The Washington PostDemocracy Dies in Darkness

The Health 202: Trump's never-implemented ban on drug rebates is now cash for Congress

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with Alexandra Ellerbeck

Congress has tricks for finding money in out-of-the-way places when it wants to fund big priorities — such as the bipartisan infrastructure package lawmakers are struggling to pull together this week.

They’re eyeing a Trump-era ban on prescription drug rebates for just such budgetary sleight of hand.

The costly ban hasn’t even gone into effect yet.

Hastily finalized by the outgoing Trump administration in the fall, the regulation would end a widespread practice blamed by some experts for pushing the list price of medications ever higher. Drugmakers give rebates to insurance middlemen, but those discounts often don’t end up getting passed along to patients at the pharmacy counter. 

The measure, which the Biden administration has delayed until 2023, was among a handful of measures advanced under Donald Trump aimed at lowering the high cost of prescription drugs for American consumers. Indeed, the actuary for the Centers for Medicare and Medicaid Services has estimated the ban would lower out-of-pocket household spending.

But there’s a downside: The CMS actuary also said the rule would result in higher costs for the government, by causing insurers to raise Medicare premiums. It estimated the ban would increase federal spending by $196 billion over a decade. (That was one reason the Trump administration vacillated on the rule for a while, before eventually finalizing it in a rushed process.)

So, in theory, Congress could save money by delaying the rebate ban or reversing it.

The ban hasn’t even gone into effect and won’t for another 2½ years. But there are still savings to be had, and the 10 senators seeking a bipartisan compromise on infrastructure legislation are eyeing it.

Because the ban’s cost is factored into the spending baseline from the Congressional Budget Office, further delaying it — or even reversing it completely — would save money. Congress could then turn around and use those savings to pay for part of the $1 trillion infrastructure package. 

Yes, this tactic is viewed as gimmicky by some. It's kind of like this: You decide to buy a jet ski — then decide against buying the jet ski — and then count the money you would have spent as extra income you can use on something else.

But it’s a perfectly kosher thing for Congress to do, because all changes to legislation or regulations are weighed against the CBO’s spending baseline.

“You can take a rule that’s never been implemented and get billions of dollars out of it,” one health industry lobbyist told me. “It’s Washington at its worst.”

So in a way, Trump may have inadvertently helped fund Democrats’ infrastructure spending.

The group of 10 is hoping to delay the ban by two years, which would save about $45 billion. Then, later this year, Democrats could further delay the rule to pay for a big partisan health-related budget reconciliation measure later this fall.

Of course, this is assuming senators are able to finalize a deal.

They'd hoped to announce a bipartisan agreement this week. But they keep hitting snags over how much to spend and whether spending on things like roads and bridges will be subject to federal wage requirements for workers.

Yesterday President Biden met with Sen. Kyrsten Sinema of Arizona, one of the moderate Democrats who's been working closely with GOP senators on the potential deal. The president also tried to prod lawmakers with a series of tweets.

The drug industry doesn’t want the rebate ban delayed.

Pharmaceutical manufacturers were enthusiastic bystanders as Trump went after the pharmacy benefit managers instead of them, for once. His focus on the rebates helped to increase public awareness of the role these PBMs are increasingly playing in the drug supply chain, and how these rebate practices create a convoluted payment process that can hurt consumers in the end.

Abandoning the rebate ban would provide health insurers and drug middlemen with a “windfall,” said Debra DeShong, executive vice president of public affairs at the Pharmaceutical Research and Manufacturers of America.

“Despite railing against high drug costs on the campaign trail, lawmakers are threatening to gut a rule that would provide patients meaningful relief at the pharmacy,” she said.

Ahh, oof and ouch

AHH: The CDC is telling vaccinated people to wear masks indoors.

“The agency advised that people who live in high-transmission communities wear masks in indoor public spaces, even if they’ve been vaccinated. It also recommended that vaccinated people with vulnerable household members, including young children and those who are immunocompromised, wear masks indoors in public spaces,” The Post’s Yasmeen Abutaleb, Joel Achenbach, Dan Diamond and Adam Taylor report.

The Centers for Disease Control and Prevention also called for universal masking for all teachers, staff members and students in school, regardless of their vaccination status.

The new guidance represents a sharp turnaround from the agency’s recommendation in May that vaccinated people did not need to wear masks indoors or outside. At that time cases were dropping and the more infectious delta variant had not gained traction in the United States.

In a phone briefing with reporters, CDC Director Rochelle Walensky on July 27 urged vaccinated people to wear masks indoors in some cases, including in schools. (Video: The Washington Post, Photo: Brendan McDermid/The Washington Post)

CDC Director Rochelle Walensky said the changes were spurred from “worrisome” new data showing that vaccinated and unvaccinated people infected with the delta variant carry similar viral loads. That could mean that unvaccinated people may contribute to transmission of the virus, although one federal health official told The Post that the administration believes that vaccinated people play a “very small role in transmission.”

“Nobody wants to go backward, but you have to deal with the facts on the ground, and the facts on the ground are that it’s a pretty scary time, and there are a lot of vulnerable people,” said Robert Wachter, chair of the department of medicine at the University of California at San Francisco. “I think the biggest thing we got wrong was not anticipating that 30 percent of the country would choose not to be vaccinated.”

OOF: Biden plans to require federal workers to get vaccinated or undergo repeated testing.

The new directive, which is set to be announced Thursday, represents a significant escalation in the push to expand vaccine coverage, The Post’s Tyler Pager and Eli Rosenberg report.

“The plan is part of a change in tack by the White House in recent days as the delta variant has spread markedly through parts of the United States, particularly among unvaccinated Americans,” our colleagues write.

President Biden on July 27 said that the federal government is considering requiring all federal workers to get vaccinated against the coronavirus. (Video: The Washington Post)

The government will not fire federal workers who are unvaccinated but is expected to impose restrictions on them.

The move comes after government officials in California and New York City announced that they will require government employees to either be vaccinated or face repeated testing. A number of smaller businesses and employers have also announced vaccine mandates in recent weeks.

OUCH: The botched rollout of the AstraZeneca vaccine may be devastating for Africa.

The Oxford-AstraZeneca vaccine was supposed to be the vaccine of the world. It was easy to use, did not require special freezers and would be sold at cost, at the insistence of its developers. But the United States never approved it, and several European countries have limited its use in younger people over concerns of rare blood clots.

“Wealthy Western countries, now rolling in mRNA vaccines, are able to write off the Oxford/AstraZeneca jab. But poorer countries are paying the price. One of the most damaging moments was when French President Emmanuel Macron openly disparaged the jab in January, calling it quasi-ineffective,” Politico’s Jillian Deutsch and Ashleigh Furlong report.

Experts say the vaccine is, in fact, effective and could be a lifesaver around the world, but the hits to its image have increased vaccine hesitancy. Meanwhile, European Union officials say the company failed to communicate its problems effectively and overpromised on supply.

“A toxic mix of developments — fighting between the EU and U.K., caution regarding its use, a botched communication strategy and an over-promising of doses — may have ruined Africa’s best chance out of the pandemic,” Jillian and Ashleigh write.

More in coronavirus news

Europeans are frustrated as the United States keeps its travel bans.

“Whereas vaccinated U.S. tourists have been allowed to return to much of Europe for weeks, most Europeans continue to be unable to travel to the United States under a ban that was first imposed by President Donald Trump in March 2020,” The Post’s Rick Noack, Reis Thebault and Quentin Ariès report.

The White House has said that the continued restrictions are due to concerns over the delta variant, which has risen rapidly in European nations, including Spain, Britain and France.

“But the delta variant has long been in the United States, already accounting for the majority of new known cases, and many European nations are now starting to outpace the United States in vaccinations: 49 percent of Americans are fully inoculated, compared to more than 46 percent of European Union residents. Both have similar per capita coronavirus case numbers,” our colleagues write.

Germany, France, the Netherlands, Britain and Belgium are among the European countries that have a higher vaccination rate than the United States, according to Post data.

Sugar rush