HealthCare Roundtable e-News – September 9, 2020

Drug Companies, Trump in Limbo Over Meetings to Discuss Favored Nation Order and Proposed Alternatives

Last week, President Trump confirmed the administration’s plan to meet with drug manufacturers to discuss potential alternatives to the president’s favored nation executive order, which would tie Medicare reimbursement to prices in other countries and pursue a more aggressive version of international pricing index proposed by the administration in 2018.

While the executive order is not yet public, Trump claimed that it was signed back in July and would be unveiled in late August after some discussion with other drug manufacturers. The president has said before that drug companies “were having a real problem with that, so they’re coming in to see me, and we expect to get a very substantial price reduction in prescription drugs.” Though industry players, including a spokesperson for the Pharmaceutical Research and Manufacturers of America, have claimed they are unaware of any planned meetings. (InsideHealthPolicy)

Summaries of two different alternatives to the order had circulated last week after the initial end-of-August deadline, with drug makers offering two voluntary demonstrations for Medicare Part B and Part D. Groups representing doctors and insurers have pushed back on alternatives proposed by drug companies over “lack of commitment” on the side of drug makers.

“Patients have been promised real reforms to get Americans the best deal of any nation in the world and to lower drug prices by 50 percent,” said Ben Wakana, executive director of Patients For Affordable Drugs Now. “Instead, the drug lobby presented a plan that is voluntary, severely limited in scope, and impermanent.”

CMS Issues Rules Requiring More Hospital Price Transparency for Medicare Advantage

CMS is reportedly looking to finalize plans to require hospitals to disclose Medicare Advantage and private insurer rates in an effort to create more pricing transparency for patients. The agency’s payment rules, issued last week, includes guidance on how hospitals should report on the median rate they negotiate with Medicare Advantage organizations for inpatient services.

A study released last year found that most hospitals’ relative prices, defined as what private insurers pay as a percentage of Medicare prices, increased from 235% of Medicare in 2015 to 241% of Medicare in 2017. More so, relative prices among different states and even health systems ranged from 150% of Medicare to more than 400%.

President Trump’s latest push to create more transparency is aimed at giving patients more information about the cost of medical care. The administration’s earlier initiatives included requiring hospitals disclose rates they negotiate with private health insurers, to which industry players say are “burdensome and interfere with private negotiations.”

California Passes Legislation to Enable Manufacturing and Distribution of State-Made Generic Drugs

The state legislature approved a bill last Monday (Aug. 31) that would direct the state’s top health agency to partner with drug companies by 2021 to produce generic or biosimilar drugs that are cheaper than brand-name products. Among the list of drugs approved for manufacturing is the diabetes medicine Insulin.

The California Affordable Drug Manufacturing Act of 2020 (SB 852), if signed by Gov. Gavin Newsom, would make California the first state to directly compete with major pharmaceutical companies. It may take years to go into effect and would require taxpayers to fund the $1 million to $2 million in startup and staffing costs. According to legislators, the state health agency has until 2023 to report back on the feasibility of the bill’s progress in manufacturing the drugs. (InsideHealthPolicy)

Newsom had previously proposed his own plan for the state to produce its own generic drugs as part of his annual budget proposal, but plans were disrupted in the wake of the COVID-19 pandemic.

Trump Reveals Health Priorities for Second Term, Avoids Mentioning Repeal of Obamacare

Last month, President Trump’s re-election campaign unveiled a list of key second-term goals for the president to encourage his base and sway undecided voters. Among the issues addressed by the committee are the lowering drug costs, tackling surprise billing, covering preexisting conditions and protecting Medicare and Social Security. Notably, the big-ticket item of whether the administration would go after the Affordable Care Act was not addressed.

Joe Biden, the Democratic nominee for president, has made it a key platform in his campaign to enhance Obamacare, as well as implement a public option favored by more progressive voters. Trump had previously voiced his support for nixing the ACA, siding with the federal court decision supporting 20 Republican state attorneys general and governors in Texas vs. United States to overturn the health policy. The Supreme Court plans to hear arguments in the case to overturn the ACA in November of this year after the election.

Prior to the airing of the Republican National Convention last month, the Republican National Committee stated that the party “enthusiastically supports President Trump and continues to reject the policy positions of the Obama-Biden Administration, as well as those espoused by the Democratic National Committee.” (InsideHealthPolicy)