Jan 24, 2017

Axios Vitals

Good morning, and welcome back to Vitals. What does it mean when you have Obamacare executive order fallout, the launching of a major drug industry ad campaign, and the blocking of a big health insurance merger in the same day? It means yesterday was Monday in health care world. So today's Friday, right?

Tom Price's confirmation hearing just got more interesting

President Trump's Health and Human Services nominee was already going to face more questions about his stocks and his ethics. But now, the Senate Finance Committee will have even more reason to grill him on policy this morning — thanks to that Obamacare executive order Trump put out late Friday night. Like, what does it really mean? And how would Price apply it once he's running HHS?

Everyone is confused: Democrats aren't the only ones wondering what Price will say. Caitlin Owens reports that Republican Sen. Susan Collins called the executive order "really confusing," and said that "until there's a secretary in place...it's very difficult to say what the impact of the executive order is going to be."

Other topics they'll throw at Price: Republicans plan to ask him about Trump's Obamacare replacement plans, of course, but also about his thinking on the future of Medicare and Medicaid. Democrats will hammer him on the executive order and his stocks, but they'll also try to squeeze in a few questions on Price's plans for Medicare, Medicaid, and drug prices. (Will Price sound any more enthusiastic about negotiating drug prices than he did last week?)

The biggest danger: More "Price is Right" headlines. Not from me, though. I hate those.

What the Aetna-Humana ruling means for Anthem-Cigna

It means the Anthem-Cigna merger is probably dead too, Bob Herman reports in his story on the court ruling against the proposed Aetna-Humana deal. Why? Because the Anthem-Cigna merger faced even more antitrust hurdles than Aetna-Humana did, and that merger got smacked down hard. If Aetna and Humana couldn't clear the bar, it would be a surprise if Anthem and Cigna can.

Read Bob's story for more about why the judge ruled against the merger. (Biggest reasons: It would have consolidated the Medicare Advantage market too much, and Aetna was playing political games with Obamacare exchanges.) You should also read Bob's fun followup on quotes from the ruling on how Aetna tried to use Obamacare as leverage — including one Aetna official who said in an email that he was "really disappointed we are pulling the plug on Florida."

Why an Aetna appeal may be a long shot

This analysis from Gary Taylor, a financial analyst at J.P. Morgan Securities, concludes that even though Aetna said it's considering appealing the ruling within 60 days, "we think odds of an appeal are low." That's because the ruling was so definitive, Taylor writes, and because of the reasons Aetna lost the case — including the miscalculation of arguing that Medicare Advantage competes with traditional Medicare, rather than treating it as its own market.

Under Trump, off-label promotion rules are probably gone

Our contributor Steve Brill has a piece up this morning about one big change we're likely to get under Trump: the end of the restrictions on how pharmaceutical companies can market their drugs for off-label uses. They've been fighting those rules for years, and the Obama administration dodged the fight at a couple of key points. Now, Brill reports, there are two big reasons why the restrictions could be ended for good:

  • Trump is probably going to nominate a business-friendly Supreme Court justice to replace Antonin Scalia.
  • Scott Gottlieb, who's still the likely front-runner to run the Food and Drug Administration, has a long history of speaking out against those restrictions.

Read Brill's piece here.

Spicer: Drug prices will be part of repeal and replace

White House press secretary Sean Spicer made it clear Monday that President Trump wants action to bring down drug prices to be part of an Obamacare replacement. The reason: Trump sees it as part of the bigger picture of making health care cheaper. "He understands as we reform health care, as we repeal and replace Obamacare, the need to get hold of the cost of prescription drugs, to give more people access to them, but also to allow greater access to plans in health care," Spicer said at the White House press briefing.

That's probably not good news for the drug industry, but Stephen Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America, isn't looking to fight with Trump. He says he thinks the industry will see eye to eye with Trump on other issues — like "modernizing" the Food and Drug Administration to encourage medical innovation. "I'm optimistic that we're going to find common ground," Ubl told reporters.

If you only read one thing on executive actions ...

You should read this Incidental Economist post by smart people Nicholas Bagley and Adrianna McIntyre, who have found a long list of actions the Trump administration can take on its own to dismantle Obamacare, depending on how much it's willing to set the individual market on fire. A few of the highlights:

  • Grant more waivers from the individual mandate
  • Trim back the law's "essential benefits"
  • Stop giving cost-sharing payments to insurers
  • Allow states to impose work requirements, charge premiums for Medicaid
  • Delay enforcement of the health insurer, pharmaceutical, and medical device taxes
  • Loosen the rules for state Obamacare waivers

What we're watching this today: Senate Finance Committee confirmation hearing for Tom Price, 10 a.m. Eastern. Livestream here.

What we're watching this week: Republican retreat in Philadelphia, Wednesday through Friday.

Thanks for reading, and please keep the feedback and tips coming: david@axios.com.