HealthCare Roundtable e-News – July 22, 2020

Special Alert: President Trump Preparing Executive Orders Aimed at Drug Costs

Several reports over the weekend and early this week have confirmed that the President is likely to issue several executive orders this week to address drug costs in order to counter stalled congressional efforts to achieve comprehensive drug pricing reform.   

While details are not clear, we are hearing that a version of the 2019 proposal to eliminate rebates in Medicare Part D may be included, among other proposals. The 2019 withdrawn PBM drug rebate proposal would have eliminated the safe harbor or exception to criminal antikickback laws that allows PBMs to negotiate rebates or discounts from manufacturers for Medicare and Medicaid insurers for individual drugs.   

The Roundtable was very active last year in opposing this policy and is prepared to do so again alongside allied stakeholders should the President move forward with the policy. Notably, if an EO is signed, this will require the issuing of regulations that would not occur before the November election.

The Roundtable is monitoring this situation very closely and is prepared to take action on any policies the President puts forward later this week. Please do not hesitate to contact Roundtable Senior Policy Advisor, Andrew MacPherson ( with questions or comments.

AHIP Report Highlights Telehealth Growth Trends

Last week, America’s Health Insurance Plans (AHIP) released a brief detailing the increasing use of telehealth services during the pandemic and provided recommendations for ensuring best practices are in place one the crisis has ended. The group says that if the changes made to virtual care in recent months go away, telehealth would be inhibited from becoming a sustained and transformational approach to patient care.

In its brief, AHIP cites data from Fair Health that found a 4,337% year over year increase in private insurance telehealth claims. AHIP further highlights a recent report from Frost & Sullivan that projects a seven-fold increase in telehealth by 2025 and a recent McKinsey report that says telehealth could be a $250 billion industry.

AHIP and other insurer groups have asked lawmakers to let telehealth visits be counted toward network adequacy requirements, risk adjustment calculations and quality measurement in order to solidify telehealth as a legitimate service comparable to in-person care. AHIP has claimed that geography restrictions and state licensure requirements have limited the ability of telehealth to grow organically, and that these barriers must be lifted in order to continue seeing the positive growth trends for patients and the industry. (InsideHealthPolicy)

Supreme Court to Review Arkansas PBM Appeals Case

The Supreme Court announced that it will review a decision made in 2018 by the 8th Circuit Court of Appeals, which held that the federal Employee Retirement Income Security Act (ERISA) restricts states’ abilities to regulate how pharmacy benefit managers (PBMs) set drug prices paid by pharmacies and consumers. The Supreme Court’s ruling on the case primarily impacts the state of Arkansas, but could have implications in 40 other US states with laws restricting PBM conduct.

The 8th Circuit Court of Appeals had ruled in Rutledge v. Pharmaceutical Care Management that the federal Employee Retirement Income Security Act preempted the law, to which Arkansas asked the Supreme Court to review the ruling. The Trump administration and 30 other states supported Arkansas’ appeal, in which the court will determine whether the federal employee-benefits law supersedes state laws that dictate how much PBMs pay pharmacies. (InsideHealthPolicy)

The lawsuit follows complaints of PBMs’ practice of spread pricing, by which they have been reimbursing pharmacies for dispensing drugs below their cost to acquire the drug. The Arkansas law that is the subject of the appeal does not target spread pricing, but some states across the country ban the practice. The results of this case will determine whether the federal employee-benefits law supersedes state laws that dictate how much PBMs pay pharmacies. (InsideHealthPolicy)

House Appropriations Committee Pushes for Aggressive Seasonal Flu Vaccination Campaign

As health experts warn of a potentially disastrous flu season this winter that would collide with coronavirus cases, the House Appropriations Committee is pushing for the CDC to increase domestic production of the influenza vaccine and other drugs.

In a recent report that coincided with an HHS spending bill, the committee stated that they “included $4,000,000,000 for an enhanced influenza vaccination campaign, including the purchase of vaccine as necessary to increase coverage to reduce the double wave of virus infections, and to enhance the domestic vaccination infrastructure for scaled-up operations in fiscal year 2021, including preparedness, operations, distribution, and a comprehensive campaign to achieve coverage goals.” (InsideHealthPolicy)

Health experts say that since it’s hard to predict how long it could take to get a coronavirus vaccination into circulation in the US, the government would do well to keep the seasonal flu from spreading violently while coronavirus cases continue to swell. The committee has vouched for higher flu vaccine coverage, claiming it would decrease the total number of doctor visits and hospitalizations during the season, increasing capacity in hospitals for patients with COVID-19.

Despite the push for the flu vaccine campaign, the committee has stated that it does not want the seasonal influenza to compete with priorities for fighting the coronavirus crisis. The committee expects the CDC to expand the vaccination infrastructure with state and local governments. The HHS appropriations bill includes $2 billion for expanding state and local public health and emergency response capabilities with Public Health Emergency Preparedness agreements. (InsideHealthPolicy)

Stakeholders Argue Grassley’s Proposal to Make CARES Act Funds More Flexible Won’t Save States

After rejecting House lawmakers’ proposals to give an additional $1 trillion to states and localities in the next COVID-19 relief package, Senate Finance Committee Chair Chuck Grassley (R-Iowa) is proposing instead that lawmakers give states more flexibility to spend the funds they already have. Both the National Governors Association and the National Association of State Budget Officers have suggested similar ideas but warn that the approach would not be enough.

“I am highly skeptical of sending massive amounts of additional funds to states and localities, since future needs are so highly uncertain and there is still unspent money in the pipeline,” said Grassley during a floor speech. “At this point, I believe that it may be useful to entertain more flexibility in what has already been approved.” (InsideHealthPolicy)

States received $150 billion in CARES Act funds, but restrictions to one-time expenses incurred by the pandemic have added to local governments’ frustrations. NASBO Executive Director Shelby Kerns said releasing additional funds would not help, as many states have already committed their CARES Act relief in advance of the Dec. 30 deadline that requires them to return unused funds. (InsideHealthPolicy)

The NGA shared their estimates in a recent letter to lawmakers, citing that states and localities continue to lose an estimated 5% to 20% of their budget revenue and has asked lawmakers for months to give $500 billion for state stabilization. NGA press secretary James Nash said that the current flexibilities in the use of those Coronavirus Relief Fund dollars “are not sufficient for states to maintain health care, education, public safety and other services jeopardized by the sudden economic downturn.”