Drug Pricing and Surprise Billing Issues Top Health Lobbying Priorities

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Source: Modern Healthcare

Healthcare industry groups spent considerable time and money this year lobbying members of Congress on two hot-button issues: surprise billing and drug pricing. It’s likely that the debate will continue into the election year and the next Congress.

According to data from the Senate Office of Public Records, the list of the 25 biggest spenders in health lobbying as of Sept. 30 is largely composed of pharmaceutical companies and trade associations, including top spender Pharmaceutical Research and Manufacturers of America with $22.5 million in the first three quarters of 2019. Biotechnology Innovation Organization spent $9.1 million over the same period.

“Given the numerous pieces of legislation currently in front of Congress that could severely impact science and innovation, our top priorities here at BIO will continue to be protecting the environment that sustains biomedical innovation and ensuring patients have access to the medicines they need with out-of-pocket costs they can afford,” BIO spokesman Andrew Segerman said.

One measure BIO is working on is the Senate’s bipartisan, White House-backed drug pricing bill, the Prescription Drug Pricing Reduction Act. The legislation would redesign Medicare’s pharmacy benefit to shift drugmakers’ discounts to the catastrophic phase. Drugmakers overall would pay more, but companies making high-priced, innovative drugs would be disproportionately impacted by the policy. BIO is pushing lawmakers to spread drugmakers’ share of costs more evenly throughout the benefit and allow beneficiaries with high costs early in the year to spread their payments over time.

Health insurer trade association America’s Health Insurance Plans spent $7.2 million lobbying on drug pricing reform and other issues. Spokesperson Kristine Grow said that AHIP will continue to advocate for ensuring stability and choice in coverage, lowering consumer costs for prescription drugs and medical services and improving the consumer experience through better affordability, quality and use of technology.

Other top spenders in the first three quarters of 2019 were the American Medical Association with $16.1 million of lobbying spending and the American Hospital Association with $15.6 million.

Industry groups have clashed over how to address surprise medical bills. Modern Healthcare’s list of largest lobbying groups only looked at direct lobbying, so it does not include such dark money groups as Doctor Patient Unity, which has reportedly spent roughly $30 million on an advertising campaign to thwart surprise billing legislation.

There’s still a glimmer of chance that drug pricing or surprise billing legislation could pass this year, but the window of opportunity is quickly closing and impeachment proceedings further muddy the waters. Despite the complications, White House Domestic Policy Council chief Joe Grogan told reporters that he is optimistic that both surprise billing and drug pricing could be addressed by the end of 2019.

If no year-end package materializes, next year’s landscape is also challenging since little substantive legislating is typically done in an election year.

“While there aren’t a significant amount of legislative vehicles for healthcare next year, 2020 will be essential in carving out the pathway for what either party is going to prioritize in the 117th Congress,” said Shea McCarthy, senior vice president at Thorn Run Partners.

Many of the healthcare agenda items being pushed by presidential candidates are being debated in Congress. Sen. Elizabeth Warren (D-Mass.) specifically named House Speaker Nancy Pelosi’s drug pricing bill as a model for her own plan to lower drug costs through Medicare for All. Former Vice President Joe Biden said he wants to limit drug price increases to the rate of inflation, a policy included in both the major House and Senate bills. Democratic frontrunners also back importing prescription drugs from Canada, an idea that has been debated in Congress for decades and that Sen. Amy Klobuchar (D-Minn.) has championed.

Chris Holt, director of healthcare policy at the American Action Forum, said he will be watching for President Donald Trump’s messaging on prescription drug pricing during campaign season since he’s called for many of the concepts spelled out in Pelosi’s legislation.

“It will be interesting to see if you have general election candidates trying to outflank each other on the left,” Holt said.

President Donald Trump and several Democratic candidates have advocated for stopping surprise medical bills, but candidates have not yet taken sides on policy details that have so far stalled legislation on the issue in Congress.

Voters Say Congress Needs To Curb Drug Prices, But Are Lawmakers Listening?

Source: Kaiser Health News

House Democrats are poised to pass sweeping legislation to lower drug prices using strategies President Donald Trump has endorsed. A Trump aide urged the Republican-controlled Senate to vote on a different package curbing drug prices that was drafted by a senior Republican.

But at least right now, neither measure appears likely to attract enough bipartisan support to become law.

Nearly 8 in 10 Americans say the cost of prescription drugs is unreasonable, with voters from both parties agreeing that reducing the cost of prescription drugs should be one of Congress’ top priorities, according to a poll last month by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

With such broad and bipartisan support, why do the odds look grim for Congress to pass significant drug pricing legislation this year?

Because whether it’s sharing the credit for a legislative victory with the other party or running afoul of the powerful drugmaker lobby, neither Democrats nor Republicans are sure the benefits are worth the risks, according to several of those familiar with the debate on Capitol Hill.

Complications From ‘Medicare For All,’ Impeachment 

Senate Majority Leader Mitch McConnell, who is a Republican and controls what legislation gets to the Senate floor, has said he will not allow a vote on the House Democrats’ legislation. Among other things, the bill written by House Speaker Nancy Pelosi and other Democratic leaders would enable federal health officials to negotiate the prices of as many as 250 of the most costly drugs. Although Trump has endorsed that tactic, most Republican lawmakers oppose it because they are philosophically opposed to interfering with the market.

On Friday, Trump’s chief domestic policy adviser, Joe Grogan, said any drug pricing legislation would need bipartisan support, saying of Pelosi’s plan: “It is not going to pass in its current form.” He said the White House supports the bipartisan package drafted by Sen. Chuck Grassley (R-Iowa), who chairs the Finance Committee, and the committee’s top Democrat, Sen. Ron Wyden of Oregon.

But many Senate Republicans in particular are uncomfortable with one of the bill’s key provisions: a requirement that drugmakers not raise their prices on drugs covered by Medicare faster than the rate of inflation.

Asked whether the White House supports the inflation caps, Grogan said they were “not the administration’s proposal, but they are the product of a bipartisan compromise, and they are the route to a bipartisan bill, in our opinion.”

In a recent interview, Grassley spokesman Michael Zona dismissed the call from other Republicans to eliminate the provision. “There’s no need,” he said. “The bill passed with a bipartisan two-thirds majority in committee, and support’s growing for the bill every week among Republicans.”

While the Senate Finance Committee did vote 19-9 in July to send the Grassley-Wyden bill to the full Senate for consideration, some Republicans who voted to advance it cautioned then that they may not ultimately vote for the bill.

While considering the bill, all but two of the committee’s Republican members voted to kill the provision to prevent Medicare drug prices from rising faster than inflation. Grassley, however, got Democratic support and it stayed in the bill.

But it’s not clear if the bill will come to the floor. McConnell is known to be unwilling to corner Senate Republicans with votes that could be politically risky during campaign season, whether due to criticism from Democrats or pressure from the drug industry.

In addition, the push by some progressive Democratic presidential candidates for a government-controlled “Medicare for All” health system has not made it more appealing for Republicans to work with Democrats on health care issues, said Kim Monk, a health care analyst and partner at Capital Alpha Partners who used to work for Republicans in the Senate.

“Why would Republicans stick their neck out while Democrats are fighting over Medicare for All?” she asked.

And Senate Minority Leader Chuck Schumer of New York, a Democrat, has drawn a line insisting any health care legislation come with protections for those with preexisting conditions. That’s a risky conversation for Republicans, because a federal appeals court is considering a lawsuit brought by Republican states seeking to throw out the entire Affordable Care Act, which guarantees those with medical conditions can get coverage.

Still, polling suggests that the issue of drug pricing has the power to motivate voters to support one party or the other, and that is likely to motivate lawmakers.

There are more Senate Republican incumbents up for reelection next year than Democrats, and several are considered vulnerable.

Meanwhile, Democrats might be able to argue that they sought to tackle the issue of prices, but Republicans backed away from it.

The decision by House Democrats last month to pursue an impeachment inquiry against Trump has no doubt poisoned the waters between the parties. But the prospects have not looked promising anyway for a comprehensive, bipartisan package of solutions to rein in escalating drug costs.

A Third Legislative Option 

Acknowledging their problems with the Pelosi and Grassley-Wyden proposals, some Republicans are touting a modest measure that has failed to become law in the three years since it was introduced: the CREATES (Creating and Restoring Equal Access To Equivalent Samples) Act.

The CREATES Act does not take a direct approach to lowering prices. Nonetheless, based on political opposition to the larger packages, it could be some of the only drug-pricing legislation that passes this Congress. The bill would crack down on tactics used by brand-name drug manufacturers to dissuade generic competitors, aiming to eliminate anti-competitive behavior and allow the free market to bring down prices.

Specifically, it would empower generics manufacturers to sue brand-name drugmakers that block them from obtaining the samples needed to conduct studies and get Food and Drug Administration approval of their versions. It would also give the FDA more leeway to approve alternative safety protocols for high-risk drugs. Currently generic drugmakers are required to join with the brand-name manufacturers in a shared safety system for those drugs, but some brand-name companies refuse to negotiate with the generic companies, thus delaying their ability to get FDA approval.

It is the rare piece of legislation with support from the likes of progressive Sen. Sheldon Whitehouse (D-R.I.) and conservative Sen. Mike Lee (R-Utah).

But the bill has hit snags before. The brand-name drug industry trade group, the Pharmaceutical Research and Manufacturers of America, has opposed the CREATES Act in the past. With its heavy spending on lobbyists, advertisements and campaign contributions for lawmakers, it has been a powerful opponent.

Opposition softened earlier this year, though, when executives from seven of the world’s biggest drugmakers told the Senate Finance Committee they are in favor of the bill.

“We support the overall intent of the CREATES Act,” Holly Campbell, a PhRMA spokeswoman, said in an email. She added that drugmakers “should not withhold samples with the intent of delaying generic or biosimilar entry.”

Facing the prospect that Congress could fail to pass bigger fixes like the Pelosi or Grassley-Wyden plans, some say CREATES could be used to offset the cost of health care programs like community health center funding that will soon expire if Congress does not extend them.

In July, the Congressional Budget Office estimated that the CREATES Act could save the federal government $3.7 billion over 10 years.

But even some of CREATES’ supporters say it is not enough to lower drug prices.

“The idea that Congress is going to lower prescription drug prices without reforms to Medicare is nonsensical,” said Zona, Grassley’s spokesman. He added that the CREATES Act, which Grassley originally co-sponsored, is important. “But it’s only one piece of the puzzle.”

House members were home in their districts last week, and when they return, they expect to focus on passing spending bills before a Nov. 21 deadline to advert a government shutdown, before voting on Pelosi’s plan.

In the meantime, some are cautious in their predictions about whether Congress can pass significant drug pricing legislation before 2020, when the election campaign may prompt lawmakers to retreat further into their respective partisan corners.

Chip Davis, the chief executive of the generic drugmakers’ Association for Accessible Medicines, said that even though there is increasing agreement that the government needs to act to help curb drug price increases, the two parties are approaching it in very distinct ways.

“It remains to be seen,” he added, “whether those differences of opinion can be reconciled into a package that can get enough support in both chambers.”

White House Distances Itself From Pelosi Plan to Lower Drug Prices

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Source: The Hill

The White House is distancing itself from Speaker Nancy Pelosi’s (D-Calif.) plan to lower drug prices, emphasizing support for a bipartisan plan in the Senate instead.

The White House has been in talks with Pelosi’s office for months on drug prices, a rare shared priority, but the effort always faced tough odds given the partisan divide and the impeachment inquiry into President Trump.

Now the Trump administration is downplaying the chances it will endorse Pelosi’s bill, instead pointing to a somewhat more modest bill in the Senate from Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), the chairman and ranking member, respectively, of the Senate Finance Committee.

“Lines of communication remain open with the Speaker’s office, but the Grassley-Wyden proposal is the most likely solution that could advance on a bipartisan basis and achieve the President’s priority of lowering drug prices even further for all Americans,” White House spokesman Judd Deere wrote in an email.

The statement comes after White House adviser Joe Grogan made similar comments in an interview with Politico, saying he told Pelosi’s office, “I admire the ambition, but I don’t know how you’re going to get it through. It might be time to start thinking about [the Senate Finance bill].”

Congressional Republicans have denounced Pelosi’s bill as “socialist,” whereas at least some Republicans support the Grassley-Wyden bill, though many also oppose it.

But Pelosi’s bill is the only measure that allows Medicare to negotiate drug prices, something that Trump called for in his 2016 campaign before backing away from it once in office. That has led some Democrats to say Trump is breaking his promise if he does not support Pelosi’s bill.

“Trump used to insist that we needed to ‘negotiate like crazy’ to lower Rx prices,” Pelosi spokesman Henry Connelly tweeted after Grogan’s comments to Politico. “House Dems’ legislation is the only bill that includes negotiation. Instead of caving to Big Pharma, the Trump Admin should work with us to pass the Lower Drug Costs Now Act through the GOP Senate.”

Pelosi’s bill would allow the secretary of Health and Human Services to negotiate lower prices for up to 250 drugs per year, with the lower prices also applied to private insurers.

The Grassley-Wyden bill does not include negotiation, and it is centered on lowering drug prices in Medicare, in contrast to Pelosi’s bill, which would also lower prices for people with private insurance.

The Grassley-Wyden bill does require drug companies to pay money back to Medicare if their prices rise faster than inflation, though many Republicans have objected to that provision and the White House has expressed openness to taking it out.

The Eight Big Problems with Warren’s Medicare-for-All Plan

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Source: The Washington Post

Sen. Elizabeth Warren (D-Mass.) released her spending plan to finance Medicare-for-all, a single-payer health-care scheme that would eliminate private insurance. The Post reports:

—The plan is designed to hit corporations and the wealthy, including a provision requiring companies to send most of the funds they currently spend on employee health contributions to the federal government. It also expands Warren’s signature wealth tax proposal, cuts military spending and takes advantage of what she says would be significant savings from eliminating private insurance’s vast bureaucracy….

—The proposal comes on top of roughly $5 trillion in new taxes that Warren had already advocated to cover a range of new programs, including through a levy on those with more than $50 million in assets. It doubles down on Warren’s strategy of winning the Democratic nomination by consolidating support from the party’s liberal wing, rather than reaching out to more centrist Democrats.

The plan, as one would expect, was roundly criticized by former vice president Joe Biden’s campaign, which put out a statement that said it “hinges not just on a giant middle class tax hike and the elimination of all private health insurance, but also on a complete revamping of defense, immigration, and overall tax policy all at once in order to pay for it — a hard truth that underscores why candidates need to be straight with the American people about what they’re proposing.”

About the only thing all the Democratic candidates might agree upon is that this is the most sweeping proposal we have seen from any major-party candidate, one which would revamp the entire federal budget and the health care of every American.

There are (at least) eight problems she will have to contend with:

First, her plan raises a purported $20.5 trillion, around $10 trillion less than independent cost estimates for the plan from progressive groups such as the Urban Institute. Even Sen. Bernie Sanders (I-Vt.) concedes it would cost $30 trillion or more. Perhaps voters’ eyes will glaze over, and they will decide that everyone can find an economist to justify anything, but others might see the sort of standard sleight of hand — trillions in administrative savings! stronger tax enforcement! — as confirmation that it really is impossible to come up with a plan this extensive and not further burden the middle class.

Moderate Sen. Michael Bennet (D-Colo.) blasted Warren’s plan in a written statement. “Voters are sick and tired of politicians promising them things that they know they can’t deliver,” he said. “Warren’s new numbers are simply not believable, and have been contradicted by experts. Regardless of whether it’s $21 trillion or $31 trillion, this isn’t going to happen, and the American people need health care.”

Second, there is not much of a justification as to why we need this when Affordable Care Act premiums are decreasing and other issues (e.g. extending coverage, premium costs) can be addressed through much cheaper proposals, such as the public option. (As Biden’s campaign put it, “Most voters want to protect and strengthen the Affordable Care Act.”)

Third, it is pretty clear to all but the horribly naive that this is never going to happen. An $800 billion cut in defense? What’s the justification for that, and what national security concerns does it raise? What moderate Democrat is going to sign on to this? The bigger and more complicated it is, the more obvious it becomes a fantasy — one that could prevent more modest and achievable ends such as prescription drug cost containment. Warren is relying, for example, on a wholesale immigration reform plan (something that frankly does not seem politically attainable) to generate hundreds of billions of dollars (above and beyond revenue going to state and local governments). At some point, this fails the straight-face test.

Fourth, eliminating all private insurance has real-world impacts on health-care providers. The New York Times reports: “Ms. Warren’s plan would put substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies. … Payments to hospitals would be 10 percent higher on average than what Medicare pays now, a rate that would make some hospitals whole but would lead to big reductions for others. She would reduce doctors’ pay to the prices Medicare pays now, with additional reductions for specialists, and small increases to doctors who provide primary care.” Do rural hospitals survive by protecting against the uninsured or go bust without the much higher reimbursement rates that private insurers provide? If doctors’ salaries get chopped, how will this affect time with patients and the availability of specialists?

Fifth, her proposal tests the limits of her electability argument. The Times observes: “Although she is not proposing broad tax increases on individuals, her proposal will still allow Republicans to portray her as a tax-and-spend liberal who wants to dramatically expand the role of the federal government while abolishing private health insurance. Her plan’s $20.5 trillion price tag is equal to roughly one-third of what the federal government is currently projected to spend over the next decade in total.” Simply put, this really is the sort of plan President Trump would use to scare voters into sticking with him rather than plunging into a “socialist” abyss.

Sixth, Warren winds up handing the health-care issue right back to the Republicans. Andy Slavitt, who headed the Medicare and Medicaid trust funds under President Barack Obama, tells me: “In my view, 90 percent of the Democratic focus on health care should be on Trump’s lawsuit and his other plans to get rid of the ACA and pre-existing condition protections.” He suggests, “The other 10 percent can be on policy differences between the candidates on how they would ideally make universal coverage happen.” He warns, “Doing the reverse is like spending 90 percent of the time on environmental issues debating the Paris Accord vs. the Green New Deal instead of spending 90 percent of the time remembering they are running against a climate denier.”

Seventh, Warren doesn’t seem to consider the downsides from slashed reimbursement (nurses pay?), elimination of private insurance companies (jobs for all those white-collar workers?) and/or mammoth tax hikes (growth? jobs?). This embodies one of the major criticisms of the super-progressive wing of the Democratic Party: blind faith in centralized federal government with little or no regard for unintended consequences.

Eighth, the plan does damage to her brand. Warren’s plan is a reminder of how far to the left of the rest of the field she really is. The notion that she is a “compromise” between Sanders and center-left candidates will be harder to sustain. Moreover, she was supposed to be the straight-shooter, the candid progressive who could tip the scales in favor of working-class Americans. There are plenty of voters (including more moderate African American voters with whom she has struggled to connect) who might regard this as akin to Trump’s magical health-care plan (better! cheaper!) or other snake oil peddled by politicians. People have become a bit too savvy to think you can have everything for nothing.

Warren will have ample opportunity to defend her plan at the next debate. In the meantime, Democratic voters can mull over whether this makes it easier or harder to defeat Trump.

Elizabeth Warren’s ‘Medicare for All’ Math

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Source: The New York Times

She thinks a single-payer health care system can save more than other analysts think. Here’s where she says she’ll get the money to pay for it.

Elizabeth Warren’s “Medicare for all” proposal would make substantial shifts to how the United States pays for its health care system. She would eliminate most other forms of coverage, including private insurance, and provide all Americans with a generous government-run plan.

To calculate its cost, she has modified estimates from the Urban Institute, a Washington research group that has assessed the legislative proposal she is endorsing.

To pay for it, she has proposed large new taxes, transfer payments and some cuts to government spending. Altogether, her campaign believes health spending under Medicare for all will cost $52 trillion over the next decade, with about half shifting from other sources onto the federal budget.

The Warren plan includes several key assumptions, including starkly lower prescription drug prices, minimal administrative spending and health care costs that grow at a significantly slower pace.

Warren backers describe these cuts as ambitious and assertive, contending that the American health system — which has the highest prices in the developed world — could weather the change. Other health care experts call the ideas unrealistic, given the revenue that American doctors, hospitals and drug companies have become accustomed to earning.

The key question in this debate is, how quickly can the United States tamp down its sky-high health care prices?

“The whole point of this analysis, which took weeks and was done with real discipline, was to come up with, what is realistic?” said Don Berwick, a co-author of an economic analysis of the Warren plan, and former administrator of the Centers for Medicare and Medicaid under President Barack Obama. “I think they’re achievable and, for those who are critical, please show me yours.”

Here’s a summary of what Ms. Warren has proposed on either side of the ledger.

To reduce the plan’s costs:

• Change the way Medicare pays for certain types of hospital stays, such as paying a package rate rather than different fees for surgical services, and paying doctors in hospital-owned practices the lower prices paid to those in private practices. ($2.3 trillion)

• Assume that the Medicare for all program itself can operate very leanly. The Urban Institute estimated that Medicare would devote about 6 percent of its health budget on administrators to decide what and how Medicare would pay for things, and to prevent fraud. In Ms. Warren’s plan, that rate is 2.3 percent. ($1.8 trillion)

• Assume very aggressive drug discounts. Ms. Warren believes a government system will be able to reduce spending on drugs substantially, including lowering the prices of branded prescription drugs by 70 percent. ($1.7 trillion)

• Assume slower growth in health spending over time. The federal government now thinks health spending will increase by 5.5 percent a year; the Warren campaign assumes 3.9 percent growth under Medicare for all, closer to the rate of growth in gross domestic product. ($1.1 trillion)

• Assume lower payments to hospitals. The campaign believes hospitals can be paid around 110 percent of what they are currently paid by Medicare, a number that would cause some hospitals to operate at a loss. Currently, private health insurers often pay a lot more to hospitals than Medicare for similar procedures. ($600 billion)

To pay for the plan:

• Employers would be required to pay fees to the federal government, equivalent to 98 percent of what they now spend on their employees’ health care. Some companies would be exempt, and companies with unionized work forces would be able to lower this payment if they increased workers’ wages. Currently, companies vary greatly in the cost and generosity of their health benefits, so this fee would vary substantially by firm. ($8.8 trillion)

• States and local governments would be required to make payments to the federal government, similar to what they currently spend on government employee benefits and their share of Medicaid expenses. ($6.1 trillion)

• Corporate taxation would be increased. ($2.9 trillion)

• Tax collections would increase through improvements to I.R.S. enforcement, which Ms. Warren believes could raise a lot of money. ($2.3 trillion)

• The top 1 percent of individual earners would pay new taxes on their capital gains; they would pay taxes on increases in investment value annually, instead of waiting until assets are sold. ($2 trillion)

• Income tax collections would increase, since workers would no longer pay part of their salaries for insurance premiums, which are not taxed now. ($1.4 trillion)

• Billionaires would pay a higher wealth tax than the rate Ms. Warren has previously proposed: 6 percent, up from 3 percent. ($1 trillion)

• A new financial transactions tax would be imposed on stock trades. ($800 billion)

• Pentagon spending from an overseas contingency fund, often criticized as a slush fund, would be eliminated. ($800 billion)

• Income earned by immigrants, following the passage of her immigration overhaul plan, would provide new tax revenues. ($400 billion)

• A risk fee on the liabilities of banks with more than $50 billion in assets would be introduced. ($100 billion)

Drug Companies Spend Millions on Lobbying as Congress Tries to Rein in High Drug Prices

Image result for Drug Companies Spend Millions on Lobbying as Congress Tries to Rein in High Drug Prices imageSource: The Hill

Prescription drug companies and trade groups shelled out millions of dollars to lobby Congress as it considered legislation aimed at reining in skyrocketing drug prices, according to new lobbying disclosure reports.

The Pharmaceutical Research and Manufacturers of America (PhRMA) — the trade group representing branded drug companies — spent $6.2 million on lobbying in the third quarter of 2019, which ran from July through the end of September.

That’s $240,000 more than it spent during the same time frame last year.

Bipartisan members of Congress have worked all year on proposals aimed at curbing rising drug prices as polls show voters are increasingly worried about the issue.

PhRMA lobbied on dozens of bills related to the industry, according to the reports, including one proposed by Speaker Nancy Pelosi (D-Calif.) that would let the government negotiate the prices it pays for prescription drugs through Medicare.

The industry has pushed back fiercely on the proposal, calling it government “price-setting” that would kill drug innovation.

Prescription drug companies have also sharply increased their lobbying amid a flurry of legislation targeting the industry.

Gilead, the maker of HIV drug Truvada, spent $1.5 million on its lobbying efforts in the third quarter of 2019, a 117 percent increase over what it spent during the same time frame last year.

Gilead has faced criticism for pricing Truvada at about $20,000 a year.

Several drug companies, including Amgen and Bayer, also lobbied on bills that would allow the importation of cheaper drugs from other countries, a proposal that is opposed by the industry.

Amgen, whose drugs treat chronic illnesses, spent $3 million in the third quarter, a 16 percent increase over what it spent in the same time frame last year.

Meanwhile, Bayer, the maker of a top-selling prescription blood thinner, spent $2 million on lobbying in the third quarter, a 32 percent increase over what it spent during the same time frame last year.

Drug companies, including AbbVie, are also lobbying on a proposal from the Trump administration that would tie what the U.S. pays for drugs to what other countries pay.

AbbVie spent $1.8 million on lobbying in the third quarter of 2019, a nearly 200 percent increase from what it spent in the same time frame last year.

Sanofi, which has been under fire over the rising costs of insulin, spent $1.7 million on lobbying in the third quarter, an increase of 105 percent from what it spent during the same time frame last year.

Some drug companies decreased the amount they spent on lobbying.

Pfizer spent $1.6 million in the third quarter, compared to the $2.9 million it spent in the same time frame last year.

Meanwhile, Eli Lilly spent $1.4 million on lobbying in the third quarter, a drop of $560,000 from the same time frame last year.

Humana Files Suit Against Generic Drug Makers, Alleges Price Fixing

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Source: FierceHealthcare

Humana filed suit Friday against more than a dozen generic drugmakers, including Teva Pharmaceuticals, alleging the companies engage in price fixing.

In the 610-page complaint, which was filed in the Eastern District of Pennsylvania, Humana says it wants to recover “egregious overcharges” it paid to cover certain common generic drugs. The insurer lists dozens of drugs in the complaint the prices of which it claims drug companies schemed to fix.

The price-fixing “conspiracy,” Humana said in the suit, “infected the entire generic marketplace.” Prices for some drugs increased by as much as 1,000%, the insurer said.

Among some of the drugs listed in the suit are albuterol sulfate, which is used to treat asthma and bronchitis, and tamoxifen citrate, which is used to prevent and treat breast cancer. Both are listed among the World Health Organization’s essential medicines.

Humana also listed bumetanide, a diuretic used to treat swelling as a result of heart failure, liver failure or kidney problems and warfarin sodium, an anticoagulant used to treat blood clots such as deep vein thrombosis and pulmonary embolism.

Humana levels some of the largest accusations in the complaint at Teva, which by 2012 was engaging in “the most egregious and massive price-fixing conspiracies in the history of the United States,” the insurer said.

Teva would select certain other competitors, and these drugmakers agreed to follow one another on price increases, Humana said.

“They leveraged the culture of cronyism in the generic drug industry to avoid price erosion, increase prices for targeted products, and maintain artificially inflated prices across their respective product portfolios without triggering a ‘fight to the bottom’ among competitors,” Humana said.

At the peak of the scheme, between July 2013 and January 2015, Teva raised the price on “dozens” of generic drugs, many in collaboration with the other conspiring companies, Humana claims.

Pricing-fixing schemes like this are under investigation by both the Department of Justice and just about every state across the country. Humana noted. The insurer filed a similar, less extensive lawsuit in August.

Pelosi Drug Plan Saves $345B but Could Reduce Flow of New Drugs

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Source: FierceHealthcare

House Speaker Nancy Pelosi’s drug prices plan would reduce Medicare spending by $345 billion over a seven-year period but could also impact the number of new drugs entering the market, according to an analysis from the Congressional Budget Office.

The analysis centers only on how the bill, which gives Medicare the power to negotiate lower drug prices, will save money on Medicare Part D. The bill would enable Medicare to negotiate for a lower drug price that is 120 times an average paid by other countries.

“The largest savings would come from the lower prices for existing drugs that are sold internationally, for which the price ceiling would be binding in most but not all cases,” said the CBO analysis, which was released late Friday.

Pelosi’s plan would also require drug companies to offer the negotiated Medicare price to commercial plans.

While CBO acknowledges that the bill could force drug companies to pull out of the U.S. market entirely, the nonpartisan congressional scorekeeper speculated that would be unlikely for all drugs being sold in the U.S.

“Manufacturers would initially set list prices of some new drugs in the U.S. higher than under existing law, although the net prices paid by consumers over time could be lower in many cases,” the CBO said.

However, CBO also estimates that any cut in manufacturer revenue “would result in lower spending on research and development and thus reduce the introduction of new drugs.”

That estimate would be welcome news to the pharmaceutical industry, which has said that Pelosi’s bill would stifle innovation. Impact on R&D funding is a common defense the industry uses to attack drug pricing policies.

CBO’s preliminary estimate said that a reduction in revenue of $500 billion to $1 trillion “would lead to a reduction of approximately eight to 15 new drugs entering the market the next 10 years.”

The Food and Drug Administration on average approves about 30 new drugs a year, so CBO estimates that about 300 drugs might be approved over the next 10 years.

“The overall effect on health of families in the United States that would stem from increased use of prescription drugs but decreased availability of new drugs is unclear,” the agency added.

It remains unclear whether Pelosi’s bill would make it through Congress. Lawmakers return from a two-week recess on Tuesday and a top Pelosi health aide has said he expects the bill to be voted on by the end of the month.

But the bill is likely to face a steep challenge in the GOP-controlled Senate, where Majority Leader Mitch McConnell has called it a Socialist proposal.

However, President Trump has previously shown a desire to let Medicare negotiate drug prices and his administration has issued a proposal that would tie the prices for certain Medicare Part B drugs to those paid by other countries.

California’s New Transparency Law Reveals Steep Rise In Wholesale Drug Prices

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Source: California Healthline

Drugmakers fought hard against California’s groundbreaking drug price transparency law, passed in 2017. Now, state health officials have released their first report on the price hikes those drug companies sought to shield.

Pharmaceutical companies raised the “wholesale acquisition cost” of their drugs — the list price for wholesalers without discounts or rebates — by a median of 25.8% from 2017 through the first quarter of 2019, according to the Office of Statewide Health Planning and Development. (The median is a value at the midpoint of data distribution.)

Generic drugs saw the largest median increase of 37.6% during that time. By comparison, the annual inflation rate during the period was 2%.

Several drugs stood out for far heftier price increases: The cost of a generic liquid version of Prozac, for example, rose from $9 to $69 in just the first quarter of 2019, an increase of 667%. Guanfacine, a generic medication for attention deficit hyperactivity disorder (ADHD), on the market since 2010, rose more than 200% in the first quarter of 2019 to $87 for 100 2-milligram pills. Amneal Pharmaceuticals, which makes Guanfacine, cited “manufacturing costs” and “market conditions” as reasons for the price hike.

“Even at a time when there is a microscope on this industry, they’re going ahead with drug price increases for hundreds of drugs well above the rate of inflation,” said Anthony Wright, executive director of the California advocacy group Health Access.

The national debate over exorbitant prescription drug prices — and how to relieve them — was supposed to take center stage in recent weeks, as House Speaker Nancy Pelosi released a plan to negotiate prices for as many as 250 name-brand drugs, including high-priced insulin, for Medicare beneficiaries. Another plan under consideration in the Senate would set a maximum out-of-pocket cost for prescription drugs for Medicare patients and penalize drug companies if prices rose faster than inflation.

President Donald Trump has highlighted drug prices as an issue in his reelection campaign. But lawmakers’ efforts to hammer out legislation are likely to be overshadowed, for now, by presidential impeachment proceedings. In Nevada, health officials in early October fined companies $17 million for failing to comply with the state’s two-year-old transparency law requiring diabetes drug manufacturers to disclose detailed financial and pricing information.

California’s new drug law requires companies to report drug price increases quarterly. Only companies that met certain standards — they raised the price of a drug within the first quarter and the price had risen by at least 16% since January 2017 — had to submit data. The companies that met the standards were required to provide pricing data for the previous five years. In its initial report, the state focused its analysis on drug-pricing trends for about 1,000 products from January 2017 through March 2019.

California’s transparency law also requires drugmakers to state why they are raising prices. Over time, that information, in addition to cost disclosures, could create “one of the more comprehensive and official drug databases on prices that we have nationwide,” Wright said. “That, in itself, is progress, so that we can get better information on the rationale for drug price increases.”

But the data does not reflect discounts and rebates for insurers and pharmacy benefit managers and bears little resemblance to what consumers actually pay, said Priscilla VanderVeer, a spokeswoman for the trade group Pharmaceutical Research and Manufacturers of America. The group filed a lawsuit seeking to overturn the California legislation that has not yet been resolved.

“If transparency legislation only looks at one part of the pharmaceutical supply chain, without getting into the various middlemen like insurers and pharmacy benefit managers that ultimately determine what patients have to pay at the pharmacy counter, it won’t help patients access or afford their medicines,” VanderVeer said in an email.

State Sen. Richard Pan (D-Sacramento), a pediatrician who chairs the Senate health committee, agrees — up to a point.

“Transparency always has value,” Pan said. But policymakers need more data on how much insurers and consumers are spending on prescription drugs, he said.

And he wonders why the price of generic drugs, including those with plenty of competition, rose at higher rates.

His concerns were echoed by University of Southern California policy researchers, who recently published a study that concluded most state-level drug-transparency laws are “insufficient” to reveal the true transaction prices for prescription drugs, or where in the distribution system excessive profits lie.

“The question is, why are these prices going up? Typically, there are competing stories for that,” said Neeraj Sood, vice dean of the University of Southern California’s School of Public Policy and an author of the study. “Maybe cost of production is going up,” he said. “Maybe there’s a drug shortage, or some competitors got eliminated. This reporting of [wholesale acquisition cost] data doesn’t really tell us which of these stories is true.”

For now, California’s new data is not likely to be of much help to consumers, Pan said. But he said it might help state officials in their bid to overhaul the way the state purchases drugs for 13 million people served by Medi-Cal, the state’s Medicaid program for low-income residents. Gov. Gavin Newsom’s controversial plan to have the state, rather than individual Medi-Cal managed-care plans, negotiate directly with drugmakers would save the state an estimated $393 million a year by 2023, according to the administration.

Governor Newsom Signs AB 824 to Lower Prescription Drug Costs in First Health Care Bill Signing Event

Source: Health Access

California Governor Gavin Newsom today signed the biggest prescription drug price bill of the year, intended to lower prescription drug prices for California consumers by hundreds of millions of dollars a year. During the first-ever health care bill signing event under the new Administration, Newsom signed AB 824, authored by Assemblymember Wood and sponsored by Attorney General Xavier Becerra, to deter harmful “pay-for-delay” practices by pharmaceutical and generic drug manufacturers.

Health Access was proud to join Governor Newsom for the bill’s signing, along with many of the health, consumer, senior, labor, and other groups that supported the bill throughout the legislative session, which together overcame well-financed opposition from prescription drug companies which sought to weaken the legislation.

With Governor Newsom’s signing of AB 824, anti-competitive “pay-for-delay” practices by prescription drug companies will be under greater scrutiny. These harmful “pay-for-delay” deals occur when brand name pharmaceutical companies pay generic drug makers to slow down or stop lower-cost alternative medications from entering the marketplace. While this drives up profits for drug companies, consumers were being left to pay artificially high prescription drug costs. In 2010, the Federal Trade Commission estimated Americans pay $3.5 billion a year more for medications because of these “pay-for-delay” practices, and that figure has likely gone up significantly since that finding.

By signing AB 824, California consumers will see lower price alternatives come to the market sooner, easing the burden on people who need these medications to survive. It will be that much harder for brand-name and generic drug companies to engage in shady back-room deals that drive up their profit in secret, at the expense of consumers.

Governor Newsom’s signature also puts California at the forefront of efforts to prevent the problematic, price-gouging practices by prescription drug companies, and will hopefully provide momentum for further action that is desperately needed at the federal level. Consumers ultimately need Congress to act to lower drug prices for Americans, but California is leading the way.

The bill will go into effect on January 1, 2020.

Last Updated 11/13/2019

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