HealthCare Roundtable e-News – November 20, 2019

A Note About Our Annual Conference

We’d like to thank everyone who attended the Roundtable’s 15th Annual Conference earlier this month in Alexandria, VA. We appreciate the feedback that we’ve been receiving and would welcome any suggestions for next year.

In the meantime, many have asked for copies of the presentations. We are in the process of adding conference information – including copies of the presentations – to the Roundtable website. We’ll let everyone know as soon as the updates are complete.

Again, thanks to everyone who helped make this a record-breaking conference!

Tom Lussier, Roundtable Administrator

Health Groups Concerned the Proposed Transparency Rule Would Likely Confuse Patients, Raise Costs

Health care providers are speaking out against a rule proposed by the Trump administration that they worry could raise costs and confused patients. Blue Cross Blue Shield (BCBS) Association President and CEO Scott Serota said in a statement that while he “supports efforts to empower consumers with transparent information, the proposed rule would not help consumers better understand costs or lower costs.” (InsideHealthPolicy).

The proposed rule, which was announced by HHS Secretary Alex Azar and CMS Administrator Seema Verma last week, aims to personalize consumers’ cost-sharing capabilities through an online resource, which most plans and issuers would be required to monitor and update regularly. During a press call, Azar said that the rule aims to put consumers in control, but those in the health care sector were quick to pick up on gaps in the rule. Serota argued that “clinicians and medical facilities could see in the negotiated payments a roadmap to bidding up prices rather than lowering rates.” (InsideHealthPolicy).

Sen. Ron Wyden (D-Ore.) released a statement following the announcement saying that the preferred approach to increase price transparency for consumers would be through his proposed Health Care Price Check Act of 2019, stating that the act would remove the possibility of giving the health care industry the upper hand in determining prices. Wyden introduced the bill earlier this year as a solution to giving consumers price and quality information upfront. (InsideHealthPolicy).

West Health Analysis Suggests that ‘Big’ Pharma Could Lose $1T But Still Be the Most Profitable Industry

Researchers from the West Health Policy Center and Johns Hopkins Bloomberg School of Public Health released an analysis last week, citing that even if pharmaceutical giants lost $1 trillion in sales, large brand drug makers would still be the most profitable companies and would maintain current research investments. According to West Health, big drugmakers have the highest average return on investment of all industries, suggesting that they could absorb a major revenue loss without losing lead institutional investors. (InsideHealthPolicy).

“Recognizing that large pharmaceutical manufacturers have a greater ROIC than other industries, an important consideration for policymakers is the magnitude of profit loss that large pharmaceutical manufacturers could sustain while maintaining a higher or equal ROIC compared to other industries,” the researchers said. PhRMA criticized the report, arguing that it would be “naive” to think that a $1 trillion loss of revenue would not hurt research and development. (InsideHealthPolicy.)

Based on its analysis, West Health suggested that policymakers should look to distinguish between investment in companies that engage in early-stage research and those that focus on late-stage development. A majority of drug companies will look to invest in expensive, late-stage clinical trials instead of early-stage research, which leads to fewer drugs and more expenses for consumers down the line. (InsideHealthPolicy).

Appeals Court Eyes Narrow Ruling in Association Health Plans Case

Last week, a federal appeals court began hearings on a lawsuit challenging the Trump administration’s rule to expand association health plans (AHPs), giving people and employers the ability to join group insurance plans that aren’t bound by the Affordable Care Act. The administration is seeking to have the 2018 rule restored after key provisions were tossed out, and those who support the rule have argued that the plans help employees and small business owners who would not otherwise have access to insurance.

The rule, which has spurred lawsuits from New York and other states, has been criticized as an ACA alternative after the judge last year called it “a clear end-run around the ACA.” Plaintiffs in the lawsuit argue the Trump administration expanded AHPs in order to undermine the ACA markets, while others, including Katie Mahoney of the U.S. Chamber of Commerce, suggest the regulation “couldn’t exist without the ACA and all the protections built in for consumers.”

During the hearing, two of the three federal judges proposed that the court could issue a limited ruling upholding the administration’s AHP rule but avoid commenting on the rule’s potential ramifications for small businesses seeking to create group insurance plans that do not comply with the ACA. The plaintiffs warned that the courts should not ignore the implications that the rule has on the ACA, with lawyer Matthew Grieco arguing that the whole point of the ruling is to encourage the offering of more plans that circumvent the ACA. (InsideHealthPolicy).

Industry Experts Look to FDA for Direction on Authorized Biosimilars, Ask Whether the Pathway Would Undercut Incentives

While makers of biologic drugs continue to urge the FDA to consider allowing the development of authorized biosimilars, industry experts and pharmacy benefit managers are weary that the path will lead to brand drug makers to disrupt generic drug competition and circumvent rebate deals with PBMs.

Last year, the FDA indicated that it could be open to an authorized biosimilar pathway, including that anyone can submit an application for a biosimilar of the reference product, including makers of biologics. Recently, acting director of policy for the FDA’s Office of Therapeutic Biologics and Biosimilars, Eva Temkin, stated that there is discussion around an authorized biosimilar pathway and the agency is actively considering the idea. (InsideHealthPolicy).

Following the indication, Scott Lassman, principal at Lassman Law+Policy, asked whether authorized biosimilars would allow reference product makers to jump ahead of biosimilar developers. Lassman noted that such moves would undercut the value of the one-year exclusivity incentive attached to the first interchangeable biosimilar. Brian McCormick, Vice President and Chief Regulatory Counsel of Teva, noted that there would be significant pushback should that be the case.

In February 2019, Eli Lilly wrote a public letter suggesting that the FDA expands on its thinking in an effort to drum up support for the proposed initiatives.

“Sponsors of innovative biological products already are endeavoring to market second versions of their products in ways that allow them to increase patient access. Clear direction from the FDA on marketing these second versions of innovative products will help all sponsors plan their product development programs and, ultimately, benefit patients,” the comment letter said. (InsideHealthPolicy).