EP216: Getting Rid of Drug Rebates, With Chris Sloan From Avalere Health

Relentless Health Value™

Chris Sloan is an associate principal at Avalere Health, a Washington, DC–based nonpartisan consulting firm. He advises a number of clients—including pharmaceutical manufacturers, health plans, providers, and patient groups—on key policy issues facing the health care industry. His particular areas of expertise include drug pricing, the Affordable Care Act, generics, and biosimilars. Additionally, Chris is a recognized expert in the health care policy issues facing people living with HIV/AIDS and multiple sclerosis. Chris’s economic analyses of key policy proposals and issues, including drug pricing and the repeal and replace efforts around the Affordable Care Act, have been featured in a wide range of publications such as the Wall Street Journal, the New York Times, Politico, Vox, and others. He has a BBA degree in economics and marketing from the College of William and Mary.

01:12 The HHS proposal. 02:29 “Rebates are a really big part of Medicaid Part D.” 02:45 What the “follow the dollar” looks like in this scenario. 04:10 How rebates between PBMs and manufacturers work, and how list prices play into this. 05:26 How this system can hurt the patient, and how this new proposal works to change that. 06:37 Pricing a product as a PBM. 08:04 The total dollar value of PBM rebates. 11:24 Do we know how much PBMs are making in incentives? 14:08 Are PBMs helping or hurting the process? 17:13 Why pharmaceutical managers may be more compelled to raise their prices thanks to large PBMs. 18:10 Perverse incentives in the system. 18:55 “At the end of the day, PBMs are still going to be employed by health plans.” 20:29 How a new model is combating the perverse incentive that raises prices for patients. 23:45 The trade-off involving premium prices in this new proposal. 26:13 “We’re not talking astoundingly large amounts of money.” 26:46 Why PBMs and health plans are against this proposal. 27:37 Why Pharma is for this. 29:11 The perverse incentives for health plans. 31:00 The benefit of Part D. 31:46 The advantage of huge rebates.