Cost Reduction

March 12-16 Policy Watch: Congress to Review Drug Price Controls in Budget

March 8, 2018 3:08 pm

One health policy advocate was not optimistic that President Trump’s drug cost control proposals would make it into law.

March 8—The Trump administration has begun to put specifics behind its standing priority to reduce the cost of prescription drugs, including in its budget, which will be reviewed by a congressional panel next week.

The House Appropriations Committee plans to hold a hearing March 15 on the FY19 budget for the U.S. Department of Health and Human Services (HHS), and get testimony from HHS Secretary Alex Azar II. This week, Azar highlighted efforts to bring down the high price of prescription drugs as one of his leading priorities.

Major drug cost control ideas in the administration’s budget include:

  • Passing on discounts and rebates negotiated by pharmacy benefit managers (PBMs) to beneficiaries in Medicare Part D
  • Eliminating generics payments for low-income Medicare beneficiaries and capping out-of-pocket costs for beneficiaries who pass through the so-called doughnut hole and hit the catastrophic-coverage stage
  • Moving some drugs from Medicare Part B into Part D to encourage price negotiations by insurers and PBMs

Trying to incentivize the use of generics and moving to zero out-of-pocket costs for some Medicare beneficiaries would be “helpful,” said Lauren Aronson, executive director of the Campaign for Sustainable Rx Pricing. Beneficiaries typically owe a 5 percent coinsurance payment in the catastrophic-coverage phase of Part D, but the budget would eliminate that payment.

Some of the drug cost provisions could garner bipartisan support, “but holistically I don’t see a lot happening with it,” Aronson said in an interview. Although budgets need to be approved by Congress and in many cases are extensively changed, it is common for some of the specific proposals to end up in congressional funding bills.

“I give the president credit—and the administration—for trying to be thoughtful about the issue,” said Aronson, an executive in the Centers for Medicare & Medicaid Services (CMS) during the Obama administration. “My concern with the president’s budget is that there is nothing in there that gets to the root cause of the problem, which is how the manufacturer determines the price of their product.” 

Beyond the budget, the administration’s drug cost control efforts will include a push for greater price transparency, Azar said this week.

“Your pharmacist typically cannot tell you the real price you’re going to pay for a drug, and therefore your out-of-pocket cost, until they actually create a claim,” Azar told hospital executives March 6 at a Washington, D.C., policy meeting. “So this is a crucial piece of our efforts to bring down prescription drug prices, too.”

Azar also highlighted the “huge gaps” between the list price and the actual price of pharmaceuticals.

“This thicket of negotiated discounts makes it impossible to recognize and reward value, and too often generates profits for middlemen rather than savings for patients,” Azar said.

He urged drug companies and pharmacies to become more transparent about pricing and the outcomes of their services and products.

“And if that doesn’t happen, we have plenty of levers to pull that would help drive this change,” Azar said.

Monday, March 12

The deadline to apply to participate in BPCI Advanced, the first new payment model to be proposed under the Trump administration. Learn more.

A webinar titled “Engaging Patients and Providers: Speaking Up for Patient Safety” will be held by the Institute for Healthcare Improvement/National Patient Safety Foundation. Learn more.

Tuesday, March 13

The Centers for Disease Control and Prevention will hold a webinar with U.S. Surgeon General Jerome Adams, MD, and others on coordinating clinical and public health responses to opioid overdoses that are treated in the emergency department. Learn more.

End of the public comment period on proposed changes to the Healthcare Effectiveness Data and Information Set (HEDIS) from the National Committee for Quality Assurance. Learn more.

Update call by CMS on the low-volume appeals settlement option. Learn more.

Wednesday, March 14

Provider call by CMS to provide details on the National Physician Payment Transparency Program, also known as the Open Payments Program, and the upcoming review, dispute, and correction processes. Learn more.

Thursday, March 15

The Senate Health, Education, Labor and Pensions Committee will conduct a hearing to examine perspectives on the 340B drug discount program. Learn more.

Friday, March 16

Deadline for Medicare-eligible hospitals and critical access hospitals to submit attestation data and electronic clinical quality measure (eCQM) data for the Hospital Inpatient Quality Reporting Program. Learn more.



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