HealthCare Roundtable e-News – December 3, 2019

Clock is Ticking for Drug Pricing Legislation Before Year-End

Year-end is fast approaching, and with only a few weeks remaining before Congress and Senate conclude for the year, there is uncertainty around further developments on drug pricing legislation as well as potential administration actions on drug imports and foreign reference pricing. Critics have suggested that the President has struggled to rally support from the GOP on drug pricing talks, dimming the outlook of a resolution before the end of the year.

If neither the House nor Senate bills get passed this year, there is potential to run into feuds regarding a year-end funding deal. A government funding deal has been viewed as the most likely vehicle for drug pricing legislation, and the current continuing resolution to fund the government expires Dec. 20.

I think it would be the triumph of hope over experience to think that we could get it done before the end of the year, but there’s a lot of interest in doing something on drug pricing,” Sen. John Thune (R-S.D.) told reporters last month.

Wall Street analyst firm Berstein reports that the Senate’s drug pricing bill impact on the drug industry would be “negligible” and only amounting to about 2% of drug sales. The firm has also suggested that the Senate bill and potential International Pricing Index would be “small compared to that of the House Democrats’ bill,” which includes Medicare negotiating authority for the most expensive drugs (InsideHealthPolicy).

Congress Facing Pressure to Address ACA Cadillac Tax Before Year-End

The House continues to receive pressure from key stakeholders to delay or repeal significant Affordable Care Act taxes on health insurance and medical devices. Specifically, stakeholders are pushing for a full repeal of the ACA’s “Cadillac tax” before the end of the year. Those who are pushing for a full repeal of the tax have suggested that there “is no surprise bill bigger than the one being driven by the Cadillac tax.” (InsideHealthPolicy).

Opponents of the Cadillac Tax have argued that both parties would run into issues with their constituents if they failed to take any further action before the end of the year.

“There was an overwhelming vote in the House, there are 63 bipartisan votes in the Senate, staff are ready to get it over with, and lawmakers need to be able to tell constituents that they did something to help lower health care costs,” a source pushing for full repeal told InsideHealthPolicy.

The House had initially delayed the Cadillac tax for the first time back in 2015, pushing its implementation at first to 2018, then 2020 and then further to 2022. Congress voted this past summer to eliminate the tax, but William Sweetnam, legislative and technical director for the Employers Council on Flexible Compensation (ECFC), says the impeachment inquiry into the President will likely impact what happens during negotiations due to increased distrust between the parties.

The Public Sector HealthCare Roundtable has worked closely with allies to support the full repeal of the Cadillac tax.

House and Senate Committees Look to Implement Air Ambulance Provisions in Surprise Billing Fix, Despite Provider Protest

As the year comes to a close, House and Senate committees continue to work on surprise billing legislation despite pushback from providers and lobbyists on air ambulance policy, according to staffers. While the Senate’s surprise billing fix includes provisions addressing air ambulances by requiring insurers to pay air ambulance providers the local median rate for that geographic area, the House’s billing fix does not. Committee staffers have said they are interested in adding in air ambulance policy, but no changes have been added yet. (InsideHealthPolicy).

Last year, the FAA Reauthorization Act of 2018 created an advisory committee to investigate a fix for air ambulance billing. While in its early phases, providers are advising Congress to leave air ambulances out of its surprise billing policy and continue to let the advisory committee determine an appropriate solution. (InsideHealthPolicy).

Other providers are concerned that other potential air ambulance provisions in the fix could negatively disrupt air ambulance operational activity. According to a recent Moody’s Investor Service report, any decrease in private payer rates “without an equivalent increase in government payer rates would threaten the viability of the air ambulance industry.” Seth Myers, CEO of Air Evac, is also encouraging lawmakers to separate an air ambulance fix from the rest of the surprise billing package.

Vermont Unveils Concept Plan to Let Commercial Insurers Import Drugs

Republican Gov. Phil Scott and other state officials announced last week that Vermont is preparing to submit details of its plan to import prescription drugs from Canada. Officials spoke of a concept paper that addresses the plan as a way to save money for the state’s consumers. According to the concept paper, the program “accrues savings through commercial plans, bringing savings to make coverage more affordable to Vermonters rather than through public programs, as Florida proposes.”

“I think it’s important to do what we can and do it in a public way because our small size cuts both ways,” Scott said. “It also allows us to be nimble, and coupled with our proximity to Canada, puts us in a position to be a leader on this policy.”

State officials have estimated that the plan could save $1-$5 million, but was made before officials realized insulin, one of the most common and expensive drugs used by consumers, is not eligible for any importation plan.

Florida state officials had released their own concept plan in August, from which Vermont officials hoped to differentiate their proposal. The formal plan is expected by July 1 in 2020, which will influence an upcoming CMS regulatory proposal that is expected to give direction to states that want to import drugs. (InsideHealthPolicy).

Trump Administration and Democrats Looking to Make a Deal to Ease Drug Protections in USMCA

According to White House sources, the Trump administration is looking into re-evaluating intellectual property protections for drugmakers. Since the summer, Democrats have been encouraging the administration to reduce the amount of time that biologic drugs would be protected from generic imitators in the U.S.-Mexico-Canada Agreement (USMCA), from 12 years down to 10 years, as well as a reduction in U.S. law.

Democrats have been criticized by Republicans and the Trump administration for spending too much time focusing on impeachment instead of bipartisan policy issues, so clearing the way for a vote on the trade pact would address some of these criticisms. On the other side of the agreement, Jesus Seade, Mexico’s senior envoy to North America, has said “there has been some accommodation,” when asked about a shorter time frame for protection of biologic drugs. Any changes made to the agreement would have to be approved by both Mexico City and Ottawa. (InsideHealthPolicy).

Administration officials suggested that it’s possible a deal could be made with Democrats on the agreement by the end of the week, but Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, stated that if a deal “cannot be reached by the end of this week, I do not see how USMCA can be ratified in 2019.” (InsideHealthPolicy).