (7:36) via the form of a rebate.(7:39) This game has sort of gotten out of control (7:41) over the last eight to 10 years (7:43) where the rebates are so high in order to cover a drug, (7:46) it's becoming unaffordable (7:47) to even bring a drug to market in certain cases. (7:50) So we believe that if there's less negotiation on rebates (7:55) and that the drug manufacturer can sell a drug for a price (7:59) and actually paid that price, (8:00) not only they win, but the self-funded insurer wins (8:03) because they're assuring them (8:04) that they're gonna get the direct price (8:06) from the manufacturer and no rebate games. (8:09) So transparency will disrupt these negotiations.(8:12) It'll limit the manufacturer's ability to offer a rebate, (8:15) but we also think it will open up the opportunity (8:18) to go direct to the self-funded employers. (8:21) And then from a strategy perspective, (8:23) what is this gonna mean from manufacturers? (8:26) Number one, (8:28) because you have to advertise the pricing for the drug (8:31) when you're doing DTC, as I said, (8:34) this could really deter consumers (8:36) from taking high cost medicines that they can't afford. (8:39) And then the companies may have to shift (8:41) their promoting the affordability programs (8:43) to alternative pricing models.(8:46) But from our perspective here, again, (8:48) it creates the ability for them (8:50) to reinvent their strategies when it comes to go to market. (8:53) In a good way. (8:55) So this allows them to consider different approaches (8:58) instead of just calling on the PBMs (9:00) and the carriers to cover their drug on formulary, (9:03) they could be talking to the self-funded employers.(9:07) They could have a mechanism (9:08) in which they could have those discussions (9:09) and actually transact with the self-funded employer (9:12) to make sure that that employer is getting the best cost (9:15) and the patient is getting access to the medicine. (9:19) So I'm just gonna conclude (9:20) that we've seen this coming for the last three years (9:23) and we are uniquely qualified to really help here. (9:26) This is something we saw a long time ago.(9:29) And what I wanna throw out there (9:31) is that this is an invitation to have an open dialogue (9:33) so that we can make price transparency happen with ease (9:36) and with really strong strategies moving forward. (9:40) So I'm gonna challenge all of you to engage with us (9:42) and to explore how to address this (9:44) and what other things that can be done along the way. (9:48) We also have a sponsor called Peak Meds, (9:51) Peak Healthcare Technologies, (9:52) who's a transparency pricing platform for drug prices.(9:56) It's the only platform that exists (9:58) that compares multitude of cash programs that exist (10:01) and members insurance. (10:03) So what's nice about this platform with Peak (10:05) is that it meets all of the transparency needs upfront, (10:08) gives patients something very easy to use (10:11) and allows them to save money (10:12) and be able to compare drug pricing. (10:14) Again, I'm gonna challenge all of you to engage with us (10:17) and see if we can help you.(10:19) So thank you for your time this morning. (10:20) Thank you for listening into this really (10:22) critically important topic (10:24) and change in the healthcare continuum. (10:27) And please keep in mind to always refer (10:29) to the Only Healthcare podcast.(10:31) We love what we're doing (10:32) and we look forward to working with you in the future.
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