HHS issues “Prescription Drug and Health Care Spending” rule to analyze trends and costs
On November 17, 2021, the Department of Health and Human Services (HHS), together with the Department of Labor (DOL) and the Department of the Treasury (collectively, the Departments), as well as the Office of Personnel Management (OPM), released an interim final rule with request for comments (IFC), entitled “Prescription Drug and Health Care Spending.”
This IFC is required under section 204 of Title II (Transparency) of Division BB of the Consolidated Appropriations Act, 2021 (CAA), and implements new requirements for health plans and health insurance issuers in the group and individual markets to submit to the Departments certain information about prescription drug and healthcare spending. The same information will be submitted by Federal Employees Health Benefits (FEHB) Program carriers in coordination with OPM.
The Departments will issue biennial public reports on prescription drug pricing trends and the impact of prescription drug costs on premiums and out-of-pocket costs starting in 2023. These reports are expected to enhance transparency and shed light on how prescription drugs contribute to the growth of healthcare spending and the cost of health coverage.
In recent years, there has been a broad effort to promote greater transparency in healthcare spending as a means to promote competition and bring down overall healthcare costs. The CAA included a number of provisions aimed at supporting these efforts, including the requirement that plans and issuers submit certain information related to prescription drug and other healthcare spending to the Departments. This data submission is required to include, among other things, information on the most frequently dispensed and costliest drugs, as well as prescription drug rebates paid by drug manufacturers to plans, issuers, third-party administrators, and pharmacy benefit managers. The CAA further requires the Departments to publish on the internet biennial public reports on prescription drug reimbursements, prescription drug pricing trends, and the impact of prescription drug costs on premiums and out-of-pocket costs.
This IFC complements several rules issued earlier in 2021 to implement other provisions of the CAA. It requires plans and issuers in the group and individual markets to submit certain information on prescription drug and other healthcare spending to the departments annually, including:
General information regarding the plan or coverage;
- Enrollment and premium information, including average monthly premiums paid by employees versus employers;
- Total healthcare spending, broken down by type of cost (hospital care; primary care; specialty care; prescription drugs; and other medical costs, including wellness services), including prescription drug spending by enrollees versus employers and issuers;
- The 50 most frequently dispensed brand prescription drugs;
- The 50 costliest prescription drugs by total annual spending;
- The 50 prescription drugs with the greatest increase in plan or coverage expenditures from the previous year;
- Prescription drug rebates, fees, and other remuneration paid by drug manufacturers to the plan or issuer in each therapeutic class of drugs, as well as for each of the 25 drugs that yielded the highest amount of rebates; and
- The impact of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs.
