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.

What if the Road to Single-Payer Led Through the States?

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Source: The New York Times

As presidential hopefuls campaign on a national “Medicare for all” system, a California congressman is pushing for a different path to universal coverage: letting the states go first.

Ro Khanna, a Democratic representative, will introduce legislation Friday that lets states bundle all their health care spending — including Medicare, Medicaid, Affordable Care Act dollars and more — to fund a state-level single-payer system.

The policy could create something akin to Medicaid for all. It would be 50 separate programs, jointly funded by the state and the federal government, with local officials making decisions about whom to cover, how much to pay doctors, and what benefits to cover.

Mr. Khanna concedes that his bill will not move forward during the Trump administration, but instead sees it as laying groundwork for next year, when Democrats hope to gain control of the White House and Senate. It is also a response to recent agitations from Gov. Gavin Newsom of California, who ran on a single-payer platform in 2018 and has cited federal inflexibility as a key obstacle toward delivering on that promise.

Mr. Khanna worries that complaints about federal bureaucracy might turn out to be an excuse for politicians who like the idea of single-payer, but worry about the hard work and political enemies they’d encounter along the way.

“The reality is there are a lot of interests that don’t want the process started,” Mr. Khanna said in an interview. “I wanted to make sure that people aren’t using this as an excuse. This takes away any excuse for California to say: We can’t legislate on this issue.”

Federal rules can make it difficult for states to create single-payer systems. Medicare, for example, accounts for 20 percent of national health care spending and covers 60 million people. The federal government has full control of the program, deciding what it covers and how it pays doctors and hospitals.

The federal government also regulates a large share of private health plans, typically those provided to workers at large companies, under a set of rules known as Erisa. This means that states that want to introduce a single-payer plan would have to leave enrollees in those plans, as well as those using Medicare plans.

“It’s clear the structural hurdles are real,” said Heather Howard, a Princeton lecturer whose work focuses on state health policy. “Erisa and Medicare are the big gorillas. Until you can braid all your funding together, you’re going to be really disadvantaged.”

The Khanna legislation would try to get rid of those hurdles. It envisions a waiver that would allow states to take over the Medicare money that flows their way and combine it with funding for Medicaid, the Affordable Care Act marketplaces, the Tricare program that covers military families and funds for veterans’ health care.

A state would need to submit a plan for how it would use those funds to cover at least 95 percent of its population within five years, then cover the remaining uninsured within a decade.

“The ideal would be that we have a full country with single-payer,” Mr. Khanna said. “That is what I think either a Sanders or Warren administration would produce. But in the absence of that, it’s preferable that we have some models of a single-payer system succeeding rather than no model at all.”

What he envisions is similar to Canada’s progression toward universal coverage. It began with a single province, Saskatchewan, which started hospital insurance in 1947. Other provinces followed, and within two decades, the entire country had government-provided health coverage.

Canadian provinces retain control of their coverage programs, which means the health benefits and payment rates in, say, British Columbia vary slightly from those in Ontario.

Medicaid has a similar history. When the program began in 1966, only half the states opted to participate in the new health plan to cover low-income residents. It took more than a decade for all states to join, with Arizona signing up last in 1982.

“States vacillated but eventually they came in, because the money was good and the other states were already providing the coverage,” said Sherry Glied, dean of N.Y.U.’s graduate school of public service and a former Obama administration official.

Ms. Glied and others question whether something similar could happen today. Health prices have risen sharply since Medicaid’s creation, meaning that states would have to take on the risks of managing a large, new budget item. An expensive new drug or an economic recession would create significant risks for a state buying health coverage for all its residents.

Vermont attempted to build a single-payer system in the early 2010s but abandoned the effort after realizing the significant tax increases it would entail.

“States do get around that in all sorts of ways, but when health spending is so big, there is only so much getting around that you can do,” Ms. Glied said. “I don’t think a state can do single-payer on its own because of the need to raise so much money.”

The politics have gotten trickier, too. States like Florida and Texas that have declined the Affordable Care Act’s Medicaid expansion dollars would probably be reluctant to follow an example set by California. Then there’s the challenge of disrupting current health care programs — like telling all Medicare enrollees they have to switch to something new, when their counterparts in neighboring states get to keep the status quo.

Joel Ario worked for Gov. John Kitzhaber of Oregon as an insurance regulator in the mid-2000s, and recalls him floating an idea similar to Mr. Khanna’s: letting the state take over its share of Medicare dollars.

“The AARP was very quickly on it, telling us they weren’t comfortable with Oregon making decisions about Medicare rather than the federal government,” said Mr. Ario, now a managing partner at the health consulting firm Manatt.

California represents an interesting test case. It’s a large state with a strong single-payer movement and a willingness to spend extra state dollars to expand coverage. In July, California became the first state to subsidize Affordable Care Act coverage for some undocumented immigrants.

A single-payer bill passed through its Senate in 2017. On his first day as governor, Mr. Newsom sent a letter to the Trump administration and congressional leaders asking for permission to “reallocate funds to best meet the needs of all the state’s population.” (It went unanswered.)

Governor Newsom’s spokeswoman declined a request for an interview with her or him. “This legislation would provide states like California more flexibility and more federal funding in order to accomplish that ultimate goal,” the spokeswoman, Vicky Waters, said in a statement.

Beyond appealing to a potential Democratic administration in 2020, Mr. Khanna said, the new bill is something that could motivate liberal states to keep pressing forward on the issue.

“If California could get this right, that would be a big deal,” he said. “So what I wanted to do is make sure California can move forward, and not use the federal waiver issue as an excuse for a lack of political courage to get this done.”

Economist Who Backed Warren Healthcare Plan Has Doubts About Her Wealth Tax

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Source: Reuters

A leading economist who vouched for Democratic presidential candidate Elizabeth Warren’s healthcare reform plan told Reuters on Thursday he doubts its staggering cost can be fully covered alongside her other government programs.

Mark Zandi, chief economist at Moody’s Analytics, also voiced skepticism that the wealth tax provision in Warren’s plan – a key funding mechanism – will produce predicted levels of revenue because those targeted by the tax will seek to dodge it.

“It’s not hard to believe billionaires are going to use every resource to avoid paying the tax,” Zandi said.

Taken in isolation, Zandi said, Warren would be able to find the revenue necessary to cover the massive cost of reform. “I stand by the funding estimates, as a standalone plan,” Zandi said.

Even if the wealth tax projections fall short, Zandi believes Warren may still be able to make up the difference through other taxes in her plan, including those on corporations and employers.

Yet Zandi warned the wealth tax revenue predictions may not hold up if she also simultaneously tries to fund her proposed expansion of government programs, including free child-care and student debt forgiveness.

“I’m skeptical the wealth tax will generate the same amount of revenue after considering all her plans together,” he said.

Warren, a U.S. senator from Massachusetts, estimates her healthcare overhaul will cost an additional $20.5 trillion in federal spending over 10 years without the need to raise middle-class taxes, a claim questioned by some of her rivals in the 2020 White House race.

Zandi said despite signing a highly touted letter last week backing the calculations for Warren’s Medicare for All plan, he does not support shifting Americans off the private health insurance they have in favor of a single-payer, government-run regime.

“I am not a fan of Medicare for All,” said Zandi, who is not affiliated with any Democratic presidential campaign and does not speak for the Warren campaign. “We have 160 million people who have private insurance and are pretty happy with what they have. Why change that?”

A Warren campaign official, speaking on the condition of anonymity, said other leading economists who did not sign last week’s letter have defended the wealth tax’s revenue estimates and its enforcement mechanisms.

The official said the wealth tax will be straightforward to administer because it applies to only 75,000 ultra-wealthy families who typically already keep careful track of their wealth.

The wealth tax revenue estimates factored in significant discounts for evasion, and the plan includes measures to sharply strengthen IRS enforcement, the official said.

At a campaign stop in North Carolina on Thursday, Warren was asked to respond to criticism that her Medicare for All plan is a “pipe dream” and “fairy dust.”

Warren replied: “You don’t get what you don’t fight for.”

Zandi said he prefers the less far-reaching healthcare plan being pushed by Pete Buttigieg, the mayor of South Bend, Indiana, and one of Warren’s chief competitors for the Democratic presidential nomination.

Buttigieg’s plan is similar to other moderate Democrats’ healthcare proposals, because it does not eliminate private insurance. Instead, it seeks to set up competition between a public, government-run option and private plans to lower costs and potentially move Americans onto a Medicare for All system over time.

WEALTH TAX

A key part of Warren’s revenue calculations to pay for her healthcare overhaul comes from a new tax on the wealthiest 1% of U.S. individuals, or a “wealth tax”.

Warren initially proposed a tax that would impose a 2% federal tax on every dollar of a person’s net worth over $50 million and an additional 1% tax on every dollar in net worth over $1 billion. She upped the “billionaire’ s surcharge” to a total of 6% when she released her plan to pay for Medicare for All.

Zandi, and the other economists who signed the letter, estimated the tax would generate an extra $3 trillion in revenue between 2020 and 2029, part of $20.5 trillion they say can be generated overall through additional taxes, but without raising middle-class taxes.

Zandi said a wealth tax would be hard for the government to enforce. “There will be more avoidance and IRS enforcement may not be up to the task,” he said.

Wealth taxes have been tried in many European countries, with limited success. Many affluent people moved assets abroad and the tax resulted in far less revenues than predicted.

Betsey Stevenson, an economics professor at the University of Michigan and another of the signatories on the Warren funding letter, said Warren’s plan shows it is possible to pay for Medicare for All without raising middle class taxes.

“The point of the letter was to show whether it is possible, rather than if it is desirable,” Stevenson said.

Democrats Give Warren’s ‘Medicare for All’ Plan the Cold Shoulder

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Source: The Hill

Senate Democrats are distancing themselves from Sen. Elizabeth Warren’s (D-Mass.) “Medicare for All” plan, casting doubt on whether it could pass even if she does win the presidency.

Warren rolled out her proposal for Medicare for All last week, instantly fanning the flames of a raging debate among the Democratic presidential contenders over the idea.

But even if Warren wins the presidency and Democrats take back the Senate next year, her proposal would still face long odds of actually being enacted given objections among many senators of her own party.

Some Democratic senators on Tuesday said flatly that they would not vote for Warren’s plan if she were president in 2021.

“No, I wouldn’t; I’ve said consistently that I am not for Medicare for All,” said Sen. Doug Jones (D-Ala.), who faces a tough reelection race next year. A victory by Jones would greatly help Democrats reach a Senate majority.

Sen. Bob Menendez (D-N.J.) said “not as I understand it” when asked if he would vote for Warren’s plan.

The proposed elimination of private insurance and its trillions of dollars in tax hikes are prime reasons Democrats cite for rejecting her approach.

Many Democratic senators said they prefer an optional government-run insurance plan, known as a public option, more along the lines of what former Vice President Joe Biden and South Bend, Ind., Mayor Pete Buttigieg are proposing.

“I’m not about to take away private insurance from the union members who have worked so hard to negotiate for it,” Menendez said.

The Medicare for All legislation sponsored by Sen. Bernie Sanders (I-Vt.), a progressive rival to Warren for the Democratic presidential nomination, has support from some Democratic senators, but most are not backing it. The bill has 14 Democratic co-sponsors in addition to Sanders, out of 47 members of the Senate Democratic Conference.

Democrats must win a net gain of three seats and take the White House to gain the Senate majority in 2021, a high bar. If they do, they are expected to have a narrow majority, where only a few Senate Democrats would be enough to kill ambitious liberal proposals even if the party abolished the filibuster to allow measures to pass without Republican support.

And it is not just a handful of moderates who have concerns with Medicare for All, but many mainstream Senate Democrats.

Asked if he would vote for Warren’s plan in 2021, Sen. Ben Cardin (D-Md.) doubted it would come up for a vote at all.

“I don’t know that we’ll have a chance to do that; I think we’ll take up our own proposals,” he said. “I’m for universal coverage, I’m for building on the Affordable Care Act. My preference is to move forward on a public option.”

If Democrats controlled the Senate, he added, “I think we would look to build on the Affordable Care Act,” rather than pass Medicare for All.

Warren, a top-tier candidate now seen as a favorite to win the Iowa caucuses, sought to address concerns about Medicare for All on Friday by emphasizing that her $20.5 trillion plan would not include any middle-class tax increases. She said it would instead be funded by redirecting what employers already pay for health insurance and new taxes on the wealthy.

Warren and Sanders also emphasize that Medicare for All would expand coverage to everyone and would eliminate premiums and deductibles, providing much more generous coverage to the millions of people who struggle with high out-of-pocket costs under the current system.

Asked by a reporter in Iowa on Monday how she would get Medicare for All through the Senate, Warren said the election results would send a message.

“When I win, I will turn around to all of my Democratic colleagues and say this is what I ran on,” Warren said, according to a transcript provided by her campaign. “It’s there. And that’s what the majority of the people in the United States said they wanted.”

She acknowledged that “there have to be compromises” in Congress. “But we’ve gotta come together after this primary, we’ve gotta come together for the 2020 election,” she added. “And then, we have to deliver what we run on.”

Some Democrats fear that Medicare for All is a liability in the general election. An optional government-run plan polled better than full-scale Medicare for All in a September Kaiser Family Foundation survey, which found 69 percent support for an optional plan and 52 percent support for the full-scale government plan.

“I line up with Joe Biden. I want to make sure that the Affordable Care Act works,” said Sen. Tom Carper (D-Del.), who has endorsed Biden. “I supported a public option. I still do.”

Carper and Cardin both declined to say definitively if they would vote “no” on full-scale Medicare for All legislation if it came to a vote.

Sen. Mark Warner (D-Va.) objected to Medicare for All’s elimination of private insurance, saying there need to be “reforms to the private health care marketplace” but that “elimination of that option” is the wrong approach.

Medicare for All has more support in the House, where about half of the Democratic caucus has signed on to the leading bill.

But the top House Democrat, Speaker Nancy Pelosi (Calif.), raised concerns with the idea last week, telling Bloomberg, “I’m not a big fan of Medicare for All.”

Some Democrats think it is smarter for the party to focus on the winning message that helped the party gain back the House last year and highlight Republican efforts to repeal the Affordable Care Act. President Trump is supporting a lawsuit to overturn the entire law that is currently making its way through the courts.

“There are differences on the Democratic side about how fast to get to universal coverage, but Trump wants to take people’s health insurance away,” said Sen. Sherrod Brown (D-Ohio).

Cardin noted that a Democratic president would certainly have some sway on which way the party goes on health care, but that the ultimate decision would be up to Congress.

“That’s what’s great about the American system, the independent branches of government,” he said.

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

Image result for Elizabeth Warren’s ‘Medicare for All’ Math images

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.

Boxed In? Warren Confronts Tough Politics of Health Care

Image result for Boxed In? Warren Confronts Tough Politics of Health Care image

Source: The New York Times

For Elizabeth Warren, it was supposed to be one more big idea in a campaign built around them: a promise that everyone could get government-funded health care, following the lead of her friend and fellow White House hopeful Bernie Sanders. Instead, “Medicare for All” is posing one of the biggest challenges to the Massachusetts senator’s candidacy.

Persistent questions about whether she would raise taxes on the middle class to pay for universal health coverage have dominated her campaign in recent weeks. Warren has refused to answer, arguing that it’s more important to note that overall costs would fall for nearly everyone but large corporations and the wealthy.

That hasn’t quelled the criticism and, recognizing the push for specifics isn’t going away, Warren is promising to soon unveil details about how she would cover the costs of what would be a massive new federal entitlement. The release will test Warren’s ability to navigate the Democratic primary as she balances the demands of progressives who are open to new taxes against skepticism from moderates who say such levies would doom her in a general election.

“She’s trying to thread the needle between the electorate that wants a simple answer and the facts that she knows and that she has to live with at some point down the road,” said Jim McDermott, a former Democratic congressman from Washington state who spent most of his career trying to move a “single-payer” plan.

With the first votes just over three months away, Warren could leave many disappointed.

If she aligns with Sanders, who acknowledges taxes will have to go up, she could further alarm Democrats worried she’s pushing the party too far to the left. If she doesn’t, that could alienate progressives who may accuse her plan of not going far enough. And any combination of the two might leave virtually everyone else still confused — wondering how to make the program’s eye-popping math work.

That Warren is having to address health care questions on such starkly political terms may recall another, early campaign test she flunked: releasing the results of a DNA test last fall. Meant to quiet critics who questioned her past claims to Native American heritage, the move angered tribal leaders and energized critics like President Donald Trump who still gleefully deride Warren as “Pocahontas.”

Warren says that, far from having boxed herself in politically, she’s been working on her health care plan for months and still sees it as a winning issue. Her campaign has consulted experts, is reviewing Sanders’ funding options on universal coverage going back to his 2016 presidential run and says it will always stay true to Warren’s promises that health care costs rise for the rich and big firms while falling for “hard-working families.”

One expert Warren’s team has consulted is Robert Pollin, a University of Massachusetts Amherst economist who supports Medicare for All and has called for partially helping to pay for it using a sales tax.

“We should all pay something,” said Pollin, who is a past donor to both Warren and Sanders but declined to discuss the specifics of his conversations with Warren’s campaign. “You’re going to get health care with no premiums, no deductibles, no fear of bankruptcy if you have a health emergency.”

Warren has refused to commit to the idea of everyone paying a little. But presenting the payment specifics she’s promised means necessarily grappling with the possibility of higher overall costs for the program, since making health care free for the patient would encourage people to use more services.

Sara Collins, vice president for coverage and access with the nonpartisan Commonwealth Club, said the key involves changing how the health care tab is divided up among employers, government and individuals.

“The overall growth in spending isn’t that great, but it’s the ‘Who pays for it?’ that really changes,” said Collins, adding that costs would shift to the federal government, meaning “taxes will likely have to go up.”

More pitfalls may emerge as the Warren campaign tries to estimate Medicare for All’s cost. Since the final product would have to be approved by Congress, its contents are impossible to predict. A study released last week nonetheless estimated the government would need $2.7 trillion for Medicare for All to be fully implemented next year — more than half the current federal budget.

Sanders’ campaign estimated that the universal health coverage plan he first introduced in 2016 would cost $14 trillion over the next decade. His estimates for the current race are far higher, though he now wants to offer more coverage.

Unlike Warren, Sanders has already released payment options, including higher taxes on wealthy Americans and an employee payroll tax of 7.5%. But he’s also suggested a 4% “premium” on income that kicks in after the first $29,000 for a family of four — very much affecting the middle class.

Warren could possibly avoid that by imposing co-pay rules or limiting what’s covered. Her plan may institute payroll taxes to transfer what employers already spend on employee health care through private insurance to government-run Medicare for All. But that would give federal authorities more control over employee health costs than employers, potentially affecting jobs.

“If your plan for health care involves the perception, even if it’s not reality, that you’re going to take away something that people have worked very hard to maintain — then it would be very problematic,” said Brandon Dillon, former chairman of the Michigan Democratic Party.

Warren’s predicament is striking since she emerged as a front-runner alongside former Vice President Joe Biden by proudly “having a plan” for everything but arguably the 2020 race’s top issue. She’s also spent months deftly floating above questions about paying for her other ambitious proposals, including offering universal child care and tuition-free education at public universities while canceling existing student debt, by proposing a wealth tax on the ultra-rich. That proposal effectively became a piggy bank to cover the costs of her other promises.

The wealth tax won’t be enough to pay for Medicare for All, though. Warren’s avoidance of the middle-class tax question has helped the issue linger as a political liability — and not just in Washington political circles.

Peter Schweyer, a Democrat in Pennsylvania’s House of Representatives who is undecided in the presidential race, called pointed questions of Warren over Medicare for All during last week’s presidential debate “really good.”

“She’ll need to figure out how to respond,” Schweyer said.

Last Updated 11/13/2019

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