Premier Inc. Commends the Administration’s Efforts to Curb Excessive Spending on Drugs  Last Updated: May 11, 2018
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Positioned to implement President Trump’s recommendations with existing solutions to reduce pharmaceutical costs and stimulate market competition

CHARLOTTE, N.C. — Premier Inc. (NASDAQ: PINC), a leading healthcare improvement company, applauds many of the actions being taken by the White House to tackle prescription drug affordability – helping reduce the financial burden that often falls on both patients and healthcare providers.

Premier is especially encouraged by the administration’s commitment to increase competition and foster innovation by reducing the ability for certain drug manufacturers to abuse the system through unfair loopholes, continuing the acceleration of approvals by the Food and Drug Administration (FDA) for therapeutics with limited competition and reducing the amount of government regulations.

“Premier is a competition catalyst in healthcare,” said Blair Childs, senior vice president of public affairs at Premier. “We’re very encouraged by the White House’s commitment to stimulate competition. This includes reforming the FDA and fostering competition by accelerating drug approvals and overhauling current processes, like the Risk Evaluation and Mitigation Strategy (REMS), which has been exploited by some pharmaceutical manufacturers that use it as a regulatory loophole to block generic entrants.”

“We also need private market solutions to foster innovation,” Childs added. “For example, emerging strategies like value-based contracts where the supplier accepts financial risk for the performance of their drugs can be derailed because of regulations. Additionally, Medicaid best price requirements can discourage manufacturers from offering significant discounts in their value-based contracts. Regulations should be modernized to encourage more manufacturers to be accountable for the outcomes their products deliver.”

Competition from generic drugs, in particular, saved the U.S. healthcare system $1.46 trillion from 2005 to 2015. According to the FDA, drug prices drop to roughly 52 percent for brand-name drugs when two manufacturers are producing a generic product, and continue to go down as more entrants are approved.

For years, Premier has been leading efforts to curb runaway drug prices using private sector mechanisms to increase competition in the marketplace. Several strategies and solutions Premier has implemented include:

  • Leveraging buying power of hospitals: Premier’s aggregated group purchasing power creates competitive friction in the marketplace. Stimulating competition, Premier’s drug portfolio prices have grown less than half the rate of the industry average inflation rate.
  • Injecting competition into pharmaceutical marketplace: Premier continues to encourage competition and works with suppliers to enter the market where there is limited competition and alleviate gaps in supply. Currently, Premier is working with 21 suppliers to manufacture products that lack a robust number of competitors.
  • Introducing value-based contracts between providers and manufacturers: Manufacturers are developing new ways to demonstrate product return on investment in response to provider demands. There is increasing use of real-world evidence to demonstrate value, as well as use of outcomes measures to quantify results. While value-based contracting is still in the early stages, Premier is convening these unique partnerships between the manufacturers and providers looking to measure and launch these programs.

“We look forward to working with the administration and Congress to advance many of these reforms,” said Childs.

Premier has laid out nine policy recommendations, some of which are current priorities for the administration, designed to stimulate competitive markets for pharmaceuticals. This is a holistic approach to achieving a high-quality, cost-effective pharmaceutical industry, while correcting regulatory loopholes that impede competition and directly lead to unsustainable price increases.

About Premier Inc.

Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company, uniting an alliance of approximately 3,900 U.S. hospitals and health systems and approximately 150,000 other providers and organizations to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services, Premier enables better care and outcomes at a lower cost. Premier, a Malcolm Baldrige National Quality Award recipient, plays a critical role in the rapidly evolving healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Headquartered in Charlotte, N.C., Premier is passionate about transforming American healthcare. Please visit Premier’s news and investor sites on