HealthCare Roundtable e-News – February 26, 2019

Supreme Court Rejects Maryland’s Appeal to Revive Drug Pricing Law

Last week, the U.S. Supreme Court denied the state of Maryland’s appeal to restore a drug pricing law that would protect residents from “monstrous price increases” at the hands of pharmaceutical companies. The law, which was one of many state-led initiatives to tackle rising drug costs, was supported by the state’s Attorney General Brian Frosh and Health Secretary Robert Neall. 

The initial ruling was struck down by a federal court in 2018 after finding that Maryland had regulated wholesale pricing by the companies in violation of the U.S. Constitution’s commerce clause. The Association for Accessible Medicines, representing the generic lobby, claimed the law would have dictated drug prices outside of Maryland and potentially affected competition in the state if companies were scared out of the generic drug business. 

Frosh stated that he was disappointed in the court’s decision, arguing that the primary issue in the case is that Maryland “cannot protect itself from price gouging, and it leaves vulnerable people throughout our state subject to monstrous price increases by generic drug manufacturers.” 

In the meantime, state legislators have proposed the establishment of a “watchdog” group known as the Prescription Drug Affordability Board, whose primary role will be to review drug costs. Those supporting the piece legislation to establish the group argue that the state currently monitors prices set by public entities and health insurers and that doing that same for the drug industry is a necessary step.

Mixed Reactions Among Insurers, Hospitals Over Proposal to Lower Medicare Eligibility Age

A new proposal to lower the Medicare eligibility age has been unveiled by Democratic U.S. Senators. The proposal, being referred to as the “Medicare at 50 Act”, will enable early retirees and the unemployed between the ages of 50 and 64 to become eligible for buying into Medicare. 

“Millions of Americans who are approaching retirement or are being forced to retire early due to layoffs or mandatory retirement face increasing health care needs and rising costs,” the Senators said in their announcement of the legislation unveiled Wednesday. 

Others were less supportive. Health insurers expressed concerned, saying the legislation is a “slippery slope” as the proposal could lead to universal government coverage according to AHIP’s executive vice president of public affairs and strategic initiatives, David Merritt. The American Medical Association has expressed concern over how such a policy might affect the Medicare trust fund, which is set to run out by 2026. 

Several Democrats running in the 2020 Presidential campaign support the proposal, including Sens. Cory Booker (NJ), Kirsten Gillibrand (NY), Kamala Harris (Calif.) and Amy Klobuchar (Minn.)

Azar Addresses Highlights New 2018 Annual Report

Health and Human Services Secretary Alex Azar addressed the Department last Friday (Feb. 22) to mark his one-year anniversary as head of the federal agency. The speech covered some of the successes of the administration, particularly noting the rollback of Obamacare regulations, opioid abuse reductions, and responses to natural disasters and infectious diseases. (InsideHealthPolicy). 

Ahead of Azar’s address, HHS released their annual report for 2018 on the current state of the industry and Department landscape. The report highlights initiatives led by the Department and  breaks down policy implementation steps. The report also identifies goals for the rest of the term. 

“We have lofty goals,” Azar stated in the annual report. “Winning these battles will require not just innovative use of the powers and resources of government, but also enlisting all other stakeholders, whose buy-in will be necessary to create sustained and significant improvements for the people we serve.” 

The report details a few of the agency’s efforts to expand insurance options in the ACA marketplaces. The report also credits the decrease in insurance premiums–the first on record–to the agency’s efforts in facilitating the reduction.

Azar to Prioritize Lower List Prices Over Capping Seniors’ Part D Costs

In a meeting with patient advocates, HHS Secretary Alex Azar affirmed that while the administration is keen on passing caps on seniors’ out-of-pocket drug costs, the lowering of drug list prices is the first to be tackled on the administration’s list, said those familiar with the conversations. (InsideHealthPolicy). 

Sources confirm that there is at least one bill in the works to cap seniors’ Part D expenses to be introduced this session in Congress. The Reducing Existing Costs Associated with Pharmaceuticals for Seniors Act of 2016 has been supported by many Democrats, including Senate Finance Committee ranking member Ron Wyden (OR) and Sen. Minority Leader Chuck Schumer (NY). 

Senate Finance Committee Chair Chuck Grassley (R-Iowa) has stated that the issue “Has my attention,” while a spokesperson for the Senator claims he is “supportive of some of the ideas being discussed but there’s work to be done when it comes to the details.” (InsideHealthPolicy).