Ambitious new legislation unfurled on Capitol Hill this week could give President Trump the political “win” on drug prices he’s seeking.
But it has also laid bare a GOP schism over how far the government should go in demanding lower prices from the pharmaceutical industry.
The bipartisan bill — on the powerful Senate Finance Committee’s docket this morning — would cap, for the first time ever, how much drugmakers could increase the prices of medications in the Medicare program. If a price rises by more than the inflation rate, its manufacturer would have to pay back the difference to the federal government in the form of a rebate. The idea is that putting downward pressure on Medicare prices would translate to lower prices for commercial health plans and consumers, too.
Top officials in the Trump administration — viewing the measure from Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) and ranking Democrat Sen. Ron Wyden (Ore.) as their best hope of major action on drug pricing — are decidedly on board. Health and Human Services Secretary Alex Azar, Domestic Policy Council head Joe Grogan and several other officials met with committee Republicans earlier this month to urge their support.
“We are encouraged by the work of the Senate Finance Committee, which reflects many ideas set forth in President Trump’s budget to lower prescription drug costs and reduce out of pocket costs for Americans,” HHS spokeswoman Caitlin Oakley said in a statement yesterday. “Now is the time for seniors to have real protection for their pocketbooks, for drug companies to be held accountable, and for the American patient to finally come first.”
White House deputy press secretary Judd Deere:
The @WhiteHouse is encouraged by the bipartisan work of Chairman Grassley and Senator Wyden to craft a comprehensive package to lower outrageously high drug prices, and today we are engaging with coalitions to help build support. https://t.co/ugQxptg4Pz— Judd Deere (@JuddPDeere45) July 23, 2019
We will work with Senators to ensure this proposal moves forward and advances the President’s priority of lowering drug prices even further and increasing transparency in healthcare for the benefit of all Americans.— Judd Deere (@JuddPDeere45) July 23, 2019
So are most Democrats, who wanted the measure to go further by allowing the government to directly negotiate lower prices with drugmakers and so don’t have qualms about the milder cap-and-rebate approach.
Winning over Republicans will be the issue. For many, allowing direct Medicare price negotiations is akin to price-fixing. And less direct efforts to restrain how much drugmakers can change — such as what Grassley and Wyden are proposing — are viewed as a step away from that.
“I don’t even know what we believe in anymore; it’s just baffling,” one GOP lobbyist, who represents some health insurers and pharmacy benefit managers, told me.
How today’s markup goes will be telling. Finance Committee members have submitted dozens of amendments to the Grassley-Wyden legislation, although it’s unclear which will actually get a vote. Sen. Pat Roberts (R-Kan.) is offering an amendment prohibiting mandatory rebates if the manufacturer enters into a “price protection” agreement with Medicare Part D plan sponsors.
“Basically we’re talking about price controls,” Roberts told Roll Call’s Andrew Siddons. “And once you open that door, other things will happen.”
Other skeptical senators to watch include Sen. Patrick J. Toomey (R-Pa.) — who has submitted several amendments to strike parts of the bill — along with Sens. Rob Portman (R-Ohio), Tim Scott (R-S.C.) and Mike Crapo (R-Idaho).
Politico's Sarah Owermohle:
Even if the measure passes the committee today, it will face a long grind going forward. It’s unclear whether House Democrats would prioritize the bipartisan bill or focus on the legislation they’ve promised to roll out in September allowing direct negotiations, as my Washington Post colleague Yasmeen Abutaleb reported earlier this week. And the drug industry’s trade group is vowing to fight the measure tooth and nail.
“The legislation would siphon more than $150 billion from researching and developing new medicines, while giving those savings to the government, insurers and [pharmacy benefit managers] — not seniors,” Stephen Ubl, PhRMA chief executive, said in a statement. “It replaces the market-based structure of Medicare Part D with Medicaid-style price controls.”
It’s a lot easier to be a Democrat who believes in a more vigorous federal government when it comes to easing the high cost of prescription drugs in the United States. The simplest solution would be for the U.S. government to do exactly what other developed nations have done — just cap what drugmakers are allowed to charge.
Instead, Republicans have been trying to get at the problem in indirect ways. But they're not unified on what's indirect enough.
“There are just disagreements within the party as to how much and at what point the government should get involved,” said Tara O’Neill Hayes, deputy director of health-care policy for the conservative American Action Forum.
“I think at their core, they all believe the market is going to produce a more efficient outcome,” O’Neill said. “But that said, I think different people have a different point of view of when a market has failed and when the government should step in.”
The White House Office of Management and Budget is reviewing a proposal from HHS to link drugs that doctors directly allocate to Medicare patients to the prices paid in other countries via an international index.
Grassley, who is willing to go further than many GOP members on cracking down on drug prices, has said he doesn’t support that idea. And conservative groups, including FreedomWorks, are blasting it as “price controls.”
The question of government intervention has also arisen in a parallel effort to halt the surprise medical bills that plague many patients. A bipartisan bill from Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) lays out how providers and insurers should negotiate the price for out-of-network care — by pegging it to a median in-network rate.
But some conservatives have also termed that approach the same as a price control. “This type of system has been compared to single-payer health care, and the results could be just as disastrous as those systems have been,” said a recent American Spectator commentary.
Of course, there’s a distinction between the government setting prices on its own versus simply pegging payments to prices set by private industry. Conservative policy wonk Avik Roy strongly defended the Grassley-Wyden bill, writing that it merely limits subsidies to drug companies to consumer inflation.
“The go-to argument for the drug lobby is that limiting government subsidy growth to inflation is a ‘price control,’ ” Roy wrote in Forbes. “But it’s nothing of the sort, as subsidies are not prices.”
AHH: Major opioid manufacturers argue there’s no way to prove they are responsible for harms associated with the nation's opioid epidemic, calling on a judge to dismiss the first test case over whether companies should pay for their role in the crisis.
Lawyers for Purdue Pharma, Mallinckrodt Pharmaceuticals and other drug companies say two Ohio counties “have no evidence that their alleged injuries were proximately caused by the collective ‘manufacturers’ . . . rather than by criminal cartels trafficking in deadly street drugs,” according to newly unsealed court documents.
“The request that federal judge Dan Polster toss out the lawsuit is a common pretrial tactic in civil litigation,” our Post colleagues Lenny Bernstein and Katie Zezima report. “More significantly, it is the first full public airing of the legal defense manufacturers are likely to offer in the landmark lawsuit brought by nearly 2,000 cities, counties and other groups across the country, the largest civil case in U.S. history. Polster has urged all sides to settle the case.”
The two Ohio counties are set to go to trial first in October, a test case in the massive lawsuit. “A person with knowledge of the defense strategy said the plaintiffs need to show that the companies were conspiring with one another and acting in concert,” our colleagues report. “That’s difficult to do because the companies are fierce competitors.”
— Southwest Virginia was hit particularly hard by the ongoing opioid epidemic.
In the state, 1.6 billion pills flowed into Virginia, including nearly 17 million into Russell County — an average of 84 opioids per county resident per year. That’s according to the recently released data from the Drug Enforcement Administration that was obtained and analyzed by our Post colleagues, who have been releasing parts of their staggering investigative reporting this week.
“The opioid epidemic today has ravaged big cities as well as remote towns and has spared no demographic group. But it has been particularly brutal here in central Appalachia, which has seen the coal industry contract and now has some of the highest poverty and disability rates in the nation,” our colleagues Joel Achenbach, Joyce Koh, Dalton Bennett and Melina Mara report.
Appalachia became ground zero for the crisis in part because of the need coal miners — and others in physically demanding jobs — had for painkillers.
Jason Boyd, a 45-year-old who is now in recovery, described abusing prescription pills in the 1990s: “At that time, people was getting them from a doctor for a backache. Or they’d say, ‘I got a bad liver, I can’t take Tylenol pills.’ . . . You could go up any street, and out of 10 people, seven people had pills. Either selling them or doing them or both.”
Follow the rest of The Post’s investigative series here.
OOF: Allergan announced a worldwide recall of its textured breast implants that have been linked to a rare cancer, following a report from the Food and Drug Administration finding a marked increase in the cancer and deaths associated with the products.
The devices had already been banned or recalled in many countries, our Post colleague Laurie McGinley reports. These textured implants make up less than 5 percent of the implants sold in the United States -- most implants in the country have a smooth surface.
The FDA reported new data reveals there have been 573 cases of a rare lymphoma linked to the implants, most of which involve Allergan products, since 2011 when the agency started its tracking of the issue. There have also been 33 deaths. Of the deaths, the implant manufacturer was identified in 13 cases, and the Allergan implant was linked to 12 of those deaths.
"The agency said Wednesday that the latest data indicates the risk of such disease is six times greater with Allergan Biocell textured implants than with other types of textured implants sold in the United States," Laurie writes. "The FDA’s new stance against the Biocell product is a reversal of its posture a few months ago, when it said there was insufficient evidence to try to remove the devices from the market."
OUCH: Sanofi announced it expects shipments of its flu vaccine to be delayed about a month ahead of the upcoming flu season.
“The company said the delay is due to the World Health Organization taking a bit longer to select vaccine virus strains,” CNBC’s Berkeley Lovelace Jr. reports. “The extra time allowed health officials to improve the match of strains of H3N2 viruses expected to circulate during the 2019-2020 season, Sanofi said.”
James Cherry, a professor of pediatrics at the David Geffen School of Medicine at the University of California, told Berkeley the availability of vaccines from other manufacturers means the delay “likely won’t have an adverse effect.”
The drugmaker says shipments will begin in the middle of next month and are set to be complete by the end of November.
— A new antiabortion health group in Texas is suing the Trump administration, arguing that it is entitled to federal family planning funding under the Trump administration’s changes to the Title X rules.
Vita Nuova filed a class-action lawsuit on behalf of similar faith-based health-care providers that oppose abortion rights, Politico’s Alice Miranda Ollstein and Renuka Rayasam report. They report most of the groups that receive grants from the Title X program — which provides $260 million a year, serving more than 4 million mostly low-income, uninsured patients — have an established client base or are state health agencies that dole out funds to providers in the state.
“Other anti-abortion groups and crisis pregnancy centers have been ramping up their efforts to obtain federal funding,” Alice and Renuka report. “But Vita Nuova incorporated on July 2, just one day before filing the lawsuit, according to a filing with the Texas secretary of state. Its founding members are affiliated with the Heidi Group, a troubled crisis pregnancy center that lost millions of dollars in contracts with Texas after repeatedly failing to meet agreed-upon goals. The new group lacks a website and, according to the complaint, has yet to raise funds or build a network of providers. It’s not clear what medical services, if any, it plans to provide.”
— President Trump is reportedly weighing an executive order to slash branded prescription drug prices for government programs, including Medicare.
“The order under discussion would be much broader than the Administration's previously disclosed proposal to lower prices on physician administered, or Part B, drugs by tying prices to lower costs in other countries,” Reuters’s Michael Erman, Carl O’Donnell, Roberta Rampton and Caroline Humer report, citing industry sources. “The administration is now looking at ways to use this or a similar method to lower prices in Medicare's much larger Part D, which is for widely used prescription drugs patients take at home, such as for cholesterol and blood pressure, the sources said.
Such pricing controls could also be applied to health plans run by the Department of Defense and Veterans Affairs Department, Michael, Carl, Roberta and Caroline report, adding such an executive order could be released as early as in the next few weeks. “The White House could delay the executive order if the Senate bill looks likely to garner bipartisan support,” they add.
— And here are a few more good reads:
- The House Oversight and Reform Subcommittee on Economic and Consumer Policy holds a hearing on Juul’s role in the youth nicotine epidemic.
- The House Homeland Security Subcommittee on Intelligence and Counterterrorism holds a hearing on the security implications of the opioid crisis.
Here’s a guide to some of the claims made by lawmakers during the Mueller hearings that were factually shaky or misleading: