HealthCare Roundtable e-News – March 19, 2019

OptumRX, UnitedHealthcare to Require New Plans to Provide Point-of-Sale Drug Discounts

In an announcement made last week, OptumRx and UnitedHealthcare, the largest U.S. health insurer, outlined a new mandate for new employer health plans to provide point-of-sale drug discounts to patients. The requirements will likely lower drug costs for more people, following the companies’ previous announcements to apply point-of-sale discounts to patients in insured group health benefit plans starting in 2019. The change reportedly led to an average savings of $130 per eligible prescription.

UnitedHealthcare president and CEO, Daniel Schumacher, told POLITICO that the previous changes led to only “modest increases” in premiums while having a “very material impact to consumers.” OptumRx CEO John Prince supported the group’s perspective that the trade-off “is worth it in terms of the slight increase in premiums but the significant value to consumers.”

The policy change is a shift from the organization’s current practices of negotiating prices with drugmakers and sending rebate checks to clients, and the actions preempt HHS’s attempts to convince Congress to eliminate those rebates negotiated between drug companies and PBMs. The organization expects that the new requirements will take effect at the start of 2020.

Senate Finance Committee calls PBMs to Testify at Upcoming Drug Pricing Hearing

Last Tuesday (Mar. 12), the Senate Finance Committee sent five pharmacy benefit managers formal notices to testify regarding the debate on drug pricing. Committee Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) sent letters to Cigna, CVS Caremark, CVS Health Corporation, Humana, OptumRx and Prime Therapeutics requesting their presence at a hearing scheduled for April 3rd. 

The committee has been working to bring more transparency into the rebate system through the series of hearings, which have included testimonies from executives and drug manufacturers. In a hearing last month, those testifying from the drug industry credited PBMs and middleman rebates for the increasing drug costs, causing PBM stock prices to fall slightly.

“Middlemen in the healthcare industry owe patients and taxpayers an explanation of their role,” Grassley and Wyden said in a statement following last month’s hearing. “There’s far too much bureaucracy and too little transparency getting in the way of affordable, quality healthcare.”

While several drug manufacturers have thrown in their support for the Trump administration’s proposal to eliminate middleman rebates, policymakers and congressional advisors on Medicaid have expressed concern about the realities of how much Medicare Part D enrollees would actually benefit from the proposal. By calling top pharmaceutical executives to testify, Senate committee members will get the opportunity to question other industry players who are part of the health care supply chain.

Azar Expresses Concerns Over Medicare for All Threat to Medicare Advantage Plans

At a House Energy & Commerce health subcommittee hearing last Tuesday (Mar. 12), lawmakers and HHS Secretary Alex Azar shared criticisms of Medicare for All, a bill proposed last month by Rep. Pramila Jayapal (D-Wash.) and over 100 co-sponsors to create single-payer health insurance for American Citizens. (InsideHealthPolicy).

Azar expressed concerns that Medicare for All’s elimination of private plans, including all Medicare Advantage plans, would leave 20 million seniors who rely on the plans with high deductibles and cost-sharing. When asked what supplemental benefits could come from Medicare Advantage plans, Azar noted lower cost-sharing, as well as some Medicare Advantage plans “that have zero-dollar generic drug coverage,” Azar said. (InsideHealthPolicy).

A spokesperson for Jayapal’s office noted that Medicare for All would eliminate Medicare Advantage plans, but would ensure the same coverage at no cost. The bill would also sunset Medicare and Medicaid, but would, however, allow the Veterans Affairs health system and the Indian Health Services to continue to operate as they do today.

House E&C Chair’s Primary Focus in 2019 Will Be to Block Trump’s Health AgendaFDA Looks to Reform Biologics Naming Process

During a session at the national health policy conference last Wednesday (Mar. 13), House Energy & Commerce Committee Chair Frank Pallone (D-N.J.) shared that his committee’s focus in 2019 will not be on supporting Democrat-led healthcare initiatives, including the high-profile Medicare for All bill, but instead will be on blocking the Trump administration’s healthcare agenda, specifically on repeals of the Affordable Care Act. Pallone also announced his committee will launch an investigation into the administration’s backing of “junk” insurance plans.

“We’ll have hearings and we’ll talk about some of these more long-term alternatives,” Pallone said in a question-and-answer session hosted by America’s Health Insurance Plans. “We’ll look at all these things, but the likelihood that those things become law with a divided Congress and Trump as president is practically nil. Our priority and focus has to be on things that we can do.” (InsideHealthPolicy).

Pallone has expressed that there are opportunities in the divided House to have bipartisan conversations on other health policy goals like lowering drug costs and pricing transparency. The Chairman has referred to the Medicare for All bill as too ambitious for the current Congress, and believes the area where he will be the most effective is in the ring protecting the ACA until the 2020 elections.

“When people voted for a Democratic majority in November, in my opinion, they basically were voting for a check on the president,” he said. “I keep reminding everyone that, if all I do over the next two years is stop bad things that Trump does from happening, I will have accomplished a lot.”