Good morning. Let me know if you're more excited for the House hearing next week on Medicare for All or the House hearing on Medicare drug payment policy, which are conveniently on the same day.
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Expensive prescription drugs that treat complex conditions often are dispensed through specialty pharmacies, and that "specialty" label is lucrative — especially when those pharmacies are owned by the same companies that manage drug benefits, Axios's Bob Herman reports.
Driving the news: Analysts at research firm 46brooklyn found Ohio's Medicaid program paid huge markups for generic specialty drugs, benefitting the state's 2 pharmacy benefit managers, CVS Health and OptumRx, at the expense of taxpayers.
How it works: CVS and OptumRx manage drug coverage for Ohio's Medicaid plans. Those plans classify many drugs — including imatinib mesylate — as specialty drugs, meaning they have to be filled through a specialty pharmacy. The catch: CVS and OptumRx own the specialty pharmacies that have to be used.
The big picture: "This isn't just Medicaid," said Antonio Ciaccia, a co-founder of 46brooklyn and a former pharmacy lobbyist. "This extends to the commercial market."
The other side: CVS, OptumRx and Express Scripts did not make executives available for interviews. A CVS spokesperson accused 46brooklyn of having an agenda and questioned its methodology.
By the numbers: This penalty pales in comparison with how much Rochester made distributing opioids to pharmacies, including ones that exhibited red flags suggesting they were dispensing opioids illicitly at the height of the opioid epidemic.
The Centers for Medicare & Medicaid Services issued a proposed rule yesterday addressing Medicare hospital payments in 2020, including how hospitals will be reimbursed for CAR-T therapies.
Details: The proposed rule narrows the gap between what Medicare pays for CAR-T and what the drug companies that make it charge, but there's still a substantial gap.
Between the lines: Hospitals would obviously rather be made whole for the cost of the procedure. There'd been talk of increasing the base payment by creating a new billing code for CAR-T, but CMS decided not to do that, at least not yet.
Go deeper: Stat News dug into hospitals' payment dilemma in March.
The big picture, from Bob: CMS is considering raising Medicare rates to hospitals by 3.7% on average next year, by far the largest proposed pay hike in several years.
Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images
Walgreens announced yesterday that it won't sell tobacco products to anyone younger than 21, beginning in September — a response to the Food and Drug Administration's crackdown on its sales to young people, Forbes reports.
Why it matters: The rise in teen vaping has alarmed public health officials, prompting strong regulatory action and, increasingly, support of a higher smoking age in response.
Colorado became the blue state that's gone the farthest toward creating a public option yesterday, when its legislature passed a bill directing state agencies to come up with a plan by November, AP reports.
What we're watching: Whether approving anything expanding government's role in health insurance fits the Trump administration's definition of giving states more flexibility, assuming that this administration would be the one that needs to approve Colorado's plan.
Editor's note: An earlier version of the third story said hospitals all get paid the same amount for CAR-T therapy. That's incorrect. Their payments vary.