With Congress back in session and U.S. mid-term elections 50 days away, drug pricing remains front and center on Capitol Hill as well as on the campaign trail. It’s been nearly four months since the Trump administration released its American Patients First blueprint aimed at driving down prescription drug costs and increasing transparency within the marketplace. And while the White House has cited progress on the blueprint, we saw another price increase take center stage last week. The 400 percent increase on an antibiotic drew sharp rebukes from the FDA as well as political leaders, patient voices and prominent physicians.
Consensus on realistic solutions to address pricing continues to be deeply divided. Policymakers remain split on how to advance the issue, along party lines as well as at state versus federal level. And with that same lack of common ground on the path forward across payers, PBMs, hospitals and pharmaceutical companies, how to advance the agenda on pricing, medical advances and patient care remains as complicated as ever. Here are three key areas to watch in the coming weeks:
1. Transforming transparency: Drug rebates take center stage
The U.S. Department of Health and Human Services (HHS) recently celebrated an “unprecedented” number of actions taken from the president’s blueprint for drug pricing reform within the first 100 days, including generic drug approvals, 15 drug companies that postponed or canceled increases or cut list prices, and expedited review for products with market competition.
Aligned with those actions, HHS is now taking on drug rebates. While the text of a new proposed rule, Regulation to Require Drug Pricing Transparency, isn’t publicly available yet, it reportedly will diminish protection of rebates between pharmacy benefit managers (PBMs), pharmaceutical companies and insurers. This move has the potential to increase the urgency for other tools that drive down drug costs, but some critics question whether HHS has the authority to eliminate rebates without approval from Congress.
2. Sticker shock: DTC ads and the push for prices
Also making headlines is movement on efforts to require drug companies to report prices front and center in direct-to-consumer (DTC) ads. One sticking point of this idea, floated in the White House blueprint, was how to enforce it. The Senate recently passed a measure that would address this, providing HHS with $1 million in funding to take on DTC disclosure requirements. Championed by Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa), this shift would have major implications for a variety of groups: patients, who currently pay a range of prices depending on their insurance coverage’s ability to negotiate prices; insurers, which would have to identify new approaches to be competitive in covering expensive drugs; and drug companies, which would face new challenges in industry competition. However, movement has stalled on the measure.
GOP leaders last week blocked efforts to pass in the House, and the path forward is unclear. However, we can expect the push for DTC transparency to be elevated again. Continued pushback can be expected from opponents about the economic impact of this move as well as drug companies’ concerns that list prices are a poor indicator of what patients will actually pay given all the elements involved in pricing that make this a very different issue than price transparency in other industries. Constitutionality and free speech challenges can also be expected.
3. On the campaign trail: Drug pricing and the ACA on the stump
Healthcare continues to be the centerpiece of many stump speeches in the final weeks leading up to election day. In a recent Kaiser Health Tracking Poll, a majority of the public (55 percent) said President Trump’s approach to calling out drug companies to lower costs will be “not too effective” or “not at all effective” in reducing overall prescription drug prices. That frustration over pricing has been evident as candidates, political action committees (PACs) and supporters use drug pricing as wedge issues in campaigns across the country:
- Longstanding California Democrat Anna Eshoo’s run for reelection has been challenged by the super PAC Patients For Affordable Drugs Action, which is spending $500,000 on attack ads criticizing her acceptance of campaign contributions from pharma companies and accused support of “policies that would extend drug companies’ monopolies and keep prices high.”
- The New Jersey Senate race has its own unique dynamic, with former Celgene CEO Bob Hugin (R) challenging the incumbent Sen. Bob Menendez (D), putting an interesting spotlight on how voters feel about pharma on an more individual level across the Garden State. Both Hugin and Menendez have had a hand in drug pricing decisions, whether directly from the industry side or via decisions on the Hill.
- Beyond pricing, The New York Times last week looked at how West Virginia Senator Joe Manchin’s (R) reelection bid has focused on preserving the pre-existing conditions protections from the Affordable Care Act (ACA) and the importance of Medicaid expansion, although without calling out the ACA directly. West Virginians’ strong support for the ACA, which runs deep across a state that heavily supported Trump in 2018, has made this race a bellwether of sorts.
Drug pricing in state and local races will continue to be at the forefront of debate races as we inch closer to Nov. 6. Calls for action will only intensify if the blue wave that’s been predicted does indeed occur, and Democrats regain control of one or both chambers. We’ll have eyes on the Senate HELP hearing on transparency and reducing health care costs this week as well. Needless to say healthcare watchers are in for a complex and interesting ride as we race toward 2019.
Courtney Haupt Gray is general manager, Healthcare, Washington, D.C.