Morning Briefing
Summaries of health policy coverage from major news organizations
Administration Draws Line In The Sand With Denial Of Massachusetts' Bold Experiment To Cut Drug Prices
Stat: Mass. Gets A Thumbs-Down On Negotiating Medicaid Prices, But Oklahoma Wins On ‘Value’ Rebates
The Trump administration wants states to experiment with drug prices — but not too much. In a pair of decisions Wednesday, top health officials offered the first clear signals of just how far they will let state Medicaid agencies go when it comes to negotiating discounts for prescription drugs. The administration declined to approve a bolder proposal from Massachusetts to use a formulary to exclude some drugs from Medicaid coverage, a common negotiating tactic for commercial plans. At the same time, it approved a separate idea from Oklahoma to let the state’s Medicaid program negotiate extra rebates if a given drug isn’t as effective as expected. (Mershon, 6/27)
The Hill: Trump Admin Rejects Massachusetts Drug Pricing Proposal
Currently, states are required to cover almost all drugs approved by the Food and Drug Administration, but states are looking for new ways to cut down drug prices as Medicaid costs continue to eat up state budgets. While drug manufacturers provide deep discounts to states and the federal government in exchange for having their drugs covered by Medicaid, states argue these rebates, which are a set percentage of a drug's list price, are no longer enough sufficient as drug costs keep rising. (Hellmann, 6/27)
Modern Healthcare: CMS Denies Massachusetts' Request To Choose Which Drugs Medicaid Covers
For the CMS to sign off on Massachusetts' request, it would have to forgo rebates that drugmakers give to Medicaid programs in order to make them more affordable and negotiate prices directly with manufacturers. The state could then choose to exclude specific drugs based on cost-effectiveness or other approved criteria, or to employ a closed formulary structure similar to Medicare Part D or commercial plan formularies, according to the CMS. In that scenario, the state would need to keep track of spending so as to not exceed federal expenditures budgeted for the demonstration. (Dickson, 6/27)
Stat: Medicaid Must Pay For Drugs Approved Through FDA’s ‘Accelerated’ Pathway
Medicaid must cover drugs that the Food and Drug Administration has approved with a lower standard of evidence through its “accelerated approval” program, the Centers for Medicare and Medicaid Services said Wednesday in a letter to states. This announcement comes at a time when state Medicaid agencies and private insurers are trying to figure out what to do about high-priced drugs with unclear benefits. One example is Exondys 51, Sarepta’s treatment for Duchenne muscular dystrophy, which can cost $300,000 a year. Some patients have struggled to get this drug covered by Medicaid, even though Medicaid is supposed to cover all FDA approved outpatient drugs after the state program signs a pricing agreement with the company. (Swetlitz, 6/27)
Columbus Dispatch: Drug Middlemen Charging Ohioans Triple The Going Rate — Or More
Pharmacy middlemen are charging Ohio taxpayers three to six times as much to process prescription drugs for the poor and disabled as the industry standard. Figures in a study commissioned by Medicaid officials indicate that pharmacy benefit manager CVS Caremark billed the state about $5.60 per script, while Optum Rx charged $6.50 per script. (Candisky, 6/27)
