HealthCare Roundtable e-News – January 7, 2020

Happy New Year 2020!

Trump Remains a Wild Card on Drug-Pricing Legislation In 2020

As lawmakers continue to push for drug pricing legislation in the new year — and where prices already appear to be skyrocketing — there is still uncertainty around whether Trump will choose to support the House Democrats’ bill that was passed last month. A deal was expected to be included as part of the government’s year-end funding deal until Senate Finance Chair Chuck Grassley (R-Iowa) and House Speaker Nancy Pelosi (D-Calif.) convinced appropriators to include only five months of Medicare and Medicaid extenders in the year-end spending bill instead. (InsideHealthPolicy)

The President has supported strict drug pricing controls in the past, and some are optimistic that Trump will feel some pressure to get a deal together as elections grow close. House Energy & Commerce Committee Chair Frank Pallone (D-N.J.) noted that, “the president said, when he ran and until relatively recently, that he would support negotiated prices, and I expect at some point he’ll come back to that, and we’re going to keep pushing the Senate to try to achieve that.”

Some have argued that impeachment got in the way of Trump agreeing to a deal with Pelosi, who has been leading the impeachment process. House Democrats passed Pelosi’s bill without GOP support, but it’s certain that if Trump needed a win before elections in November that he’d be able to rally support from members of his party.

Health Insurance Tax Repeal Could Bolster MA Plan Benefits

According to industry advocacy organizations, the recent repeal of the health insurance tax may lead to more benefits for Medicare Advantage plans. President Trump signed the spending package repealing the tax last month after years of lobbyists pushing for its delay or removal. Close to a third of Medicare beneficiaries are enrolled in Medicare Advantage plans and the repeal will go into effect beginning 2021, meaning the IRS will collect $15.2 billion to cover the tax for fiscal 2020.

Allyson Schwartz, President and CEO of Better Medicare Alliance, has noted that the repeal of the tax won’t have much effect on 2020 plans’ benefits and finances since the costs had already been considered when planning benefits. Schwartz said that the plans “may later offer supplemental benefits with the money saved from the repeal or pocket any costs saved.” (InsideHealthPolicy).

Some industry advocates shared their concerns on how the tax would be passed on to beneficiaries if it were not repealed. The AHIP spokesperson says the tax’s repeal helps stabilize the market and protect beneficiaries. (InsideHealthPolicy).

House Democrats and State Officials Request Supreme Court Review of Texas vs. U.S. Appeals Case

Last week, a group of House Democrats and Democratic state officials asked the Supreme Court to take up a federal appeals court case deeming the Affordable Care Act is unconstitutional. The petitions are asking the Court to review the case during the current session to ensure the outcome would be final before the 2020 presidential election.

The appeals court had created uncertainty last month when the court struck down the individual mandate and punted the rest of the case to a lower court to determine which components of Obamacare remain valid. California Attorney General Xavier Becerra, one of the 20 Democratic state officials who intervened to defend the law, noted that it’s unclear whether the Supreme Court would weigh in, and, if so, prior to the 2020 election (InsideHealthPolicy).

“The Supreme Court isn’t normally in the habit of reviewing cases that aren’t yet final,” said University of Michigan health law professor Nicholas Bagley on Twitter. “Interlocutory appeals are generally (though not universally) discouraged.”

President Trump has said that a decision from the appeals court would not change the current system. He claims that Democrats seeking to expand coverage through “radical changes” are the ones who are trying to take away coverage, while the GOP is trying to protect it. (InsideHealthPolicy)

HHS Draft Guidance on Drug Importation Path for Manufacturers Excludes Generics

Under HHS’ drug importation plan issued as a draft guidance last month, generic drug and biosimilar manufacturers who make and sell FDA-approved versions of their products overseas will not be permitted to import them into the United States. Despite the current restrictions, the agency confirmed that they are not opposed to considering a path for importing generics if a separate guidance is needed. (InsideHealthPolicy).

The pathway for manufacturers is intended for branded drugs for which there are “extremely high rebates,” HHS Secretary Alex Azar said during a press call last month. He called out pharmacy benefit manager contracts that he said, “collect these undisclosed rebates while charging patients list price at the pharmacy.” Azar said. “As a result, even if the drug company would like to lower the list price of their drug, they may actually be precluded from doing so because of their arrangements with these middlemen where they have to funnel a certain amount of rebate money to those middlemen.” (InsideHealthPolicy).

Azar confirmed that drug companies have told HHS that if they can get new national drug codes (NDCs) for the exact same drugs, they would offer those drugs at a lower list price. Notably, the draft guidance does not apply to generic drugs, as HHS isn’t aware of similar private market challenges for reducing generic drug costs, said HHS Assistant Secretary for Health Brett Giroir. (InsideHealthPolicy).