HealthCare Roundtable e-News – March 27, 2023

 

Registration Now Open

Webinar – March 28, 2023 – 2:00 PM (EST) – The Cost of the Pharmaceutical Industries’ Anticompetitive Practices and its Impact on Public Sector Purchasers

To protect profits and delay competition, pharmaceutical companies often abuse patent thickets, the accumulation of an overlapping set of patents, and other anti-competitive practices which leads to higher costs for Roundtable members and the public sector purchasers they serve. A recent Matrix Global Advisors (MAG) report highlights the cost of these practices, finding that abuse of patent thickets results in certain drugs costing patients and the healthcare system an estimated $1.8 billion to $7.6 billion per year.

Join us for a discussion with the Public Sector HealthCare Roundtable senior policy team and the report’s authors on the cost of anti-competitive practices by the pharmaceutical industry and policymakers’ efforts to enact legislative and regulatory reform.

Register here.

About the Speaker

ALEX BRILL, CEO

Matrix Global Advisors (MGA)

Prior to founding MGA, Alex was the policy director and chief economist for the House Committee on Ways and Means, where he worked from 2002 to 2007. At Ways and Means, Alex directed policy development and led negotiations on a variety of tax, health, pension, and trade matters.

Alex has testified numerous times before Congress on tax policy, labor markets, unemployment insurance, Social Security reform, fiscal stimulus, the manufacturing sector, and biological drug competition. He has served as an expert witness and litigation consultant in both tax and pharmaceutical patent litigations.

In addition, Alex served as a tax policy advisor to the National Commission on Fiscal Responsibility and Reform, coauthored the book The Real Tax Burden: More Than Dollars and Cents with Alan D. Viard, and is currently a senior fellow at the American Enterprise Institute.

Top News

Senate Commerce Committee Advances PBM Transparency Bill

Wednesday, March 22, the Senate Committee on Commerce, Science, and Transportation advanced S.127 Benefit Manager Transparency Act of 2023, via an 18-9 largely party-line vote. Ranking Member Ted Cruz (R-TX) offered three amendments, all of which were defeated. In summary, the bill gives the Federal Trade Commission (FTC) enforcement power to:

  • Prohibit pharmacy benefit managers (PBMs) from engaging in certain practices when managing the prescription drug benefits under a health insurance plan, including charging the plan a different amount than the PBM reimburses the pharmacy.

  • Prohibit PBMs from arbitrarily, unfairly, or deceptively (1) clawing back reimbursement payments, or (2) increasing fees or lowering reimbursements to pharmacies to offset changes to federally funded health plans.

PBMs are not subject to these prohibitions if they (1) pass along 100% of any price concession or discount to the health plan, and (2) disclose specified costs, prices, reimbursements, fees, markups, discounts, and aggregate payments received with respect to their PBM services.

In February, the Roundtable submitted a statement for the Commerce Committee’s hearing on increasing federal oversight of PBMs. The Roundtable’s statement emphasized our members’ support of efforts to constrain health care cost growth and highlighted the role that PBMs play in maintaining affordable drug costs for Roundtable members’ active and retired populations. Our members rely on the ability of PBMs to negotiate with all parties in the prescription drug supply chain for the best possible price.

 

Secretary Becerra Testifies Before Senate Finance Committee on Proposed FY 2024 Budget

Last week, Department of Health and Human Services (HHS) Secretary Xavier Becerra testified before the Senate Finance Committee and fielded questions on President Joe Biden’s FY 2024 budget proposal. Secretary Becerra addressed a range of topics, including:

  • Medicare Advantage payment proposals in the 2024 Advance Notice
  • Implementation and transparency into drug price negotiation provisions of the Inflation Reduction Act (IRA)
  • Increased transparency into Pharmacy Benefit Manager (PBM) practices
  • Implementation of the No Surprises Act
  • Access to Alzheimer’s treatments and the accelerated approval pathway

Healthsperien attended the testimony and full notes on the hearing are available here. Healthsperien’s analysis of the hearing is also available here. Secretary Becerra will continue his budget testimony tour next week when he testifies in front of the House Energy and Commerce Committee on March 29, 2023. 

 

Major U.S. Insulin Makers Launch Efforts to Lower Cost of Products

All three major drug manufacturers of insulin in the United States have launched efforts to reduce the cost of their products. On March 16, Sanofi announced that in 2024, the price of Lantus, its most prescribed insulin, will decrease by 78%. Sanofi will also implement its own $35 cap on out-of-pocket costs for all patients with commercial insurance. Earlier this month, Eli Lilly announced it will cut the list price of its most commonly prescribed insulin products by 70% in the fourth quarter of 2023. Additionally, Eli Lilly will expand its Insulin Value Program, which caps patients’ out-of-pocket costs at $35 or less per month. Earlier this month, Novo Nordisk announced that beginning January 1, 2024, the company will lower the cost of several products for individuals with type 1 and type 2 diabetes by up to 75%. Novo Nordisk will also reduce the list price of its unbranded biologics to match the lowered price of each respective branded insulin.

These announcements come after new pressure from biosimilar manufacturers to lower prices, as well as efforts by lawmakers to cap the cost of insulin. Last summer, Democrats attempted to cap copayments for insulin at $35 a month for all plans, including the private market, as part of the Inflation Reduction Act. However, the final law only applied to Medicare beneficiaries. Beginning July 1, the Inflation Reduction Act provision will go into effect for Medicare beneficiaries. President Joe Biden applauded the insulin manufacturers for lowering costs, but President Biden and congressional Democrats are still pushing for Congress to pass legislation that further cements cost caps for insulin.

Executive Action

On Thursday, the Biden-Harris Administration celebrated the 13th anniversary of the Affordable Care Act (ACA) by highlighting enrollment numbers during the 2023 Marketplace Open Enrollment Period and lower health care costs. HHS also released a report from the Office of the Assistant Secretary for Planning and Evaluation (ASPE), showcasing more than 40 million people enrolled in Marketplace or Medicaid expansion coverage related to provisions of the ACA. In addition, the ASPE report found that: 1) Marketplaces and Medicaid expansion, programs created by the ACA, have enrolled millions of Americans since the programs launched in participating states in 2014. 2) Nearly 15.6 million consumers were enrolled in Marketplace plans as of February 2023 (across all 50 states and the District of Columbia), and 18.8 million people (across 38 participating states and the District of Columbia) were newly enrolled in Medicaid via the ACA’s expansion of eligibility to adults as of September 2022. 3) An estimated 40.2 million people were enrolled in coverage under the ACA based on 2022 and early 2023 data, which represents a 30% increase from 2021, and more than triples the number of people enrolled in 2014.

Administrative Action

  • On Monday, HHS announced the creation of the Office of Family Violence Prevention Services, which will sit within the department’s Administration for Children and Families (ACF). Previously work related to domestic violence was based in ACF’s Family and Youth Services Bureau, however, it will now come directly under the head of the agency. The Office of Family Violence Prevention Services will prioritize developing a strategy to prevent and respond to domestic violence, working with the Departments of Justice, Housing and Urban Development, HHS, and implementing government spending on survivors. In addition, the office will offer prevention programs, survivor services, and a whole family approach through coordination between state and federal funding vehicles. This announcement comes at a time of high rates of domestic violence, which increased during the COVID-19 pandemic.  

  • The CARIN Alliance, a multi-stakeholder coalition started by former Department of Health and Human Services (HHS) officials to advance consumer-directed data exchange, along with HHS, released a report on their public/private sector efforts to develop a digital identity federal Proof of Concept (PoC) with the goal of using a person-centric approach regarding health information. This includes testing a single-sign-on approach to facilitate easier patient access to medical records. The report highlights the testing process of four workgroups in the PoC and lessons learned related to digital identity and API-based health information exchange.

Congressional Action

  • On March 17, the Congressional Tri-Caucus issued a letter to the Department of Health and Human Services (HHS) Secretary Xavier Becerra, calling on the department to preserve Medicaid coverage and protect access to healthcare during the Public Health Emergency (PHE) unwinding. The letter highlights concerns that states and territories are beginning the process of “unwinding” the Medicaid continuous coverage requirement, which could lead to millions of low-income individuals being at risk of losing their health insurance. The letter requests that Secretary Becerra prioritize beneficiary access to care and use HHS’ new authority from the Consolidated Appropriations Act of 2023 to prevent eligible Medicaid families from losing health coverage.

  • On Wednesday, Senators Michael Bennet (D-CO) and Ron Wyden (D-OR) introduced the Better Mental Health Care for Americans Act to expand access to mental and behavioral health care for Americans on Medicare, Medicare Advantage, Medicare Part D, and Medicaid. Specifically, the Better Mental Health Care for Americans Act would: 1) Require parity for mental and behavioral health services in Medicare Advantage, Medicare Part D, and Medicaid. 2) Ensure that Medicare Advantage plans maintain accurate and updated provider directories, so beneficiaries understand who is in-network. 3) Encourage mental and behavioral health integration with physical care by increasing reimbursement rates for Medicare and Medicaid. 4) Establish a demonstration project to increase access to integrated mental and behavioral health care for children across different settings, like schools. 5) Increase accountability and oversight of integrated mental and behavioral health care under Medicare, Medicaid, and private health insurance plans. 6) Require the Centers for Medicare and Medicaid Services to develop and implement plans to better align payments, measure access and quality, and improve mental and behavioral health care prevention services.

  • In a letter to U.S. Senator Whitehouse (D-RI), the Congressional Budget Office (CBO) said it overestimated projections for federal healthcare spending from 2010 to 2020 and expects costs to remain lower than expected. In its report, CBO found that mandatory outlays for budget categories including Medicare and Medicaid were 9% less than originally projected in 2010. Compared to the original projections, the $1.1 trillion less in spending can largely be attributed to lower costs per beneficiary. According to CBO, Medicaid costs were lower than anticipated for people with disabilities and chronic conditions, and Medicare prescription drug expenses also ended up being lower than expected. These findings are promising for federal legislators as there is mounting concern over the solvency of the Medicare trust fund, as well as general health care costs. 

Medicare

On Thursday, the Center for Medicare and Medicaid Innovation (CMMI) announced the Value-Based Insurance Design (VBID) Model will be extended through calendar year 2030. Additionally, CMMI plans to introduce changes intended to address the health-related social needs of patients, advance health equity, and improve care coordination more fully for patients with serious illness. Whether this extension will include the Hospice Benefit Component or other elements of the original model remains to be seen. The extension comes amidst a multitude of changes and new model developments at CMMI in accordance with the Center’s refreshed priorities for the coming decade. For more information on the current model design, please see CMMI’s overview CY24 RFA fact sheet.

Medicaid

  • On Thursday, the North Carolina House of Representatives voted across party lines to pass Medicaid expansion, following the nearly unanimous passage in the Senate last week. If enacted, about 600,000 North Carolina residents would be newly eligible for Medicaid coverage. After a final vote in the House this week, the bill is anticipated to be signed by Governor Roy Cooper. Lawmakers must include financial aspects of the policy in North Carolina’s broader budget bill, which could serve as an additional barrier prior to implementation of the expansion.

  • Late last week, the Commonwealth Fund released an issue brief exploring the impact of Medicaid Expansion during the Public Health Emergency (PHE) on inequities in health insurance coverage and access for Black and Hispanic adults. The study found that although uninsured rates reached record lows for Black, Hispanic, and white adults during the PHE, significant progress in coverage will be lost after the PHE ends. Study findings include: 1) Between 2013 and 2021, the insurance coverage gap between Black and white adults dropped from 9.9 to 5.3 percentage points, while the gap between Hispanic and white adults dropped from 25.7 to 16.3 points. 2) Black and Hispanic adults experienced more significant gains in Medicaid and individual-market coverage than white adults between 2019 and 2021. 3) Compared to lower-income white adults, more significant percentages of lower-income Black and lower-income Hispanic adults live in states that haven’t expanded Medicaid.

Mark Your Calendar for Upcoming Roundtable Events

Webinar – May 9, 2023 – 2:00 PM (EST) – Drivers of Health Care Costs: Hospital Consolidation and Lack of Price Transparency

With healthcare costs growing at an unsustainable rate, employers, taxpayers, and patients have to pay more for the same quality of care. Hospitals are one of the top drivers of rising healthcare costs due to the lack of market competition. Join us to hear from the Public Sector HealthCare Roundtable senior policy team and our group of experts on the impact of hospital consolidation, anti-competitive practices, and the lack of price transparency on patients and market-based solutions to increase hospital competition and reduce healthcare costs.

 

19th Annual Conference – November 1-3, 2023