Good morning. Congrats to us for making it through this week of enormous lawsuits and market-moving political announcements.
Today's word count: 890, or <4 minutes.
President Trump and HHS Secretary Alex Azar. Photo: Chip Somodevilla/Getty Images
The Trump administration is looking for Congress to implement major changes to how the federal government pays for drugs, following a week of setbacks to its drug pricing agenda.
Yes, but: The major exception to this is the administration's proposal to tie what Medicare pays for some drugs to rates in other countries.
Driving the news: The White House said late Wednesday night that it'd decided to kill its proposal to eliminate back-end rebates in Medicare Part D and Medicaid.
What they're saying: A senior administration official said yesterday that the decision to walk away from the rebate rule was based partially on "lurching bipartisan progress toward something on the Hill," and a desire to not upset a pending deal.
There were also concerns about premiums rising under the rebate rule. The president "doesn’t want any risk that seniors’ premiums could go up," HHS Secretary Alex Azar told reporters yesterday, per Bloomberg.
One more thing: The administration has also expressed interest in a controversial measure that would limit how much drug prices can rise in Part D — an idea distasteful to both pharma and free-market Republicans.
President Trump's decision to withdraw the rule that would've overhauled behind-the-scenes drug rebates led to huge stock gains yesterday for health insurance companies and pharmacy benefit managers, which have suffered since the rule was first proposed in January, Axios' Bob Herman reports.
The big picture: The health care industry's largest middlemen dodged a giant bullet since rebates are an important part of their businesses. But they are not out of the woods, as states and Congress are working to change how they influence the price of drugs.
Between the lines: The rebate rule raised fears that drugmakers would engage in "tacit collusion," according to Northwestern University health economist Craig Garthwaite.
Yes, but: PBMs have already faced new state regulations and still could run up against seismic changes at the federal level.
For all the political anger of surprise billing, hospitals in California were able to sideline a bill to crack down on the practice, Axios' Sam Baker writes.
Details: California's bill would have limited how much hospitals can charge for out-of-network emergency care.
The big picture: Hospitals' political power is vast, and it transcends partisanship. And this is yet another reminder that cutting into providers' bottom lines is always a big fight, however easy the politics might look at the outset.
Biosimilars are very far from reaching their full potential, in terms of market share and the savings to the health care system that they're bringing, according to a new paper by the Pacific Research Institute.
By the numbers: The 7 biosimilars that are on the market are creating $253.8 million in savings, the paper estimates.
The paper estimates the market savings that could be driven if all approved biosimilars were on the market, and if biosimilars received a substantial portion of the market within the 9 classes.
Situational awareness: I will be on vacation for the next 2 weeks, but you'll be in the good hands of Sam and Bob. Make sure they have plenty to write about!