Apr 5, 2019

Medicare drug plans can assume rebates for 2020

A pharmacist and technicians fill prescriptions. Photo: RJ Sangosti/The Denver Post via Getty Images

The Trump administration says it will try to soften the blow for industry as it prepares to overhaul part of the drug-pricing system — a potential acknowledgement that its plan may happen on time.

Driving the news: Trump has proposed eliminating drug-pricing rebates in Medicare Part D, beginning in 2020. But Medicare and Medicaid administrator Seema Verma said in a memo today that insurers and pharmacy benefit managers can assume rebates will still exist as they design their 2020 plans.

Details: The Trump administration is hedging both ways.

  • Companies that sell Medicare drug plans can assume rebates will exist in 2020, contrary to the proposed rule.
  • However, if the rule to eliminate back-end rebates does go into effect that year, Medicare and taxpayers will cover 95% of a company's losses through a "demonstration" program to account for the abrupt change, according to Verma's memo.
  • That demonstration also would exist for 2021 Medicare drug plans.

The bottom line: The rule would be a massive structural overhaul to the way drug companies, insurers and PBMs negotiate drug prices. Whether the administration formally delays that change or not, it's giving the industry time to adjust to a new business model.

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Ivanka Trump plans focus on coronavirus recovery for small businesses

Ivanka Trump speaks at yesterday's White House videoconference with bank and credit card executives. Photo: Kevin Lamarque/Reuters

Ivanka Trump personally lobbied top bank executives to line up the $1.5 billion in commitments to small business that were announced yesterday at a videoconference among the bank executives and President Trump — stoking competitive juices among the execs to drive up their commitments.

The state of play: Ivanka, who has had workforce development in her portfolio going back to 2017, plans an increasing emphasis on small businesses in the weeks ahead as they navigate the rescue bill’s Payroll Protection Program, sources tell me.

Public transit's death spiral

Illustration: Eniola Odetunde/Axios

Public transit systems across the country are experiencing a painful trifecta: Ridership has collapsed, funding streams are squeezed, and mass transit won't bounce back from the pandemic nearly as fast as other modes of transportation.

Why it matters: Transit agencies could see an annual shortfall of as much as $38 billion due to the coronavirus pandemic, according to TransitCenter. At the same time, they're more important than ever, with more than 36% of essential workers relying on public transportation to get to work.

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World coronavirus updates: London mayor says U.K. nowhere near lockdown lifting

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

Prime Minister Jacinda Ardern offered hope in the fight against the novel coronavirus, saying she believes New Zealand has "turned a corner" after two weeks of strict lockdown measures. But London Mayor Sadiq Khan has said the U.K. is "nowhere near" lifting restrictions.

The big picture: COVID-19 has killed over 82,000 people and infected 1.4 million others globally as of early Wednesday, per Johns Hopkins data. Global recoveries have surpassed 301,000. Spain has reported the most cases outside the U.S. (more than 141,000) and Italy the most deaths (over 17,000). Half the planet's population is on lockdown.

Go deeperArrowUpdated 2 hours ago - Health