HealthCare Roundtable e-News – July 24, 2019

Senate Finance Committee Unveils Major Bipartisan Drug-Pricing Legislation

The Senate Finance Committee unveiled a long-awaited drug-pricing bill, to be marked up Thursday (July 25), that includes major changes to drug-pricing policy in Medicare and Medicaid — including restructuring the Part D benefit, imposing controversial inflationary rebates in Medicare Parts B and D, and raising the rebate cap in Medicaid. The White House was quick to endorse the legislation. (InsideHealthPolicy) 

“The cost of many prescription drugs is too high. Without action, we’re on an unsustainable path for taxpayers, seniors and all Americans. We’ve been working on a bipartisan basis for more than six months to craft legislation that begins to address the broken prescription drug supply chain,” Grassley and Wyden said. 

The Congressional Budget Office said that the package would save taxpayers $85 billion in Medicare and $15 billion in Medicaid; and beneficiaries $27 billion in out-of-pocket costs and $5 billion in reduced premiums, according to the Finance Committee.  

The policies would have mixed financial impacts on drug makers–the inflationary rebates would cost them money, the Part D restructuring would help some companies and hurt others, and lifting the Medicaid rebate cap would have a significant negative impact concentrated on a few companies that sell drugs that currently meet the cap, such as insulin. 

Specific highlights include: 

  • Part D. The bill would dramatically restructure the Medicare Part D benefit and includes a controversial inflation cap on drug price hikes. The new structure of Part D eliminates the donut hole and shifts manufacturer liability to the catastrophic phase. 
  • Biologics and Biosimilars. The bill increases payments for biosimilars to encourage their use over brand biologics. The current payment rate — ASP of the biosimilar product plus an add-on payment equal to 6% of the reference biological product’s ASP — is increased to 8% of the reference product ASP for a period of five years. The bill also includes a controversial provision pushed by Wyden that would require brand-drug and biologic makers to pay Medicare back for any list price that increases higher than the Consumer Price Index for All Urban Consumers (CPI-U). 
  • Price Hikes. A transparency provision modeled after the Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act was included that would make drug makers justify price hikes to HHS. 
  • Medicare Part B payments. Grassley and Wyden would force drug, biologic and biosimilars makers to exclude the value of coupons provided to privately insured individuals when they report a drug’s ASP to HHS. 

Republican leaders have said the plan is to combine legislation aimed at lowering health care costs from the Finance Committee, health committee and Judiciary Committee for a floor vote. The House is operating on a parallel track with Speaker Pelosi planning to offer a legislative package in the early Fall. (InsideHealthPolicy)

The Roundtable will continue to monitor and work to advance drug pricing legislation that ensures access to life-saving medications and increases competition in the pharmaceutical marketplace.

House Energy and Commerce Committee Passes PCORI Reauthorization

The House Energy and Commerce Committee passed an amended version of the Community Health Investment, Modernization, and Excellence Act last Wednesday (Jul. 17) to reauthorize the Patient-Centered Outcomes Research Institute (PCORI), a non-government institute that aims to help patients make informed healthcare choices, and extend funding for community health centers and the National Health Service Corps. The Public Sector HealthCare Roundtable supported the provision, which reauthorizes PCORI for three years. Last month, the House Ways and Means committee also agreed to reauthorize PCORI, although for seven years, through 2026, rather than three years as part of an amended version of the Protecting Access to Information for Effective and Necessary Treatment (PATIENT) Act of 2019.

Biden Proposes Alternative to ‘Medicare for All’, New Public Health Insurance Option for Non-Expansion States

Last week, Democratic Presidential candidate Joe Biden announced a new proposal for a public health insurance option as an alternative to Medicare for All, a platform that several over Presidential candidates have backed so far throughout the campaign. (InsideHealthPolicy).

Biden’s proposal would maintain a public-private structure, similar to the ACA’s marketplaces, would come at no cost for people in states that have not expanded Medicaid under the ACA, and would offer stronger financial assistance to make coverage more affordable and accessible. With the proposal, Biden denounced Medicare for All and the Democrats who support the policy, claiming that the candidates’ preferred approach to single-payer healthcare would scrap Obamacare and be counter intuitive to all their efforts to stop its repeal.

“I knew the Republicans would do everything in their power to overturn Obamacare. They still are. But I’m surprised so many Democrats are running on getting rid of it,” Biden said last week. “Starting over just makes no sense to me.”

Other Democratic Presidential candidates pushed back after Biden’s announcement to advocate for Medicare for All and fight those criticisms. Sen. Bernie Sanders (I-Vt.) responded by reminding voters that he fought the repeal of the ACA, but that he would not “be deterred from ending the corporate greed that creates dysfunction in our healthcare system.”

Lower Than Expected Participation in ACO Program Draws Concerns

Last week, CMS announced members of the 2019 Medicare ACO class, which kicked off on July 1, and congratulated each of the ACOs for their commitment to value-based care. But the National Association of ACOs is worried about participation numbers in the government’s recently revamped program, as fewer new ACOs appear to be joining despite CMS’ announcement. (InsideHealthPolicy).

According to the program’s 2019 stats, in the last seven years more than 100 new ACOs have entered the program per year on average; this year, only 41 new ACOs entered the program to join a class of 206. The current total for the group is 518, compared to 561 last year, according to NAACOS. (InsideHealthPolicy).

“This is a pivotal time for the transition to value, and we need to accelerate ACO adoption to effectively bend the Medicare cost curve,” said Clif Gaus, Sc.D., NAACOS president and CEO in a statement. “We hope this smaller class is only a reflection of an off-cycle start date and not an indication that the program and transition to value are slowing down.”

NAACOS has been vocal about their concerns on pushing ACOs to take on more risk before they are ready, but CMS has argued that many ACOs in the program have been able to participate without taking on any risk; CMS Administrator Seema Verma noted that only 48% of ACOs starting on July 1 “are taking on some for of risk.”