Drug company executives indicated last week they would be willing to slash their prices if they no longer were forced to pay middlemen the kind of discounts that many blame for driving up the cost of prescription drugs for consumers.
Now, a first-term Republican senator is trying to turn that pledge into a reality with a new bill banning the practice of "rebates" in which drugmakers pay middlemen in the confusing drug-pricing chain to make sure their drugs are covered by insurers. Sen. Mike Braun (R-Ind.) this week introduced a measure to end rebates negotiated between drugmakers and pharmacy benefit managers in transactions conducted in the private sector.
The proposal would do for private health plans what the Trump administration has already proposed doing for government-sponsored health plans as the president has publicly taken aim at drug prices, to mixed results so far. The Health and Human Services Department in January announced draft rules allowing drug companies to offer discounted prices directly to consumers, aiming to stop the controversial rebate practice. But those rules would apply only to Medicare drug plans and Medicaid managed-care plans.
Braun’s bill would ban rebates in all private plans, including employer-sponsored ones. When the administration's proposal was announced, HHS Secretary Alex Azar encouraged lawmakers to “get to work on extending this proposal to the commercial market, too.” Here, Braun has done just that.
“In an effort to lower drug prices, President Trump’s HHS is exposing the hidden system of kickbacks to middlemen known as pharmacy benefit managers (PBMs),” Braun said in a statement to The Health 202. “I believe Secretary Azar will support this basic measure that amplifies his efforts to provide greater drug price transparency.”
Braun told reporters he believes drug companies will get on board with his plan because they know the rebate system "doesn't make sense."
During last week’s testimony by drug executives before the Senate Finance Committee, Chairman Chuck Grassley (R-Iowa) asked whether their companies would lower prices if the Trump rule applying to public-sector plans is ultimately implemented.
The executives were reluctant to make firm commitments, but some signaled they would be willing to lower prices if rebates were banned in the private sector, too.
“If the rebates were removed from the commercial sector as well, we would definitely reduce our list prices,” AstraZeneca chief executive Pascal Soriot told Grassley.
In a statement to The Health 202, the company reiterated Soriot’s remarks, saying that if rebates for both private and public plans were eliminated, “we are prepared to reduce list prices by an equivalent amount of rebates less appropriate market based fees to those in the supply chain. This would reduce overall costs to patients and the government."
Merck head Kenneth Frazier told lawmakers he would “expect our prices would go down if we changed the system again, on the commercial side as well as the Medicare side.”
During the hearing, Bristol-Myers Squibb chief executive Giovanni Caforio said he shared the same position. After a follow-up question, Bristol-Myers Squibb said it remains “committed to working with Congress and the Administration on reforming the rebate system with a focus on what is best for patients.”
After the hearing, Sen. Ron Wyden (Ore.), the committee's ranking Democrat, called on the seven drug executives to answer in writing whether they would commit to lowering list prices if rebates went down. “Big Pharma is eager to point the finger at the middlemen, and now is their chance to follow through on their promises to be a part of the solution,” Wyden said in a statement last week.
David Mitchell, president and founder of Patients for Affordable Drugs, was skeptical, however. He said while Braun’s bill is a step in the right direction, without specific provisions to require list price reductions, “we cannot trust the drug companies to voluntarily lower list prices.”
“Let’s say a drug is $100 and a rebate is $30. If rebates go away, first we have to compel the drug companies to bring the price to $70, then we have to make sure they don’t start raising prices again willy-nilly,” Mitchell told me.
And the much-villainized middlemen, a trade group for the PBMs, said it would work with lawmakers but pointed the finger at those who pay them the rebates to begin with: drug companies.
"[T]he legislation appears to do absolutely nothing to address the root cause of the problem: high list prices that only the drug manufacturers have the power to set," J.C. Scott, president of the Pharmaceutical Care Management Association, told The Health 202 in a statement. "Despite drug manufacturers’ rhetoric, their pricing strategies are unrelated to the rebates they negotiate with PBMs."
Mitchell said the bill still highlights the “bipartisan energy” around addressing skyrocketing drug costs.
And Rachel Sachs, an associate professor of law at Washington University in St. Louis, said the GOP senator's proposal puts the onus on drug companies to act.
Drug companies have been “very successful in demonizing PBMs over the last few years,” she told me. “Now that it looks like Congress is thinking about giving the pharmaceutical industry what they have asked for on PBMs, the pharmaceutical industry needs to step up to the plate and make serious concessions, or they may face more extreme reactions from Congress.”
Braun said his bill, dubbed the Drug Price Transparency Act can start to bring transparency to an industry that has “given us a system that is as broken as one can be.”
“This bill doesn’t outlaw PBMs. It doesn’t even outlaw rebates. What it’s going to do is shed light on the process so they’re not going to be able to get by with the argument that there’s room for a whole other layer of a middleman,” Braun said. “You don’t need it."
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AHH: Food and Drug Commissioner Scott Gottlieb, who spearheaded a crackdown on including youth vaping and opioid addiction, is resigning from his post and will leave the Trump administration in about a month.
Gottlieb said the decision was made to spend more time with his family, who still live in Connecticut, our Post colleagues Laurie McGinley, Lenny Bernstein and Josh Dawsey report. Gottlieb has been commuting back and forth weekly from Washington to his Westport home.
“The resignation was not sought by the White House,” our colleagues write. “A senior White House official said Gottlieb had spoken to President Trump, and that the president liked the FDA chief and did not want him to leave. While Gottlieb had some policy disagreements with the White House, he is well respected, and could even be asked to take another post, said two officials.”
“It was a very hard decision,” Gottlieb told our colleagues. “This is the best job I will ever have. I’m leaving because I need to spend time with my family. I get home late Friday, work on weekends and come back to Washington on Sunday. I did the job 100 percent."
Trump tweeted about his outgoing FDA commissioner yesterday:
Scott Gottlieb, who has done an absolutely terrific job as Commissioner of the FDA, plans to leave government service sometime next month....— Donald J. Trump (@realDonaldTrump) March 5, 2019
....Scott has helped us to lower drug prices, get a record number of generic drugs approved and onto the market, and so many other things. He and his talents will be greatly missed!— Donald J. Trump (@realDonaldTrump) March 5, 2019
Gottlieb’s resignation was a surprise to some top officials at the agency. And it comes as the issue of youth vaping, which he has aimed to tackle, is being reviewed by the White House Office of Management and Budget.
“The blueprint is expected to move forward, but Gottlieb’s departure could throw into question other controversial tobacco initiatives he championed that have not yet emerged from the FDA, including proposals to ban menthol cigarettes and to reduce nicotine levels in cigarettes to ‘minimally addictive’ levels,” our colleagues write.
An HHS spokeswoman told The Post there is no information yet on who would take over the post on either an acting or permanent basis.
I’m immensely grateful for the opportunity to help lead this wonderful agency, for the support of my colleagues, for the public health goals we advanced together, and the strong support of @SecAzar and @realDonaldTrump - This has been a wonderful journey and parting is very hard. https://t.co/1Zu9y7NTwR— Scott Gottlieb, M.D. (@SGottliebFDA) March 5, 2019
I'm sorry to hear this. Commissioner Gottlieb has prioritized many key public health issues during his service, and he has really moved the agency forward on drug pricing issues as well. https://t.co/p0TCPAcI8G— Rachel Sachs (@RESachs) March 5, 2019
Sen. Dick Durbin (D-Ill.):
I found an unlikely ally in Commissioner Gottlieb when it came to fighting Big Tobacco and the e-cigarette epidemic. I hope Gottlieb’s successor picks up right where he leaves off. https://t.co/Y451ahPADL— Senator Dick Durbin (@SenatorDurbin) March 5, 2019
Farzad Mostashari, a former health information chief during the Obama administration:
.@SGottliebFDA was one of the best. Here's a partial list of what made him special in my eyes.— Farzad Mostashari (@Farzad_MD) March 6, 2019
1/ He did more on tobacco than I thought possible, including banning menthol, action on teen vaping, and laying groundwork for reducing nicotine in cigshttps://t.co/nmiF8FbSCB
OOF: During a Senate hearing during in which witnesses calling for a national campaign to counter the anti-vaccine movement amid a measles outbreak, Sen. Rand Paul (R-Ky.) said he doesn’t believe the government should require people to get vaccinated.
The Kentucky Republican and physician has made similar comments before, our Post colleague Felicia Sonmez reports, ahead of his unsuccessful bid for president in 2016. But Paul was the only lawmaker to strike a defiant tone during Tuesday’s hearing.
“It is wrong to say that there are no risks to vaccines. Even the government admits that children are sometimes injured by vaccines . . . I still don’t favor giving up on liberty for a false sense of security,” he said. He acknowledged unvaccinated people could spread diseases but claimed “there doesn’t seem to be enough evidence of this happening to be reported as a statistic.”
Sen. Bill Cassidy (R-La.), who is also a physician, rebutted his colleague’s comments.
“Let me give some color to what Sen. Paul said,” Cassidy said. “You may or may not know that I’m a physician. And I’ve seen people who have not been vaccinated, who require liver transplantation because they were not ... Or ended up with terrible diseases if for no other reason that they didn’t understand vaccination was important.”
Cassidy said there should be repercussions for parents who don’t follow state vaccination requirements for their school-aged children.
Our Post colleague Lena H. Sun reports, the 18-year-old Ohio high school student who got a vaccination after challenging his mother’s anti-vaxx stance “attracted the most attention.”
Ethan Lindenberger said his mother depended on false information from anti-vaccine groups rather than from health officials. “These sources that spread misinformation should be the primary concern of the American public,” he said during the hearing, calling on health officials to use personal stories as a way to stop the spread of inaccurate messaging. “When you convince parents, not that information is incorrect, but that their children are at risk, that’s a much more substantial way to get people to change their minds.”
OUCH: The Planned Parenthood Federation of America and the American Medical Association have filed a lawsuit challenging a new federal rule that looks to block clinics from referring low-income women for abortions.
In a Tuesday filing in the U.S. District Court in Oregon, the groups argued the Trump administration’s rule would “violate patients’ rights, force doctors to withhold information and harm the 4 million patients who rely on the Title X program for their health care,” our Post colleague Ariana Eunjung Chat reports. The rule could shift tens of millions of dollars away from organizations such as Planned Parenthood and toward faith-based and antiabortion clinics.
One day earlier, California and a separate group of 20 states announced suits on similar grounds, Ariana adds.
“Because of the administration’s overreach and interference in health-care decision-making, physicians will be prohibited from having open, frank conversations with their patients about all their health care options,” AMA President Barbara L. McAneny said in a statement.
Planned Parenthood President Leana Wen called the rule “unethical, illegal and dangerous.”
Rep. Diana DeGette (D-Colo.), chair of the House Energy and Commerce subcommittee on Oversight and Investigations:
This is BIG: The American Medical Association just joined @PPFA in suing to block President Trump’s Title X Gag Rule. AMA says withholding information about abortions, or any other healthcare-related options, from patients goes against its Code of Medical Ethics. #NoGagRule— Rep. Diana DeGette (@RepDianaDeGette) March 5, 2019
— In the biggest advance for depression in years, the FDA approved a new antidepressant meant for people with intractable depression who don’t respond to other treatments. The novel treatment, a nasal spray called esketamine, is derived from an old anesthetic, ketamine, which was once popular as a party drug called Special K, our Post colleagues Laurie and Carolyn Y. Johnson report.
The new antidepressant “has been eagerly anticipated by psychiatrists and patient groups as a powerful new tool to fight intractable depression” our colleagues write. “The spray acts within hours, rather than weeks or months as is typical for current antidepressants, and could offer a lifeline to about 5 million people in the United States with major depressive disorder who haven’t been helped by current treatments. That accounts for about one in three people with depression.”
The drug will include a black box warning, which is the most severe safety warning the agency issues. The warning will “caution users they could experience sedation and problems with attention, judgment and thinking, and that there’s potential for abuse and suicidal thoughts,” Carolyn and Laurie write. “People who take esketamine will have to be monitored for at least two hours after receiving a dose to guard against some of these side effects.”
“There are risks associated with the drug, but I think the benefits here probably outweigh those,” said Lee Hoffer, a medical anthropologist at Case Western Reserve University who was a member of the FDA advisory panel that recommended the drug’s approval.
— And here are a few more good reads:
- The House Appropriations Subcommittee on Military Construction, Veterans Affairs, and Related Agencies holds a hearing on electronic health record modernization.
- The Senate Special Committee on Aging holds a hearing on prescription drug prices on Thursday.
- The House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law holds a hearing on the effects of consolidation and anticompetitive conduct in health care markets on Thursday.
President Trump signs executive order to address veteran suicide: