HealthCare Roundtable e-News – May 29, 2019

Senate ‘HELP’ Committee Reveals Bipartisan Health Package

Senate leaders unveiled a draft version of a bipartisan health package proposed by health committee Chairman Lamar Alexander (R-Tenn.) and Ranking Democrat Patty Murray (D-Wash.) in an effort to lower health care costs. The proposal includes sections covering medical bill transparency, improving public health, the exchange of health IT and air ambulances. (InsideHealthPolicy) The Public Sector HealthCare Roundtable submitted recommendations to the Committee earlier this year, and many of the proposals included in the draft legislative package are consistent with our priorities. 

In revealing the proposed package, Alexander stated that that the elements of the proposal “are common sense steps we can take, and every single one of them has the objective of reducing the health care costs that you pay for out of your own pocket. We hope to move it through the health committee in June, put it on the Senate floor in July and make it law.” 

The package does not include the Trump administration’s proposal on point-of-sale rebates in the commercial market. At a recent Senate Finance Committee Hearing, several executives of drug manufacturing companies indicated that they would not consider lowering drug prices to correspond with rebates unless the administration expanded the rebate rule to the commercial market, though concerns that the proposal would raise premiums for seniors in Medicare Part D have likely been the cause of excluding the rule from the package.(InsideHealthPolicy). 

The package will likely affect pharmacy benefit managers (PBMs), as provisions in the draft require PBMs to pass on 100 percent of rebates or discounts they negotiate with drug companies to insurers. The plan would also prohibit PBMs from engaging in spread pricing, or charging a health plan, patient or plan sponsor more for a drug than the PBM paid to acquire it.

House Committee Leaders Propose Part D Restructuring in Draft Version of Drug Pricing Legislation

The House unveiled its latest legislation plan on lowering drug prices and health costs last week, with health committee leaders also releasing a drafted proposal to reform to Medicare Part D and caps on out-of-pocket fees for medications. The bill, presented by the House Ways and Means and Energy and Commerce committees, would cap patient cost-sharing at the catastrophic phase spending threshold, increase health plans’ share of costs in the phase, and reduce the government’s obligation from 80 percent to 20 percent over four years. 

“Medicare Part D has helped tens of millions of seniors and individuals with disabilities access life-saving therapies; however, some Medicare beneficiaries across the country are facing high out-of-pocket costs for many medications, including insulin, even with Part D coverage. Already this Congress, our committees have held several hearings with patients and experts from across the political spectrum to discuss options to lower prescription drug prices. Universally these witnesses agreed that Medicare Part D can and should be improved to cap out-of-pocket spending, and lower costs both for the patients and for the Medicare program,” said members of the House Ways and Means committee in a press release issued last week. 

Ways and Means committee leaders are looking for feedback on further restructuring for Part D, including changes to the coverage gap, catastrophic threshold, low-income subsidies, and ways to boost generics over brand-name drugs.

Tensions Between House Democrats and Trump Halt Drug Pricing Discussions

Last week, the Trump administration vowed to cut off work with Democrats as the groups continued to discuss policies for lowering drug prices, a move to counter the Democrats’ congressional investigations into the President’s behavior and activity. The White House and the office of House Speaker Nancy Pelosi (D-Calif.) have been collaborating on legislation surrounding Medicare negotiations and the lowering of drug prices, a bipartisan effort that has recently slowed to a halt among other disagreements. 

House and Senate Republicans had expressed their concern over the administration’s willingness to lean toward Democrat priorities in taking on Medicare negotiations. In a letter to the Congressional Budget Office, Senate Finance Chair Chuck Grassley (R-Iowa) vowed that he would not let Congress “unravel what’s right about Medicare Part D,” in reference to the proposed Medicare negotiations and enablement of generics and biosimilar competition. 

“I think we are in the driver’s seat anyway because the president hasn’t proposed legislation,” Grassley had suggested on the topic of drug pricing last week. “I think in our separate ways we are going to continue to work and I think there is not much the President talking to Pelosi would do about what we are doing here already.” 

While the Senate has prepared its own package to tackle health costs, Grassley has shown his support for other drug-pricing actions in the House, including passage of the Roundtable-supported Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act to ensure generic drug makers have access to samples they need for drug development. (InsideHealthPolicy).