Published: Sun, October 28, 2018
Medical | By Vicki Mclaughlin

Potential Medicare Reimbursement Demo to Lower Part B Drug Prices

Potential Medicare Reimbursement Demo to Lower Part B Drug Prices

2018 is the health-care midterm for a reason: Donald Trump and the rest of his party spent the last two years trying to advance policies that would deprive the most vulnerable Americans of access to health care.

Mr. Trump says the plan to peg prices under Medicare Part B to an "international pricing index" will correct a "rigged" system in which Americans effectively subsidize drug innovation and lower costs in nations like Germany, Japan and Canada.

The US, he said, spends more than Dollars 1 billion a year on two drugs to treat bone disease. The Medicare program, which covers 55 million elderly and disabled Americans, is responsible for 29 percent of the nation's prescription drug spending. "The mark-up on Part B drugs appears to independently influence prescribing patterns", said a May policy paper from Memorial Sloan Kettering Cancer Center's Drug Pricing Lab.

"Finally seeing this system reformed, in fact, is one of the pharmaceutical industry's ultimate nightmares", said Health and Human Services Secretary Alex Azar, a former Eli Lilly executive, in a Friday speech.

In those countries, the government health systems directly negotiate with pharmaceutical makers over the price of their drugs.

To address the concern and bring Medicare Part B spending down, HHS proposed to test an alternative payment for certain drugs that had ASPs higher than the worldwide price.

It also highlights an increasing push by the president personally and his administration more generally to emphasize health care in the runup to the elections, an issue polls show is top of mind with voters.

HHS Secretary Alex Azar criticized a system in which other countries to pay significantly less for drugs than the US government.

"Over time this would cause major shifts in drug development and commercialization priorities - for example, manufacturers are likely to under-invest in office-administered injectables, and emphasize self injectable or oral products preferentially", wrote Leerink's Geoffrey Porges in an October 25 note. So far, Republicans have been on the defensive when it comes to healthcare, especially when it comes to the GOP's attacks on preexisting condition protections, so the speech may be an attempt to reframe the healthcare conversation as Americans head to the polls. House Minority Leader Nancy Pelosi of California said if Trump wants to save seniors money he should seek congressional approval for Medicare to negotiate prices for its main prescription drug program, "Part D". Claiming that "global freeloading" has driven up drug costs, Trump said his plan could save Medicare more than $17 billion over five years, with the cost of some drugs dropping by as much as 30 percent. Nothing special, just the prices that other countries pay. It concludes that the higher United States prices means Medicare pays almost twice as much as the program would pay for the same or similar drugs in other countries. "We're fixing it. That's called real-life experience, I guess", Trump added. In the five-year experiment, carried out through CMS's innovation center, prices will be gradually and increasingly pegged to the new global index instead of average US sales price.

Oil prices drop as oversupply looms amid global market woes
West Texas Intermediate for December delivery added 26 cents to settle at $67.59 a barrel on the New York Mercantile Exchange. Brent crude oil fell $1.12 or 1.5% to a low of $75.77 per barrel and was trading around $76.24, down 65 cents, by 1130 GMT.

Megyn Kelly's show at NBC has been canceled
Kelly is in the middle of the second year of a three-year contract, which reportedly pays her more than US$20 million a year. Hall's and Roker's combined salaries were less than half of what NBC was paying Kelly, The Wall Street Journal reported .

Leicester City owner's helicopter crashes outside of King Power stadium
Freelance photographer Ryan Brown was covering the game and saw the helicopter clear the King Power stadium before it crashed. Srivaddhanaprabha is a Thai billionaire businessman who has owned Leicester City since 2010.

Already, the pharmaceutical industry lobbying group came out swinging. Most of the drugs in the Part B plan are a kind of drug called a "biologic", or drugs made of living organisms (usually cells).

The 19-page HHS report looks specifically at drugs purchased and dispensed by doctors themselves, under Medicare's Part B program.

The United States spent almost $26 billion for Medicare Part B drugs in 2016, the most recent year for which data is available. The report notes Part B is not subject to restrictions on the drugs that are covered, meaning there is little incentive to tamp down costs.

"The administration is imposing foreign price controls from countries with socialized health care systems that deny their citizens access and discourage innovation".

Trump has made lowering drug prices a central promise of his presidency.

While Medicare is barred from explicitly negotiating prices with drug companies, Trump's proposed changes are all created to use the collective power of the growing Medicare market to force drugmakers to bring down their prices or lose access to a potentially lucrative market. When Pfizer and Novartis announced over the summer they were pulling back on some planned price increases, Trump touted it as proof his pressure tactics were working.

Allan Coukell, senior director for health programs at Pew Charitable Trusts, said removing incentives that reward doctors for purchasing costlier drugs and bringing in a new way to control prices "makes a lot of sense".

Azar said more plans are being developed on drug costs.

Like this: