HealthCare Roundtable e-News – February 19, 2019

  • Democrats Use Opportunity to Challenge Trump on ACA in House Hearing
  • California Governor Seeks to Lower Drug Prices State-Wide
  • Democrats Question HHS Proposal to Eliminate Drug Rebates
  • Ways & Means Hearing Reveals Gaps on Medicare Rx Price Negotiation
  • Democrats Use Opportunity to Challenge Trump on ACA in House Hearing

    House Energy & Commerce Health Subcommittee Democrats spent the past two years criticizing the Trump Administration health care policies without being able to conduct oversight. Now that they control the House, Democrats have begun to question GOP decisions by the Administration to reform the law and put forward proposals to reverse key decisions, even if their legislation will likely stall in the Republican Senate. (InsideHealthPolicy). 

    On Wednesday, Feb. 13th, the Health Subcommittee held a hearing exploring four proposals from Democrats to address Trump Administration changes to the ACA, including restoring ACA marketing funding and revoking the administration’s expansion of short-term health plans. Republicans pushed back citing failures of the ACA and arguing that Democrats proposals would restrict access to coverage and even lead to single-payer health care.  

    One witness, Georgetown University Research Professor Katie Keith, told the panel that while short-term plans do offer a low-cost alternative to the ACA, they “only tend to work for people who are healthy,” and they otherwise undermine the ACA’s single risk pool. She said that aggressive marketing of short-term plans can confuse consumers about the type of coverage they’re buying. She noted that short-term plans can also do post-claims underwriting and deny payment if they determine a charge was due to a preexisting condition. (InsideHealthPolicy). 

    In a rare moment of bipartisanship, Chairwoman Eshoo’s proposal to increase disclosure requirements for short-term plans garnered some interest from committee Republicans and the GOP’s panelist, the Galen Institute Grace-Marie Turner. 

    “Absolutely. I think consumers very much need to be informed about their policies,” Turner told Eshoo when asked whether she would support extra disclosures on short-term plans. (InsideHealthPolicy). 

    Eshoo ended the hearing without providing information on next steps for the bills, but a Democratic staffer says the full committee hopes to move them forward.

    California Governor Seeks to Lower Drug Prices State-Wide

    California Governor Gavin Newsom signed an executive order last month directing California’s Medicaid system to negotiate prescription drug prices for all 13 million recipients in the state. The transition is expected to be completed by January 2021, with the help of the Department of Health Care Services overseeing the process. 

    While President Trump made it clear in his State of the Union address that drug pricing reform is a priority for the federal government, there are many challenges that have kept lawmakers from making much progress on the topic. Such challenges include secretive drug pricing and the political influence of the pharmaceutical industry, according to Rachel Sachs, an associate professor at Washington University in St. Louis. 

    “I recognize deeply the anxiety so many of you feel around the issues related to the cost of prescription drugs,” Newsom said during his announcement. “And I hope California’s efforts here can lead the way to other states to consider the same.” 

    The new governor is hoping to pave a path for other states to follow suit. According to Trish Riley, the executive director of the National Academy for State Health Policy, there are “real opportunities and real interest in the states about leveraging their buying power.”

    Democrats Question HHS Proposal to Eliminate Drug Rebates

    Senate Finance Committee Democrats met with HHS Secretary Alex Azar last Wednesday (Feb. 13) over the administration’s proposal to make drastic changes to the prescription drug market by eliminating drug rebates. The proposal would enable savings to be passed directly to Medicare Part D beneficiaries instead, a change that many Democrats are arguing would not guarantee that drug companies will convert the rebates they’ve been paying to up-front discounts that are given to seniors at the pharmacy counter. (InsideHealthPolicy).

    Ranking Member of the Senate Finance Committee Ron Wyden (D-Ore.) also reintroduced three bills last week known as the SPIKE Act, the C-THRU Act, and the RxCAP Act, which the Senator claims will help bring transparency to the “broken drug pricing system” and bolster consumer protections for senior citizens. 

    “Drug companies and their middlemen operate in the dark as they extract profits from taxpayers and working families that are struggling to afford medicine,” Wyden said. “These bills represent the bare minimum of what’s required to pull back the curtain, put drug pricing on a sustainable course, and provide relief to seniors getting crushed by high costs. I am eager to move forward in the coming months on these and other reforms that fix the broken drug pricing system.” 

    Wyden asked Azar to work with Congress on his RxCAP bill to cap out-of-pocket costs for seniors in Part D, to which Azar responding by confirming he wants to lower drug list prices before moving on to formalizing cap policies.

    Ways & Means Hearing Reveals Gaps on Medicare Rx Price Negotiation

    On Tuesday, Feb. 12, the House Ways & Means Committee hearing on drug pricing showed fissures between members on their approach to Medicare negotiating directly with pharmaceutical manufacturers. The hearing revealed differences between Democrats in particular, as Subcommittee on Health Chairman Lloyd Doggett pressed for his own proposal. Republicans remain opposed to Medicare negotiation. 

    “This is a pervasive problem that is not limited to one disease or one type of drug or one manufacturer. It applies industry-wide,” Doggett said, speaking to broader issues with the cost of drugs. Doggett’s bill would let the government break patents and exclusivities when drug makers don’t agree to sufficiently low prices. Republicans say Medicare price negotiation would lead to the government excluding drugs from a government formulary. (InsideHealthPolicy) 

    Ranking Republican Rep. Kevin Brady (TX) said he is steadfastly against Medicare price negotiation that would allow the government to exclude drugs from a national formulary, and he pointed to Congressional Budget Office estimates that said a formulary would be needed in order for Medicare negotiation to reduce prices.”My worry is that the Congressional Budget Office has studied the issue and concluded that there would be a negligible effect on prices and spending unless the government created one government-controlled formulary.