Good morning ... Sign of the times: There's now an official "Medicare for All" Caucus in the House.
It's been a long week, so the Bourbon Caucus (yes, there's really a Bourbon Caucus) is somewhat more front-of-mind for me right now, but still. Even just a few years ago, it would have been hard to imagine that anything even resembling a single-payer caucus could exist, much less launch in an election year.
The Trump administration's next steps on drug pricing could come quickly: The White House budget office is reviewing a new proposal to change the way pharmacy benefit managers, which are the middlemen between drugmakers and the pharmacy counter, get paid.
What I'm hearing: Even by the standards of the drug supply chain, this is likely to be an extremely complex and in-the-weeds rule, in part because it's not entirely clear how much of PBMs' rebate structure the administration can change on its own, without any help from Congress.
Driving the news: The administration took another significant step on drug pricing yesterday — arguably its most impactful step to date — when Food and Drug Administration Commissioner Scott Gottlieb rolled out a new plan to spark the development of more biosimilar drugs.
"This week, we will see more action to reform drug pricing in America than we have seen in a number of years," Health and Human Services adviser Dan Best says in a blog post.
Reality check: A strong market for biosimilars would make a big difference for future patients. Changes in the PBM industry could, too — PBMs are powerful players who operate in near-total secrecy. President Trump's plan has the potential to affect change.
But some of what HHS is hyping is just not that big a deal.
Taking a five-month breather on price increases is more of a public relations play than a business strategy, and it's far from structural change that would affect future price hikes. To wit: Pfizer's now-delayed increases are set to kick back in at the end of the year.
House Republicans are looking for ways to restore the Affordable Care Act payments the Trump administration froze just last week.
"We want this fixed, whether we have to legislate or do it by rule. It needs to happen," Rep. Greg Walden, the chairman of the Energy and Commerce Committee, told my colleague Caitlin Owens.
Threat level: House Republicans are aware that this is yet another administrative action that could raise premiums for 2019. And those rates will be finalized just before the midterms.
OptumRx, the PBM owned by UnitedHealth Group, says it never encouraged pharmaceutical companies to keep their prices high.
The background: Trump said in May that drug companies were about to announce voluntary price cuts.
Between the lines: PBMs — not pharmaceutical companies — are the main target of HHS' plan for lower drug prices.
The response: “This is simply not the case with OptumRx. Drug manufacturers independently set the prices for the drugs they manufacturer. We have not discouraged them from lowering their prices, nor have we excluded drugs with lower list prices from the formulary,” Optum said in a letter to Smith and Warren, a copy of which was shared with me.
President Trump and CMS Administrator Seema Verma. Photo: Alex Wong/Getty Images
The Centers for Medicare & Medicaid Services is planning to reopen public comments on Kentucky’s version of Medicaid work requirements, Politico reported yesterday. It’s an effort to address a federal judge’s ruling last month that blocked the new rules from taking effect.
What to watch: Another round of comments doesn’t seem like enough, on its own, to satisfy Judge James Boasberg’s complaints. How CMS responds to those comments will be a big deal.
The big question: What if this next round of comments is mostly negative? That could ultimately work against CMS’ goals.
Independent health policy experts in Massachusetts issued a stark warning yesterday about a pending hospital merger, Bob reports.
How it works: The systems charge lower prices than the dominant player in the state, Partners HealthCare. If they join forces, they could use their newly enhanced negotiating power to charge a lot more, while still remaining cheaper than Partners, state officials said in a report analyzing the deal.
Why it matters: For people in the Boston area who get health insurance through their jobs, this merger could directly affect premiums and, as a result, wages.