Jan 30, 2019

Congress shows its hand on drug prices

Caitlin Owens, author of Vitals

Sen. Chuck Grassley during a Judiciary Committee hearing last year. (Photo: Chip Somodevilla/Getty Images)

A key Senate panel seemed to hone in yesterday on some bipartisan ideas to cut federal spending on prescription drugs.

The big picture: Members of the Senate Finance Committee were mostly interested in proposals that would cut payments to insurance companies and doctors, though some also raised questions about pharmaceutical companies.

Details: Republicans and Democrats were both open to restructuring Medicare Part D, including payments to insurers.

  • “There’s reporting that patterns of overbidding exist that may indicate a potential gaming of the system," Finance Chairman Chuck Grassley told Axios, alluding to a recent Wall Street Journal story that said insurers have pocketed an extra $9.1 billion because of the way they estimate their costs.

In Medicare Part B, senators discussed changing the way the government reimburses doctors for the drugs they buy — "getting away from a percentage, which creates an incentive to go with the most expensive possible prescription and instead going with something closer to a flat fee," Sen. Pat Toomey said.

  • Doctors and hospitals have fought such changes before, and are fighting a similar proposal from the Trump administration. Critics say the current arrangement gives doctors an incentive to use the most expensive drugs, because they collect a percentage of the cost.

There was also support for changing the way pharmacy benefit managers handle their rebates, which the pharmaceutical industry may support and Trump is also considering.

"I thought there was a big swath of ground for bipartisanship," Sen. Ron Wyden said.

Grassley also hinted at more dramatic price cuts for drugs in an interview, but offered few details.

  • With more transparency throughout the system, "the companies have to justify their price increases and have uniform pricing," he said. "Whether I buy a drug or you buy a drug, there ought to be one price for a drug and everybody ought to pay the same thing."
  • A source familiar with Grassley's thinking said he was not advocating for price controls.
  • Other committee Republicans also questioned the gap between drug companies' profits and their research spending, but did not endorse any proposals to limit those profits.

Go deeper

How Big Tech has responded to the protests

A protester holds a sign in downtown Minneapolis to protest the death of George Floyd on May 31. Photo: Stephen Maturen/Getty Images

An explosive weekend in America sent Silicon Valley grasping for moral clarity. While many companies and executives spoke out against racial inequities, critics and even some of the rank-and-file found some of the companies' responses lacking.

Why it matters: Tech companies have giant platforms, and their leaders have become public figures, many of them household names. History will record their words and actions — which, in the case of platforms like Facebook, Twitter and YouTube, directly shape the bounds of public discourse.

Pandemic and protests can't stop the stock market

Traders work on the floor of the NYSE. Photo: Spencer Platt/Getty Images.

United States equities were on pace to open higher Monday following big gains in Asia and Europe and a risk-on bid in currency markets.

Why it matters: Stock markets could continue to rise despite an unprecedented global pandemic, violent protests over police violence in the U.S. not seen since the 1960s, and spiking tensions between the world's two largest economies.

2 hours ago - Sports

The sports world speaks up about death of George Floyd

Celtics guard Jaylen Brown. Screenshot: Jaylen Brown/Instagram

There was a time when a months-long sports absence would have silenced athletes, leaving them without a platform to reach fans or make their voices heard.

Why it matters: But now that athletes boast massive social media followings and no longer need live game broadcasts or media outlets to reach millions, they're speaking out en masse amid protests over the death of George Floyd and other police-related killings of black people — delivering messages of frustration and unity, despite their leagues not currently operating.