HealthCare Roundtable e-News – February 4, 2019

Democrats and GOP Members Respond to Trump Administration’s Proposal to Eliminate Drug Rebates

Last week, the Trump administration announced its long-awaited proposal to eliminate certain rebates drug makers pay insurance companies in Medicare. The administration’s proposal claims the action will lower drug prescription costs and that rebates would only be permitted if they were passed through directly to patients. With the new proposal, however, there is some ambiguity on the notion of rebates given to patients at the pharmacy counter in the context of the current rebate system. House Speaker Nancy Pelosi (D-Calif.) and other Democrats have criticized the plan, citing that the proposal itself does not do enough to force drug manufacturers to lower their list prices. “Experience tells us that merely trusting Big Pharma to lower its drug prices for consumers is not a solution, it’s a prescription for more of the same. Under the Trump Administration’s proposal, Big Pharma could see even bigger profits and even less restraint on what they charge seniors,” said Pelosi in a statement. (InsideHealthPolicy). Senate Finance Committee members also responded to the proposal; ranking Democrat Ron Wyden (Ore.) suggested Medicare should have more direct power to lower drug prices than the administration’s proposal provides, and that the decision should “fully account for the removal of rebates rather than pocket the difference as a windfall.” Committee Chairman Chuck Grassley (R-IA) voiced his support for the proposal, which is still being reviewed by his office. (InsideHealthPolicy).

Verma Addresses Hospital Pricing Lists at CMS Conference

Last Tuesday (Jan. 29) at the CMS Quality Conference, CMS Administrator Seema Verma addressed the final inpatient pay rule implementation allowing patients to compare prices between hospitals, a move which Verma calls “a marketing opportunity, not a competitive disadvantage,” for hospitals and a win for patients. (InsideHealthPolicy). The final rule relates to the fiscal year Inpatient Prospective Payment System  and requires hospitals to post standard charges online in a machine-readable format for consumers. Verma said the agency is exploring ways to apply its value-based payment models beyond Medicare and encourage more providers to buy into the programs. Not all organizations have been proponents of the rule, with many, including the American Hospital Association, expressing concerns that posting standard pricing information online could mislead patients by providing them with incomplete information. At the conference, Verma acknowledged that most online pricing lists would not include out-of-pocket costs, but that the lists themselves would be more beneficial to those who are not insured. (InsideHealthPolicy).

Trump to Address Drug Pricing Reform in State of the Union

President Trump will give his second State of the Union address this evening with expected topics ranging from the border wall to trade with China. There is speculation that in addition to these topics, Trump will also likely address his administration’s efforts on drug pricing reduction for prescription medications. Drug pricing reform has been a popular platform for both Republicans and Democrats, which is why many experts are predicting that this will be a popular speech topic. Trump will likely discuss his proposal to end drug rebates, an initiative announced earlier last week that has received support and some criticism on both sides of the isle. Other healthcare- and medical-related topics will likely be mentioned by the President during his address. Some news outlets have reported that the President might also shed some light on his plans to end HIV transmissions by 2030, as reported by Politico.

FDA Releases Draft Guidance to Promote Prescription Drug Competition

Last week, the Food and Drug Administration released a draft guidance for drug manufacturers in an effort to promote competition and patient access. FDA Commissioner Scott Gottlieb said the guidance will help disclose whether approved products are on the market, and will also help the FDA understand why generic companies never marketed a product after receiving agency approval.
The guidance also addresses improvements to the FDA’s “Orange Book,” the agency’s database of generic drug details, and calls for regular maintenance to the database so that manufacturers can see how many versions of one product are on the market. FDA also stated that the guidance will help advance the development of new analytical tools and in vitro tests that may provide additional tools to support the approval of complex generic drugs.
“Addressing the challenges related to complex generics, and promoting more generic competition to these medicines, is a key part of our Drug Competition Action Plan, and the agency’s efforts to promote patient access and more affordable medicines,” the agency stated in its release.