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The Health 202: HHS Secretary Azar is courting Capitol Hill on drug prices

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with Paulina Firozi


Health and Human Services Secretary Alex Azar met this week with key Capitol Hill lawmakers to discuss combating high drug costs, even as the pharmaceutical industry ramped up its complaints about his surprisingly bold effort to take on the problem through the Medicare program.

Azar trekked up to the Hill on Tuesday and Wednesday to meet with many of the House and Senate lawmakers who will drive Congress’s approach to prescription drug spending over the next two years. His promised experiment with pegging certain Medicare payments to an international index doesn’t need congressional approval, but it could be harder for him to move ahead with the effort if Republicans start airing skepticism about it. And Azar would need Congress's help for some of the other ideas contained in President Trump's drug-pricing blueprint.

So far, Republicans are mostly holding their fire on the secretary's Medicare Part B effort (which we explain here), although some privately think Azar is going too far. Lawmakers said they discussed the pilot program with Azar, along with talking generally about other problems like high drug list prices and the opaque system of drug rebates.

“There were not conclusions drawn,” Senate Finance Chairman Chuck Grassley (R-Iowa) told reporters yesterday. “It was in no way confrontational, just discussion.”

Azar met Wednesday morning with Senate Finance Committee Republicans, along with Sen. Lamar Alexander (R-Tenn.), who heads up the Health, Education, Labor and Pensions Committee. A day earlier, he visited Sen. John Cornyn (R-Tex.) and House Oversight Committee Chairman Elijah Cummings (D-Md.).

Cummings told me he didn’t want to get “too optimistic.” But the Democrat said he felt Azar was “very sincere” in his desire to stop the massive drug prices hikes of recent years.

“I got the impression that he sincerely wants — as I view it — the pharmaceutical companies to make a reasonable profit but not by raising drug prices by 10, 15 times almost overnight," said Cummings, who made his own set of drug-pricing recommendations last week. “I think they’re willing to at least sit down and have a real exchange.”

HHS spokeswoman Caitlin Oakley, who confirmed the meetings took place, said discussions involved many aspects of the drug-pricing blueprint released by Trump in the spring. That includes “increasing negotiation in Part D, reforming Part B so that American patients pay similar prices to what Europeans pay, and addressing the perverse incentives behind rebates and rising list prices.”

“Secretary Azar and the Trump Administration are committed to working across the aisle and have made it clear that all options that preserve drug safety and keep patients at the center are on the table,” Oakley said.

But the Pharmaceutical Researchers and Manufacturers of America is making clear it wants the Part B experiment off the table, period. Its head honchos gathered reporters Wednesday morning to lay out the arguments for why the experiment would harm patients’ access to lifesaving medicines and hurt research-and-develop efforts in the United States.

“We think this model goes way too far,” said Lori Reilly, executive vice president for policy, research and membership at PhRMA. “In our opinion, it’s not a true test when you’re talking about a national scale overhaul of Medicare policy.”

Under the five-year experiment, which HHS has yet to formally propose, half of all payments for doctor-administered drugs would be tied to a new international index reflecting prices in 16 other countries. The agency has argued the U.S. government pays far more for these drugs than in other countries, advertising the new index as a way to put things on a more equal footing.

Drugmakers who provide cancer therapies would be especially affected, as their medications are typically paid for under the Part B program. Part B spending has grown dramatically in recent years, as rapid oncological advancements have produces more effective — but also more expensive — treatments for cancer patients.

But PhRMA is trying to make the case these patients would be harmed under the proposed cuts, pointing to other countries with socialized medicine. Residents of Greece, the Czech Republic and Japan, for example, have access to fewer new cancer medications and must wait longer before they can get the newest treatments, the group argues.

“It is very clear in our mind patient access could be harmed,” Reilly said. “We’ve seen these types of systems play out outside the U.S., and in virtually all those systems access to treatment is delayed and sometimes completely withhold from patients.”

PhRMA officials stressed that Azar himself has derided health-care systems in other countries. Azar told the Senate HELP panel in June: “God help you if you get cancer in the United Kingdom."

“You don’t have choice or access to the most modern oncology and cancer therapies,” Azar said at the time. “You’ll be coming to America to get your treatment if you have the money to be able to get here.”

Yet critics note that PhRMA has backed very few specific ideas to directly rein in drug prices, which are higher in the United States than anywhere else. PhRMA chief executive Steve Ubl insisted his members want to be “part of the solution.”

“I want to reiterate that our members want to be part of the solution; we don’t believe in the status quo, we don’t defend the status quo,” Ubl said. “We know the system needs to change in important ways.”

Sam Rogers and Renee Howell live in fear of their next drug overdose as fentanyl has sent the rate of deaths among African Americans skyrocketing. (Video: Whitney Shefte/The Washington Post)

AHH: Federal officials have launched an audit of how the D.C. government handled the millions of dollars in grant funding it was awarded to tackle the opioid crisis, our Post colleague Peter Jamison reports. Officials from the Substance Abuse and Mental Health Services Administration notified the District of the audit on Jan. 9, according to documents obtained by The Post, and have started visiting D.C. government offices and at least one treatment provider that received funding.

"The audit appears to focus on grant money that was not spent as intended to combat the opioid epidemic and on federally funded programs that D.C. government officials failed to implement,” Peter writes. “In a letter notifying the city of the audit, Jack Goldberg, director of SAMHSA’s Office of Financial Advisory Services, said the agency would be scrutinizing both the management of those funds and the city’s plans for using an additional $21 million in federal grant money it expects to receive this year for proposed opioid programs.”

Theaudit follows a report from Peter in December on how the District has fallen short in its response to the opioid crisis, failing to properly spend grant funding dedicated to the crisis even as there was a surge in fatal heroin overdoses, especially in black neighborhoods.

D.C. Deputy Mayor for Health and Human Services Wayne Turnage confirmed the audit and said in a statement: “In confronting this epidemic, we obviously value our partnership with SAMHSA and welcome the review and feedback as we continue to seek opportunities to better leverage federal grants and effectively serve District residents.”

OOF: Purdue Pharma sought to partner with universities and hospitals to expand its sales of opioids. That's one of several revelations in a trove of court documents released this week in a Massachusetts suit against the drug company.

Purdue Pharma struck a deal with Massachusetts General Hospital in the early 2000s to start a pain program, Stat’s Andrew Joseph writes. And Dr. Jane Ballantyne, who was director of the Pain Center at the hospital, thought it seemed like a good idea and a chance for the hospital and the drug company to work together on easing patient pain.

“Purdue instead saw the sponsorship of a pain program at Mass. General as a way to gain sway at one of the most influential academic medical centers in the country and boost its revenues — by encouraging doctors to prescribe OxyContin and Purdue’s other opioids to more patients at higher doses and for longer periods of time — according to a court document made public Tuesday,” Andrew writes.

After Ballantyne left the hospital in 2008, Purdue renewed its sponsorship, “paying the hospital $3 million for the Massachusetts General Hospital Purdue Pharma Pain Program and — as a result — access to prescribers, ties to medical students and physician trainees, and political capital at a time when scrutiny of opioid manufacturers was increasing.”

OUCH: Hospitals are criticizing a reported plan the Trump administration is considering to overhaul Medicaid by giving states block grants for the program, Modern Healthcare’s Robert King reports.

The plan would mean a federal spending caps for Medicaid, which could mean states would have to slash Medicaid rolls or cut payments to some hospitals and nursing homes to lower spending. “Chip Kahn, CEO of the Federation of American Hospitals, told Modern Healthcare that he is concerned about how block grants will affect access to coverage and questioned whether the CMS can legally allow these waivers,” Robert writes.

Ashley Thompson, senior vice president of public policy analysis at the American Hospital Association, also expressed concern about the impact on coverage: "We have long voiced concerns about how block granting Medicaid could ultimately result in losses of coverage and negatively impact access to quality care," she told Robert.

Politico’s Rachana Pradhan and Dan Diamond first reported the administration is drawing up plans on the potential change.


—Rep. Anna Eshoo (D-Calif.), the new chair of the House Energy and Commerce subcommittee on Health, said drug pricing is a priority but that members needed to first understand the opaque and confusing process.

“I don’t think anyone can sit down and say, off the top of their head, this is the way it’s done,” she told reporters. “In many ways. it’s a jaw-dropper.”

Eshoo continued: “I’d like to start out that way, and I think that when you get to examine each layer that you can’t help but think, ‘Why does it work this way? What’s the benefit of it? Who does this benefit? Does the patient, the consumer, win in this?’ I think that’s the way I want to start.”

She said it was critical to "examine" the issue before moving forward with any specific legislation. "If you don't understand the construct, how do you know that 'I'm putting this bill in, it's going to fix something.'" 

—Eshoo also said she wants to hold a hearing to make sense of the many "Medicare-for-all" proposals that have been introduced. 

"There are several Medicare-for-all bills that are out there, but they all have a different interpretation," the California Democrat told reporters. "I think that it would be interesting to have the authors of these bills come and testify and explain what their bill does and have the members ask them questions." 

She said lawmakers could get answers on whether the Medicare-for-all proposals have been scored by the Congressional Budget Office, whether such a plan would mean getting rid of the Affordable Care Act, and what would happen to people's current coverage under such a system.

"It would be instructive I think to everyone because to me it's confusing right now," she said. "I'm not making a judgment as to whether I think it's a good idea or not." 

— Rep. Diana DeGette (D-Colo.) told reporters she wants to hold hearings on the price of insulin and call on pharmaceutical companies to testify, according to Politico. DeGette is the new chairwoman of the House Energy and Commerce subcommittee on Oversight and Investigations.


— Oliver Wyman will release an analysis today concluding Congress's actions in early 2018 to delay the ACA's health insurance tax for 2019 helped prevent Medicare Advantage premiums from increasing 55 percent on average. The study was commissioned by UnitedHealth Group, which has been lobbying to get the so-called "HIT" tax further delayed or repealed. Analysts estimate the nationwide annual premium for Medicare Advantage plans could have increased from $393 in 2018 to $612 in 2019 if the tax had been allowed to go into effect.

— An Apple Watch for every baby boomer? That could be a plan in the works from Apple, which has reportedly had discussions with three private Medicare plans about subsidizing the watch for people over 65.

No deals have been made yet, but insurers are looking at the possibility. Apple watches start at $279 for older models and $399 for the newest version, which includes fall detection and an electrocardiogram, CNBC’s Christina Farr reports.

“Apple has paid a visit to several of the largest insurers in the market, as well as some smaller, venture-backed Medicare Advantage plans,” Christina writes. “Health experts say that seniors are an ideal market for the Apple Watch, which has introduced features that can be used by anyone, but are most beneficial to seniors, including fall detection and cardiac arrhythmia monitoring. It also makes sense as a business model for insurers, as seniors are a particularly lucrative market.”

Even with the price of the product, insurance executives say the initiative would be worth it if wearing the watch helps beneficiaries detect health issues before they require expensive treatment, Christina writes. "Avoiding one emergency room visit would more than pay for the device," said Bob Sheehy, the chief executive of Bright Health, an insurance start-up with a Medicare Advantage plan.

— And here are a few more good reads: 

Forget to take your medication? A new digital pill will alert you — and your doctor. (Peter Holley)

UnitedHealth loses appeal over underpayments (Modern Healthcare)


88-year-old woman dies after being found in garden of assisted-living facility in Virginia (Justin Jouvenal)

Patients Turn To GoFundMe When Money And Hope Run Out (Minnesota Public Radio)


New York Confronts Its Worst Measles Outbreak in Decades (New York Times )

Boston, Cambridge mayors plan visits to safe injection sites in Canada (Boston Globe)

On the Senate floor with a gun on her hip, Republican says packing heat can deter violence (Laura Vozzella)

Michigan State’s president to resign after he said sexual abuse victims enjoyed the spotlight (Susan Svrluga)


Patient groups blast Trump drug pricing proposal in new ad campaign (Stat)


These are the voices of the shutdown (Whitney Shefte, Jorge Ribas, Joyce Koh, Lee Powell, Drea Cornejo, Paul Raila and Ray Whitehouse)

USDA reopens many field offices for 3 days to help farmers amid shutdown (Politico )


Coming Up

  • The 46th annual March for Life rally will be held in Washington on Friday.
  • The National Institutes of Health's All of Us Research program hosts a live Twitter chat on digital health technology and the future of health research on Friday.

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Cardi B took to social media to call out President Trump over the partial government shutdown on Jan. 16. (Video: Drea Cornejo/The Washington Post)