Prescription drugs sit on a pharmacist’s counter. Photo by John Moore/Getty Images.

The U.S. Department of Health and Human Services last week issued its plan to address high drug prices as part of President Joe Biden’s push to take on anticompetitive practices across the economy.

But while it addressed in detail abusive practices by drugmakers, it was a lot more superficial about the practices of much-larger corporations that serve as drug middlemen and as some of the country’s largest insurers.

The report, “Comprehensive Plan for Addressing High Drug Prices,” was produced by HHS and forwarded on Thursday to the White House Competition Council pursuant to Biden’s July 9 executive order Promoting Competition in the American Economy.

The council held its first meeting on Friday.

The report notes the harm being done by rapidly inflating prices in the $370 billion drug marketplace, where medicine costs almost twice as much as it does in other countries in the Organization for Economic Cooperation and Development, a 38-member group of mostly developed economies.

“Americans pay too much for prescription drugs,” it says. “We pay the highest prices in the world, which leads to higher spending. Higher spending puts pressure on private and government payers to raise premiums or make benefits less generous. Lack of affordable access to prescription drugs and other health care services leads to worse health outcomes.”

Most of the solutions it offers deal with manufacturer abuses.

For example, it takes on a practice called “pay for delay,” in which a maker of a brand-name drug with exclusive access to the market pays generic competitors to delay bringing their products into the fray, thereby keeping up prices.

The report also proposes methods to promote production of generic and biosimilar drugs and it proposes to bring down costs through direct negotiations between huge programs such as Medicare and the companies that make them.

However, the report is much lighter on proposals about what to do about pharmacy benefit managers — middlemen who handle the transactions. That marketplace is dominated by three corporations that are among the country’s 15 largest and they’re also huge players in insurance and pharmacy.

The rebates the companies, known as PBMs, negotiate with manufacturers have been shown to increase the list prices of brand-name drugs, and the companies are also suspected of playing a big role in keeping prices of generics artificially high.

Critics have said that a lack of transparency in PBM rebate negotiations leads them to believe the companies are profiting handsomely at the expense of everyone else. Read more