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Who’s going to be portrayed as the big, bad wolf when President Trump is expected to deliver a major speech on drug costs later this week? Drugmakers, pharmacy middlemen and insurers are all determined it won’t be them – and in case it is, they’re readying their defenses.
Industry insiders say Trump’s twice-delayed speech may take place Friday, although the White House hasn’t confirmed that. When it does happen, get ready for plenty of intra-industry finger-pointing as the president gives his take on the country’s unprecedented spending on prescription drugs and how to make medicines more affordable for Americans.
Hoping to avoid harsh crackdowns from lawmakers and policymakers, the drug industry is saying that insurers should kick in more to lower seniors’ costs by passing along Medicare drug rebates. Alarmed by that idea, insurers are pointing the finger at pharmaceutical companies for hiking the base price of medications.
And the trade group representing pharmacy benefit managers (PBMs) is going for a total PR makeover, fearful its members — as the middlemen between insurers and drugmakers — are being increasingly demonized for fueling price hikes. Mark Merritt, president of the Pharmaceutical Care Management Association [PCMA], announced yesterday he’s stepping down at the end of the year — a move sources say reflects members’ dissatisfaction with how they’re being portrayed in the debate over high drug prices.
“I think what you should expect going forward is an industry and PCMA that’s more aggressive, more active in the drug pricing debate at the federal and state levels, which hasn’t necessarily been a strength in the past,” a source familiar with group’s board discussions told me.
All these parties are paying close attention to what Trump will say because they play crucial roles in how the prices of drugs are set in the United States, which has a more complicated drug supply chain than in many other developed nations.
A quick and very simplified summary: As companies set increasingly high list prices, they're essentially paying PBMs to include their drugs in insurers’ benefits in return for a rebate. Larger rebates mean more money for insurers and PBMs to pocket — which prompts everyone to push list prices higher and higher.
We don’t know precisely what Trump will say about all this. But Seema Verma, his appointee running the Centers for Medicare and Medicaid Services, gave a hint yesterday that might send a shiver down the spines of PBMs. Verma called the system of rebates “convoluted” since it’s unclear with whom PBMs are actually aligned.
“The bottom line is that all of the incentives are lined up for the manufacturers to set higher and higher prices,” Verma said in a speech to the American Hospital Association.
Verma tweeted this, too:
However, with PBMs serving BOTH the manufacturer and the plan, all the incentives are lined up for manufacturers to set higher & higher prices. As prices go up, the manufacturer, the plan & the PBM all win EXCEPT the patient. #AHAmtg— Administrator Seema Verma (@SeemaCMS) May 7, 2018
Shares of two of the country’s three largest PBMs slipped yesterday after Verma’s comments. By noon, CVS shares had dropped 2.7 percent and shares for Express Scripts were down as much as 1.6 percent, per Bloomberg News.
As for the drugmakers — represented by the powerful Pharmaceutical Research and Manufacturers of America — they’re bulking up their defense strategy, as the New York Times’s Robert Pear details in this interesting read. The industry far outspent anyone in lobbying the federal government last year, pouring $171.5 million into the effort, according to data compiled by the Center for Responsive Politics.
The center also found that drug companies and PhRMA together employed 882 lobbyists, two-thirds of whom formerly worked for Congress or federal agencies. And PhRMA has deployed a series of ads — part of its “Go Boldly” campaign — touting the innovative but expensive medicines its members have developed in recent years.
PhRMA and generic-drug developers hope desperately that Trump won’t propose allowing the government to start negotiating lower prices with Medicare Part D drug benefit plans, an idea The Health 202 recently detailed. When I asked the group’s president, Steve Ubl, last week what he fears hearing from Trump, Ubl said he believes the president and drugmakers have fundamentally similar aims.
“I think we do have the same shared goal, which is improving patient affordability on the one hand while still preserving future incentives for innovation,” Ubl said.
Instead of just discussing what it opposes, the industry is also trying to highlight a policy change it does support — requiring insurers to pass along rebates directly to seniors.
“Our interest in this proposal is trying to figure out a way to help patients afford their medicines at the pharmacy counter,” Lisa Joldersma, PhRMA’s senior vice president for policy and research, told reporters.
This is an idea Trump proposed in his February budget and one the drug industry says could save the federal government anywhere from $8 billion to $73 billion over a decade if behavioral changes are taken into account. Instead of pocketing part of the drug rebates, insurers selling Part D plans would have to pass on at least one-third of the sum to enrollees at the point of sale.
Last year, PhRMA launched a series of ads called “Share the Savings,” urging more commercial insurers to take this step to lower the prices patients pay for their medications.
But this policy pits drugmakers against insurers, who hate the idea of being required to forfeit more of their rebates. They’re not at all pleased that CMS is examining such a policy via its request last November for information to gather comments on the idea.
Matt Eyles, incoming president of America’s Health Insurance Plans, wrote to CMS that the plan would raise costs for most seniors because insurers would pass them directly to only the sickest consumers, instead of spreading around the savings to lower premiums for everyone.
“Contrary to CMS’s bigger goal, the agency’s proposal … would in fact raise costs for most Medicare beneficiaries,” Eyles wrote.
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— As Trump gears up for his drug speech, Democrats are trying to take back the issue on the campaign trail, The Post's Erica Werner and Carolyn Y. Johnson report. Democrats are pushing proposals they hope will compare favorably to Trump’s and give them the upper hand on an issue polls consistently rank as among voters’ top concerns.
For example, they focused on drug prices in their “Better Deal” agenda if they take control of Congress, including a proposal to let Medicare use its buying power to bargain down the cost of medications. Trump had taken the unusual step for a Republican of embracing the proposal during his 2016 campaign, telling an enthusiastic crowd in New Hampshire that it could unlock huge savings. But the president hasn’t followed through or endorsed the idea when Democrats have proposed it.
“Democrats are also promising to appoint a 'price gouging' enforcer who would fine drug companies if their price increases surpass certain thresholds — another piece they believe will show voters that Democrats are prepared to tackle the issue in a way Trump hasn’t,” Erica and Carolyn write. “There’s no question that it provides an opening for us,” top House Ways and Means Democrat Richard Neal (Mass.) told them.
— Trump is sending a plan to Congress that calls for stripping more than $15 billion in previously approved spending, hoping it will temper conservative angst over ballooning budget deficits, Erica and our colleague Damian Paletta report. Almost half the proposed cuts would come from two accounts within the Children’s Health Insurance Program, while an additional $800 million in cuts would come from money created by the Affordable Care Act to test innovative payment and service delivery models.
“Those are just a handful of the more than 30 programs the White House is proposing to Congress for 'rescission,' a process of culling back money that was previously authorized,” Erica and Damian explain. “Once the White House sends the request to Congress, lawmakers have 45 days to vote on the plan or a scaled-back version of it through a simple majority vote. If approved by Congress, the reductions would represent less than 0.4 percent of total government spending this year.”
AHH: Walmart announced it will provide no more than a seven-day supply of first-time acute opioid prescriptions to some customers and will limit dosages to 50 morphine milligram equivalents a day. The stricter opioid policy will be implemented at more than 5,300 Walmart and Sam’s Club locations in the United States within 60 days, CNN Money’s Danielle Wiener-Bronner reports.
The company also said it will try to prevent prescription fraud by requiring e-prescriptions for controlled substances starting in 2020. The new policy announcements follow a recent CDC recommendation. “A CDC study found that people who were prescribed at least one day of opioid therapy had a 6% chance of being addicted a year later — but for those prescribed eight or more days of treatment saw that chance spiked to 13.5%,” Danielle writes. “The CDC also notes that patients who are prescribed higher dosages are more likely to die from an overdose.”
The latest policies follow other moves the company has taken to combat the opioid crisis. In January, Walmart announced it would provide customers with DisposeRx when filling opioid prescriptions, a powder that would help in safely disposing leftover medications.
OOF: Maryland’s Obamacare insurers are proposing an average 30 percent increase in premiums for the individual health-plan markets for 2019, our colleague Carolyn Y. Johnson reports. CareFirst BlueCross BlueShield requested an 18.5 percent increase to HMO plans used by most individual plan members, and a massive 91.4 percent increase on its PPO plans. Kaiser Permanente proposed a 37.4 percent increase on HMO plans.
“We are at a place in the individual market where any increase at all creates stress in the marketplace,” Maryland’s health insurance commissioner Alfred Redmer Jr. said. CareFirst chief executive Chet Burrell told Carolyn insurers all over are struggling with an expensive marketplace population. “We have had major, major losses, and the reason for that is the rates — as high as they have been and as steeply as they have increased — have simply not kept up with how costly it is to take care of the population,” Burrell said. “We're not alone in this experience.”
Carolyn notes the rates aren't final. “The rate requests are an early sign of the trends in the individual marketplace, but they are only the first step toward determining 2019 premiums, which will be subject to review," she writes.
OUCH: As Sen. John McCain recovers from surgery for an intestinal infection and undergoes treatment for brain cancer, he has mostly been receiving a stream of well wishes and tributes for his long career in public service -- but not from Trump's staunch defenders, The Post's Eugene Scott writes.
In his new memoir to be released later this month, the Arizona Republican offers a harsh assessment of Trump’s leadership and says he feels less constrained to share his thoughts because he is not seeking reelection. Writing that the president “has declined to distinguish the actions of our government from the crimes of despotic ones," McCain adds that Trump's "appearance of toughness, or a reality show facsimile of toughness, seems to matter more than any of our values." According to NBC News, McCain's 2008 campaign rival, former president Barack Obama, will eulogize him, and McCain doesn't even want Trump in the building.
"This deepening rejection of Trump — and embrace of Obama — was not well received by many of Trump's most vocal supporters," Eugene writes. "Criticism of McCain has abounded on social media, with Trump defenders calling him a Democrat and an 'embarrassment to our country,' and attacking his character in other ways."
Just one example, from conservative author and filmmaker Dinesh D'Souza:
What’s this craziness about @realDonaldTrump not making the list? Is John McCain actually sending out invites to his own funeral?— Dinesh D'Souza (@DineshDSouza) May 6, 2018
— CMS Administrator Verma announced yesterday the agency will reject Kansas’s request to limit people to three years of Medicaid coverage over their lifetime. The state had proposed Medicaid beneficiaries be allowed to remain under the KanCare Medicaid program for a three year maximum before being dropped.
Verma said the agency is determined to make sure Medicaid remains the safety net for those that need it most. "To that end, we have determined we will not approve Kansas' recent request to place a lifetime limit on Medicaid benefits," Verma said as part of her speech to the AHA. "We seek to create a pathway out of poverty, but we also understand that people’s circumstances change, and we must ensure that our programs are sustainable and available to them when they need and qualify for them."
The Kansas decision is a significant signal from the Trump administration as to how far it will or won't allow states to go in putting more fences around their Medicaid programs. The state's push for lifetime limits is the first such proposal the administration has rejected, although other states including Arizona, Utah and Maine have made similar requests.
— Yesterday, First Lady Melania Trump announced her new “Be Best” campaign to bring attention to childhood well-being, social media use and opioid abuse. “I feel strongly that as adults, we can and should ‘be best’ at educating our children about the importance of a healthy and balanced life," Melania said at her launch in the Rose Garden.
“As a mother and as first lady, it concerns me that in today’s fast-paced and ever-connected world, children can be less prepared to express or manage their emotions and oftentimes turn to forms of destructive or addictive behavior such as bullying, drug addiction or even suicide,” she added.
Vice President Pence, Karen Pence, Ivanka Trump, senior adviser Jared Kushner, Education Secretary Betsy DeVos, and senior counselor Kellyanne Conway were among the administration officials at the event, our colleague Mary Jordan reports. And President Trump, who sat in the front row during Melania’s speech, embraced his wife and praised her during the event.
“Melania Trump has talked about the need to combat cyberbullying before and formalized those efforts as part of her ‘Be Best’ campaign,” Mary writes. “Her decision to address cyberbullying has drawn considerable attention because her husband flings insults and taunting tweets, and he has been blamed by many people for fanning a divisive online conversation.”
— A few more good reads from The Post and beyond:
- The American Hospital Association’s annual membership meeting continues.
- The House Energy and Commerce Oversight and Investigations Subcommittee holds a hearing about the opioid epidemic.
- The House Judiciary Committee holds a hearing on the opioid crisis.
- The House Ways and Means Committee holds a hearing on the Medicare Advantage Program.
- The House Veterans’ Affairs Subcommittee on Oversight and Investigation holds a hearing on VA logistics modernization.
- The House Energy and Commerce Health Subcommittee holds a hearing on substance use disorder treatment.
- The Bipartisan Policy Center holds an event on federal science funding.
- The Coalition for Life Sciences holds an event on medical marijuana.
- The House Oversight Subcommittees on Healthcare, Benefits, and on Administrative Rules holds a hearing on “Program Integrity for the Supplemental Nutrition Assistance Program” on Wednesday.
- The Kaiser Family Foundation holds a forum on healthcare prices on Wednesday.
- The Heritage Foundation holds an event on mental illness on Friday.
- The Alliance or Health Policy holds an event on state opportunities to address prescription drug costs in Medicaid on Friday.
- Senate Health, Education, Labor and Pensions Committee holds a hearing on “Examining Oversight Reports on the 340B Drug Pricing Program” on May 15.
- The American Enterprise Institute holds an event on “Reshaping the veteran narrative with the Department of Veterans Affairs” on May 15.
- The American Enterprise Institute holds an event on “Fixing health care: Driving value through smart purchasing and policy” on May 16.
New York state Attorney General Eric Schneiderman resigned after four women accused him of physical abuse:
Seth Meyers weighs in on Melania Trump’s “Be Best” platform:
Stephen Colbert calls the first lady's “Be Best” platform “vague:”