HealthCare Roundtable e-News – January 28, 2020

Trump’s Frustrations on Healthcare Polling Data Leads to Revival of International Drug Pricing Plan

HHS Secretary Alex Azar is working to implement President Trump’s international drug pricing plan ahead of the president’s State of the Union address next month. Disagreements within the administration have stalled work on the president’s plan, and last week, Trump expressed his frustration at Azar after polling data showed that more voters preferred Democrats’ approach to health care.

In 2018, the administration released a blueprint to lower drug costs, which has since been halted due to legal roadblocks. The drug industry has also opposed the plan, saying that patients abroad “face significant restrictions accessing new medicines and other treatments.” Republicans were slow to adopt the plan to create an international drug pricing index as some equated the plan to much-opposed government price setting.

Trump had initially expressed his support for the plan unveiled by House Democrats and Speaker Nancy Pelosi (D-Calif.), which included policy on an international pricing index, but then backed away from the proposal after receiving little Republican support. Experts say it’s too late for Trump’s plan to materialize before the 2020 election.

“PhRMA continues to urge policymakers to abandon international reference pricing schemes… and instead pursue reforms grounded in market competition and patient-centered care,”said Nicole Longo, a spokesperson for the trade group for brand-name drugmakers.

Colorado Legislators’ “State Option” Insurance Plan Leads the Way for States to Tackle Rising Hospital Costs

Anticipation is building over Colorado’s soon-to-be-developed public-option insurance plan, which will aim to tackle increasing hospital costs. Tensions are high, and experts are expecting the policy to have a significant impact on how other states across the country will look to develop their own plans in 2020.

So far, Congress has not passed any new policies to help protect patients from rising hospital costs and surprise bills. This has left a door open for states, such as Colorado and California, to take action and determine their own solutions. Much of the outrage in Colorado over increasing costs was fueled by a 2019 study, which found that hospital costs have increased from 2009 to 2017 by just under 59%. As a result, Colorado Gov. Jared Polis (D) signed a law to begin work on developing a public insurance option plan for the individual insurance market.

In Colorado, the plan would use a formula to determine hospital-by-hospital reimbursement, but the challenge will be facing hospital groups who don’t approve of the approach. The state’s draft for a public option is described by administration leaders as a “state option,” which would not leave out private insurers. Colorado legislators have until May to pass the plan.

“If they can’t get it done, it likely goes poorly for other states to pass anything resembling a public option,”said Billy Wynne, chairman of Wynne Health Group, who has been analyzing the Washington and Colorado public-option programs with a grant from the Arnold Foundation.

Conservative Coalition Looks to Block Passage of Surprise Billing Deal

Several right-wing coalitions announced last week that they would band together to lobby for a surprise billing fix that does not include a benchmark payment rate. The lobbying group, known as the Coalition Against Rate Setting, includes Heritage Action, Freedom Works and the National Taxpayers Union, along with other conservative groups who plan to fight “against government attempts to meddle in the U.S. healthcare system.”

While the House Ways & Means Committee had previously attempted to pursue a surprise billing fix that does not include government rate setting and instead relies on a more provider-friendly mechanism, committee members have expressed their support for the current bill. (InsideHealthPolicy).

“Chairman Alexander is going to continue to keep the bipartisan, bicameral agreement at the top of Congress’ to-do list until it is signed into law, and a few more TV ads are not going to change that,” one of the committee members said when asked whether the new GOP coalition might slow their bill’s progress. (InsideHealthPolicy).

Despite the coalition’s efforts, both committees are still aiming to pass legislation on surprise billing before the end of May this year.

New Data Suggests Medicare Part D Plans Prefer High List-Price Drugs

Newly released data from IQVIA on market share of hepatitis C drugs indicates that Medicare Part D plans favor high list-price drugs when identical low list-price drugs are available. After analyzing the data, Drug Channels CEO Adam Fein suggested that Part D plans and PBMs favor high list-price drugs with big rebates because insurers want to rush beneficiaries into catastrophic coverage, a scenario where taxpayers would pick up most of the bill.

In his analysis, Fein had used new prescriptions of hepatitis C drugs after the FDA had authorized generics for Harvoni and Epclusa, branded drugs with two of the highest list-prices on the market in 2019. By August, after the generics had been on the market for several months, both brand name drugs still accounted for 46% of new prescriptions, compared to 47% in January. Generics accounted for 8% of prescriptions during the same period.

Unlike Medicare Part D, commercial and Medicaid plans favored the generic and lower-priced hepatitis C drugs on the market. Between the two, high list-price prescriptions fell from 51% of new prescriptions in January to 29% by August.