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President Trump just reminded Montanans why they overwhelmingly voted for him in 2016. He recently proposed a sweeping reform that could dramatically reduce seniors' pharmacy bills. The proposal deserves wholehearted support from U.S. Sen. Jon Tester, who previously cosponsored a bill that's similar to the president's plan.

The reform would affect the roughly 100,000 Montanans enrolled in Medicare Part D, the federal drug benefit for seniors and patients with disabilities. The federal government subsidizes and regulates Part D plans. Private insurers create, administer and sell plans to Medicare beneficiaries.

Montana beneficiaries have 28 plans to choose from. These plans all feature different premiums, patient cost-sharing requirements, and formularies — the lists of approved drugs that doctors may prescribe.

Insurers typically rely on vendors known as pharmacy benefit managers to design their drug plans. PBMs bargain with drug companies for discounts and rebates. Since PBMs control which drugs are included on insurer formularies, they have considerable leverage over the drug-company representatives sitting on the other side of the negotiating table.

Last year, drug companies forked over $150 billion of rebates and discounts to PBMs and insurers.

Sadly, Montanans don't benefit from these rebates. That's because PBMs and insurers rarely pass along discounts to reduce patients' pharmacy spending.

Patient cost-sharing at the pharmacy is based on a drug's full list price — not the price negotiated by PBMs. Consider a person with diabetes whose Part D plan requires her to pay 25 percent of her insulin's cost. If that vial of insulin has a list price of $300, she'll pay $75.

That sounds fair, right? The patient pays a quarter of the drug price, and the insurer picks up the rest of the tab?

That's not how the system works in practice. PBMs often negotiate rebates of upwards of 70 percent of the initial list price. So the negotiated price might be just $100 for the vial, after factoring in PBM discounts. After receiving the $75 payment from the patient, the insurer would only owe $25.

The patient — not the insurer — is the one picking up three-quarters of the true cost of the medication. No wonder the Montana Pharmacy Association calls PBM practices "deceptive and anticompetitive."

The Trump administration's proposal would make it illegal for drug companies to offer rebates to PBMs. Instead, drug makers would be encouraged to make discounts available to beneficiaries at the pharmacy.

Montanans are sure to save big on their prescriptions as a result. If PBMs and insurers passed even two-thirds of their rebates through to patients at the pharmacy, Part D beneficiaries could save nearly $40 billion in the next decade.

This lower out-of-pocket spending would bode especially well for residents battling chronic conditions. Nearly 60 percent of adult Montanans grapple with at least one chronic disease, while a third have two or more. Many of these patients require at least one prescription to live normal, healthy lives.

The new proposal would allow patients to access more affordable drugs, boosting health outcomes. It's estimated that improving access to treatment could prevent the deaths of 3,400 Montanans annually.

For years, Senator Tester has fought to secure funding for rural health care and increase Montanans' access to life-saving medications. Now, he has an opportunity to achieve his biggest bipartisan win yet — by helping the administration carry out its proposal.

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Drew Johnson is a Cameron, Montana, resident who serves as a senior fellow at the National Center for Public Policy Research and is a contributor to Newsmax.


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