June 08, 2023
Good afternoon ... The Washington Monument is visible from the Axios newsroom in Arlington, Va., again. A few hours ago, it wasn't. So ... progress?
π Situational awareness: Senate Finance Committee chair Ron Wyden and House Energy and Commerce Committee ranking member Frank Pallone asked CMS today to do more to prevent people from being improperly kicked off of Medicaid.
- They cited a New York Times report that hundreds of thousands have lost their Medicaid coverage after the pandemic-era continuous enrollment protections expired.
1 big thing: Drug patent bill tug of war
Illustration: Natalie Peeples/Axios
Senators and industry players are jockeying over whether a bipartisan bill aimed at cracking down on patent abuse and lowering drug prices will be included in a health care package potentially coming to the Senate floor, Peter reports.
Why it matters: The bill from Sens. John Cornyn and Richard Blumenthal could lower drug prices for consumers by preventing tactics they say drug companies use to game the system and delay competition from cheaper generic drugs.
- But the path forward is far from smooth, given a range of competing interests.
Driving the news: The potential vehicle is a package Senate Majority Leader Chuck Schumer is putting together, which may also cap insulin costs at $35 per month for people with private health insurance and overhaul pharmacy benefit manager practices.
- Blumenthal told Peter he has spoken with Schumer about including his patent bill and he thinks it is "likely" to be part of the package.
- But Blumenthal's GOP partner, Cornyn, is more wary of including the measure, because he might end up opposing the package over other pieces β including the insulin cap, which he called "price fixing."
- "I'm not quite sure what [Schumer] has in mind yet, but I'm fearful that he's going to put some stink bomb in the package which will bring down everything else," Cornyn told Peter.
Between the lines: The measure β which seeks to prevent "product hopping," in which a drug company makes small changes to a drug to try to extend its period of exclusivity β also plays into a battle between drug companies and PBMs.
- PhRMA is opposed to the bill, saying it would "create an unnecessary FTC enforcement cloud over almost any post-approval research and development."
- "This would be devastating for patients since R&D that happens after FDA approval increases treatment options," PhRMA spokesperson Megan Van Etten said. "This progress should not be punished.β
- PCMA, the PBM trade group, supports it. "Putting a stop to drug companiesβ common and egregious, anti-competitive abuses of the drug patent system is fundamental to increasing competition in the market that will lead to lower prescription drug costs for employers and patients," PCMA spokesman Greg Lopes said in a statement.
- Lauren Aronson, executive director of the Campaign for Sustainable Rx Pricing, which includes PBMs, hospitals and others, added: "It is disappointing, but not surprising, to hear the pharmaceutical industry is attempting to derail passage of this bipartisan, market-based solution while continuing to wage a bogus blame game targeting others in the supply chain."
What's next: Schumer said on the floor last week that the insulin package is one of the items he wants to "begin the process of advancing" during this work period, which ends in late June.
- It's unclear what the exact timeline is or if the package could slip. Schumer's office did not respond to a request for comment.
The bottom line: Even if the insulin package could get 60 votes, it is unlikely to move in the GOP House. So the bigger fight over these policies could come later, in an end-of-year package that also has to extend health measures like community health center funding.
2. Democrats' value-based purchasing split
Illustration: Sarah Grillo/Axios
House Democrats are divided over a bipartisan bill to promote value-based purchasing agreements in Medicaid, Maya reports.
Why it matters: Their differences showcase the tension between giving patients more access to innovative therapies and cracking down on ways for drugmakers to inflate profits.
Where it stands: Rep. Anna Eshoo says her Medicaid Value-Based Purchasing for Patients Act would make cell and gene therapies more available and affordable for patients. Rep. Frank Pallone says it would favor drugmakers and could increase costs for state Medicaid programs.
- Energy and Commerce recently approved the bill, with Eshoo and two other Democrats voting for it along with all committee Republicans.
- Health Subcommittee Chair Brett Guthrie is the lead co-sponsor with Eshoo.
How it works: The bill is built on the Medicaid best price policy, which requires drugmakers to give Medicaid programs the best price for a drug that they offer to other purchasers.
- The legislation would allow drugmakers to submit a range of best prices offered under value-based purchasing arrangements as the Medicaid Drug Rebate Program best price, as long as they offer the option to all states.
Drugmakers already have this option under a Trump-era CMS rule, but none had taken advantage of it as of November, according to a Center for Medicare and Medicaid Innovation report.
- The bill would codify the rule, with some changes to prevent value-based arrangements from artificially lowering the average manufacturer price.
What we're hearing: Eshoo and other proponents say value-based drug purchasing will make it easier for payers to cover therapies that target a small number of patients, and it should be encouraged.
- "There is a large number of people in the country that are poised to take advantage of gene therapies," Eshoo told Maya. "That was a was frankly a no-brainer to me, to make this available. ... I don't quite understand the opposition."
The other side: Pallone said during the committee markup that allowing drugmakers to submit several best prices, not just one, would undermine best price protections and shift costs to states.
- "I do not think we should double down on the problematic approach in the Trump-era regulation by preemptively codifying it in federal law," Pallone said during the Energy and Commerce markup.
- "In fact, I plan to encourage the Biden administration to consider repealing this regulation,β he added.
Although most committee Democrats voted with Pallone, Eshoo has some allies.
- βI think there's merits on what she's doing and giving [drug companies] the opportunity to prove it out,β Rep. Tony Cardenas, who voted with Eshoo in the committee markup, told Maya. βI talked to her about it a couple of times, and I decided to side with her argument.β
3. Finance hearing's warnings for hospitals
Illustration: Tiffany Herring/Axios
Today's Senate Finance Committee hearing on consolidation in the health care industry touched on a range of topics, but there were a couple of warning signs for hospitals on site-neutral payments, Peter reports.
Why it matters: Most of the site-neutral payments discussion has taken place in the House so far, but now it is getting Senate attention.
What they're saying: Ranking member Mike Crapo pointed to the idea by saying: "Alignment of payment rates for certain services could provide patients with flexibilities and lower costs in addition to advancing competition."
- Still, he added, it is "essential that any reforms preserve patient safety and bolster consumer access, especially in rural areas that are still reeling from hospital closures."
- On the Democratic side, Sen. Maggie Hassan referred to the idea, as well as to a site-neutral bill she is introducing with Sen. Mike Braun. "Hospitals are charging unfair facility fees for routine care provided at a local physician's office sometimes miles away from the actual hospital," she said.
Yes, but: The panel's chairman, Ron Wyden, did not mention site-neutral. He instead focused on other areas, including PBMs, which he called "Exhibit A" for consolidation, and insurers using algorithms to deny claims β a practice he said needs "vigorous oversight."
β Thank you for reading Axios Pro Policy, and thanks to editors David Nather and Mackenzie Weinger and copy editor Brad Bonhall.
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