• Breaking NEWS: White House Kills Proposed Medicare Part D Rebate Rule
• Federal Court Throws Out Trump Administration’s Drug List Price Requirements in TV Ads
• Fifth Circuit to Hear Arguments on TX v. Azar, DOJ Weighs In
• Trump Administration Looks to Pen “Favored Nation” Policy to Cap Drug Costs
• Study: How Seniors Might Be Paying More for Generic Specialty Drugs than Brand Drugs

Breaking NEWS: White House Kills Proposed Medicare Part D Rebate Rule

Early this morning, Axios reported that the HHS/OIG proposed rule to eliminate rebates in Medicare Part D is now dead. White House officials cited concerns with the cost to the federal government, which the Congressional Budget Office estimated to be $177 billion over the 2020-2029 period.  

Over the past several months the Public Sector HealthCare Roundtable has been extremely vocal in opposing the proposed rule by submitting comments and letters to HHS officials, as well as meeting with senior Administration staff and members of Congress, and working collaboratively with allied stakeholders. 

Thank you to all those who contributed to the efforts to voice our opposition to the proposal! 

Federal Court Throws Out Trump Administration’s Drug List Price Requirements in TV Ads

On Monday (Jul. 8), a federal court sided with drug makers and tossed out the Trump administration’s rule requiring manufacturers to disclose product list prices in television ads. Judge Amit Mehta ruled that HHS exceeded its regulatory authority by requiring manufacturers to include the list price of any drug that costs more than $35 a month in their TV ads. 

“To be clear, the court does not question HHS’ motives in adopting the WAC Disclosure Rule. Nor does it take any view on the wisdom of requiring drug companies to disclose prices. That policy very well could be an effective tool in halting the rising cost of prescription drugs. But no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized,” Mehta wrote. (InsideHealthPolicy). 

Critics of the rule have argued that the costs that would have appeared in TV ads would not have been an honest reflection of the patients’ actual costs for the drug, as many health plans lower out-of-pocket costs for patients. Seeing prices for drugs that are higher than what a patient might be able to afford could also deter them from seeking appropriate treatment or continuing treatments. In the last few months, several drug makers — including Merck, Eli Lilly and Amgen — have all sued the administration over the TV ad rule, citing that the rule was a violation of first amendment rights, in addition to other concerns.

Fifth Circuit to Hear Arguments on TX v. Azar, DOJ Weighs In

On Tuesday (Jul. 9), the Fifth Circuit Court of Appeals began hearing arguments about the constitutionality of the Affordable Care Act, as brought on by 20 state attorneys general in Texas v. Azar. The Trump administration has sided with the plaintiffs, and the court’s decision will help determine how the case should continue or conclude. The court had asked the parties in the case whether the suit has standing since the administration and the plaintiffs now agree on Obamacare’s constitutionality, but the DOJ has argued there is still a case. (InsideHealthPolicy). 

The DOJ told the Fifth Circuit Court of Appeals last Wednesday (Jul. 3) that the case stands as long as the government continues to enforce the ACA, despite the plaintiffs’ call for relief. Legal experts have argued that District Court Judge Reed O’Connor’s reasoning in his 2018 decision was “faulty and likely to be overturned by the Fifth Circuit.” (InsideHealthPolicy). 

The Fifth Circuit’s decision is likely to influence whether the Supreme Court becomes involved in the consideration of the case. The challenge to the ACA is also likely to become a major talking point for candidates heading into the 2020 presidential election. (InsideHealthPolicy).

Trump Administration Looks to Pen “Favored Nation” Policy to Cap Drug Costs

The Trump administration is in the process of writing an executive order ensuring the U.S. receives “favored nations” status in capping prescription drug prices at the lowest price paid by either a manufacturer or a developed country, the President confirmed. The policy itself is named so that no other country gets a better deal for prescription drugs from their manufacturers than the “favored nation.” 

“They’ve taken advantage of the system for a long time, pharma. So right now, we are working on a favored nations clause so that whatever the lowest nation is anywhere in the world or company…we will pay that amount,” the President confirmed to reporters last week. (InsideHealthPolicy). 

HHS has proposed an International Pricing Index Demo for Medicare Part B, and it is unclear how this executive order will affect those plans. While the President claimed that the new plan would “allow Medicare to determine the price it pays for certain drugs based on the cheaper prices paid by other nations,” last October, the administration has since declined to share additional details about the potential executive order. (InsideHealthPolicy).

Study: How Seniors Might Be Paying More for Generic Specialty Drugs than Brand Drugs

A recent study from Health Affairs found that seniors and other patients who rely on specialty drugs are more likely to pay higher out-of-pocket costs than those who pay for brand-name drugs, thanks to the coverage gap under Medicare Part D. The scenario is most common for seniors and other patients whose medications are prescribed to treat complex conditions like multiple sclerosis, rheumatoid arthritis and some forms of cancer. 

The study suggests that consumer confidence in branded drugs and manufacturer discounts in the Medicare Part D coverage gap “currently create a perverse incentive for patients to select higher-price brand-name drugs instead of their generic or biosimilar counterparts in some cases,” and that the results from previous payment policies have had adverse effects on patients’ spending. (InsideHealthPolicy). 

The authors of the study also warned that policy changes taking effect in 2020 are likely to make matters worse, as spending requirements for patient out-of-pocket costs in the catastrophic phase are set to increase almost 25%.  

The Senate Finance Committee and House Energy & Commerce and Ways & Means committees have previously announced that each are looking into alternatives to the current Medicare Part D structure. The question then becomes whether brand and generic drug makers will receive the same treatment in dealing with patients’ costs in the catastrophic phase as requirements increase. (InsideHealthPolicy).