Axios Vitals

A briefcase with a red cross on the front.

March 31, 2017

Happy Friday! Here's another reason President Trump is talking about working with Democrats: He'll need them on drug prices. Not clear who he'd get, other than Rep. Elijah Cummings, but his populist streak means he's got to give it a try. Just as soon as he's whacked Obamacare and everything else on the Democratic health care agenda a few more times.

Who does Trump need on drug prices? Democrats

Roll your eyes if you want, but that's what it's going to take, if he really wants to do the things he's talking about. Caitlin Owens reports that Trump has been doubling down on a basic conflict: His ideas on bringing down drug prices are populist, and mainstream GOP thinking is more about increasing competition and letting the markets work. So the more he talks about negotiating drug prices and importing cheaper drugs from other countries, the more he'll need Democrats to make that work.

So how's that going? Trump is still talking with Cummings, but Bernie Sanders, who's also an advocate of the same ideas, doesn't trust him — he tells Caitlin that Trump "lied a lot." And Republicans aren't into those ideas and don't think the votes are there. Read Caitlin's story here.

Bonus: Trump's Food and Drug Administration nominee, Scott Gottlieb, isn't really into those ideas either, especially the drug reimportation. Guessing he's going to get a question or two about that at his confirmation hearing on Wednesday.

How to charm Democrats, step one: Kick Planned Parenthood

And how did Trump start his new outreach to Democrats yesterday? By working with congressional Republicans to take money away from Planned Parenthood. Vice President Mike Pence cast the tie-breaking vote in the Senate to get rid of an Obama administration rule that kept states from denying federal funds to health clinics that perform abortions. It's not the full-blown Planned Parenthood defunding that Republicans want — but it was the warmup.

Insurers on Obamacare payments: Nope, that wasn't clear

House Speaker Paul Ryan said yesterday that the Trump administration could use its "discretion" to keep paying insurers for those cost-sharing reduction subsidies they have to give to low-income Obamacare customers. So, yay, problem solved, right?

Not really. Insurers really want to hear that directly from the Trump administration, and they haven't. Until they do, they're not making any decisions about staying in the Obamacare marketplaces next year. And Health and Human Services secretary Tom Price wouldn't answer questions about this at Wednesday's HHS budget hearing. He said he couldn't because he's a party to the House GOP lawsuit challenging the subsidies — which Ryan said the House isn't dropping.

Here's what insurance officials told me yesterday:

  • Margaret Murray, CEO of the Association for Community Affiliated Plans, which represents safety-net health plans: "We need a clear, unambiguous statement from Congress and the administration that they're going to fund the payments, and we have not received that."
  • Ceci Connolly, CEO of the Alliance of Community Health Plans, which represents not-for-profit insurers that are run by providers: "Speaker Ryan's comments are encouraging but not clear enough for companies to make solid business decisions. If the House maintains its lawsuit and the Trump administration drops the appeal, millions of working families will lose these vital subsidies."

Why it's so hard to solve: Re-upping Caitlin's piece about how Republicans got themselves into this mess, but you should also read Nicholas Bagley's plain-English explanation of why the House and the Trump administration can't just let the whole thing drop, even if they wanted to.

Trump Freedom Caucus trolling watch

President Trump started the day yesterday by tweeting that the Freedom Caucus "will hurt the entire Republican agenda if they don't get on the team," and promising to "fight them, & Dems, in 2018!" By the end of the day, he was calling them out by name.

  • Freedom Caucus member Mark Sanford, per the New York Times: "Intimidation may work with some in the short term, but it never really works in the long run."
  • Freedom Caucus member Dave Brat's tweet last night: "[W]e are too close to ending Obamacare to stop now. Let's repeal the regulations and get this deal done."

They're also not any closer to a deal on Trumpcare, as Jonathan Swan reported yesterday — because the moderate Tuesday Group doesn't want to meet with them.

Still unresolved: the future of the national health IT office

What should be on your radar if you're watching health IT developments? We checked in with Farzad Mostashari, the CEO of Aledade, the former national health IT chief under President Barack Obama, and a member of the Axios board of independent experts. His big concern: what will the Trump administration do with the Office of the National Coordinator for Health Information Technology, the office he used to lead?

Here's what he told us:

"As the [health IT policy and standards committees] had their final meeting today, the future of ONC is a key concern. Things to watch for in the coming days in the world of HIT include the standing up of a new HIT advisory committee and a new National Coordinator being named as soon as next week. Also keep an eye on the budget: reports are that the spending proposal for this fiscal year has no cuts to ONC. We shall see what next year's will be once the full budget is out later this spring, but early indications are that the administration is not done with ONC just yet."

And those are the low drug prices

Bloomberg had me with the headline on their smart look at drug pricing trends: "Drugmakers Are Trying a New Strategy: Charging Less." But what's really striking when you read the piece — by Caroline Chen — is what counts as the low prices:

  • Regeneron Pharmaceuticals and Sanofi's new drug for a painful skin condition costs $37,000 a year. But hey — the older ones cost $50,000!
  • Same deal with Roche's new treatment for the more severe form of multiple sclerosis. Price tag: $65,000 a year. That's 25 percent cheaper than an older competitor.

So, why are we celebrating again? Because now, at least, drugmakers are realizing that they can compete on price, and may get points for doing it. Key quote from Roger Longman, CEO of the data analytics company Real Endpoints: "Drugmakers used to say, 'We can price whatever we determine is the value...Now they're saying, 'Wait a minute, we cannot determine value in a vacuum.'"

Followup on that controversial CEO's new role

Bob Herman reported in Tuesday's Vitals that the American College of Healthcare Executives named former Swedish Health Services CEO Anthony Armada as a national board leader — even though Armada resigned from Swedish a month ago amid a scandal tied to neurosurgery care. After that piece ran, Deborah Bowen, head of ACHE, said her group was "eager to work with him" and justified Armada's new leadership role in a statement to Axios:

"We have no reason to believe Tony was involved in any wrongdoing. He was very forthcoming about the situation and confirmed that the decision to step down was his. We know that leadership is a complex and challenging endeavor and respect Tony for acting in the best interest of his organization."

From the Seattle Times: "Ten surgeons and staff members joined together for a meeting with hospital leadership…the surgeons reiterated concerns to Armada…they were clear in their message: All the problems that had been ignored were poised to burst into the open. Swedish's proud culture of safety was at risk."

What we're watching today: Trump meets with National Institutes of Health director Dr. Francis Collins, 3 p.m. Eastern.

What we're watching next week: Centers for Medicare and Medicaid Services releases final Medicare Advantage payment rates and policies, Monday, April 3; House Energy and Commerce oversight subcommittee hearing on health care cybersecurity, Tuesday, April 4; Senate HELP Committee confirmation hearing for Food and Drug Administration nominee Scott Gottlieb, Wednesday, April 5.

Have a great weekend, and send smart health care stuff my way: [email protected].