Morning Briefing
Summaries of health policy coverage from major news organizations
PBMs Breathe Sigh Of Relief As Trump Kills Drug Rebate Proposal And Pharma Companies Become Next Likely Target
The New York Times: Trump’s Efforts To Rein In Drug Prices Face Setbacks
President Trump’s plan to lower prescription drug prices hit two major obstacles this week. He killed a proposal on Thursday that would have reduced out-of-pocket costs for older consumers out of concern that it would raise premiums heading into his re-election campaign. And a federal judge threw out a new requirement that drug companies disclose their prices in television ads. Administration officials rushed to assure the public that the double setback did not reflect failure on one of the president’s signature issues, one that has fueled public outrage and drawn the attention of both parties. (Thomas and Goodnough, 7/11)
Modern Healthcare: Trump Administration Abandons Plans To Limit Drug Rebates
The proposed HHS rule, first unveiled in January, would have excluded the rebates drugmakers pay to pharmacy benefit managers from protections from anti-kickback laws. Instead, the agency would have created new safe harbor protections to protect certain PBM service fees and another protection for certain price reductions made at the point of sale. (7/11)
NPR: Trump Administration Walks Back A Plan To Reduce Drug Costs
Right now, if you're a Medicare Part D beneficiary, and you need to pick up a drug that has a $120 list price, you might have to pay that full price, even if the middleman that negotiates on behalf of your insurer only pays a net price of $100 for it, after rebates. The idea of this proposal was that the consumer would only have to pay the discounted price. (Simmons-Duffin, 7/11)
The Associated Press: Setbacks For Trump's Drive To Lower Prescription Drug Costs
The rebate plan was crafted by Health and Human Services Secretary Alex Azar but ran into opposition from White House budget officials. That pushback stiffened after the nonpartisan Congressional Budget Office estimated that the plan would have little effect on manufacturer prices and would cost Medicare $177 billion over 10 years by leading to higher premiums subsidized by taxpayers. Trump's reversal on rebates was a win for insurers and middlemen called "pharmacy benefit managers" who administer prescription drug plans for large blocks of insured patients. (Alonso-Zaldivar, 7/11)
Stat: Trump Abandons Proposal That Would Have Ended Certain Drug Rebates
While the White House had argued eliminating rebates would result in drug manufacturers charging lower list prices, the proposal has been controversial since its unveiling in January. Drug manufacturers had largely supported it, while middlemen known as pharmacy benefit managers and insurers were vocally opposed. (Facher, 7/11)
The Washington Post: Trump Kills Key Drug Price Proposal He Once Embraced
The withdrawal of the plan is expected to put pressure on administration officials to pursue more populist proposals, from importing lower-cost drugs from other countries to basing the prices of some Medicare drugs on the lower prices paid by other countries — ideas favored by the president but reviled by the drug industry and many Republicans. It also demonstrates the internal conflicts within the administration on drug policy and the president’s tendency to flip-flop — the plan was part of his drug pricing blueprint released with fanfare a year ago. (Abutaleb, Goldstein and Parker, 7/11)
CNN: Prescription Drug Prices: Trump Drops Another Pricing Proposal After Court Blocks TV Plan
The potential impact on Medicare beneficiaries is why the administration withdrew the proposal, Health Secretary Alex Azar told reporters later on Thursday "At the end of the day, while we support getting rid of rebates, we won't put seniors at risk for premiums going up," he said. Still, he said Congress may end up addressing rebates, which have long been a controversial part of the US drug industry and are blamed for incentivizing many players to keep list prices high. "I think you will see the days of rebates are over," Azar said. (Luhby, 7/11)
Axios: President Trump Is Killing A Major Plan To Lower Drug Prices
The administration is also open to a controversial proposal being discussed in the Senate that would limit how much drug companies can increase their prices within Medicare's drug benefit. (Owens, 7/11)
Bloomberg: Trump’s Options To Cap Drug Prices Wane After Rebate Retreat
Azar sought to pass on responsibility for addressing those issues to Congress. He said lawmakers have more tools than HHS to protect seniors from rising premiums while dealing with rebates. “I think we’re going to continue to see the days of rebates are over,” he said. “We’ve changed the debate.” Senator Chuck Grassley, an Iowa Republican, said in a statement that the issue was far from dead. “The withdrawal puts even more pressure on Congress to step up to the plate,” he said. (Edney, 7/11)
The Hill: Grassley: Deal To Lower Drug Prices Moving Forward 'Very Soon'
Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said Thursday that he plans to advance a bipartisan deal to lower drug prices “very soon.” “While the final details are still being negotiated, we’re on track to report a bill out of committee very soon,” Grassley said in a statement. (Sullivan, 7/11)
Politico: Trump Leaning On Sanders-Style Ideas To Save His Drug Plan
Donald Trump’s ambitious agenda for lowering drug prices has shrunk drastically, leaving the White House dependent on Congress and an idea championed by Sen. Bernie Sanders to salvage one of his signature health care promises. ... What’s left of the biggest proposals among dozens unveiled by Trump last year is a plan to tie certain drug payments in Medicare Part B to cheaper international prices, and elsewhere, a plan to let states import medicine that is fast gaining traction. Versions of such ideas have been championed by progressives like Sanders but are loathed in the conservative movement. (Owermohle, Cancryn and Diamond, 7/11)
The Hill: White House Withdraws Controversial Rule To Eliminate Drug Rebates
The proposal had split the administration, with Health and Human Services Secretary Alex Azar championing it but other White House officials pushing back and worrying about estimates that showed it could increase Medicare spending by almost $200 billion. (7/11)
Reuters: White House Scraps Key Plan To Lower U.S. Drug Prices; May Target Drugmakers
Baird analyst Eric Coldwell said Trump was likely refocusing his reform efforts on the pharmaceutical companies themselves. "There are still many headwinds for the supply chain, but... pharma and biotech seem to have drawn the ire of the administration more recently," said Coldwell, noting the industry's successful legal challenge of a rule that would have required drugmakers to include list prices in TV ads for their medicines. (Humer and Pietsch, 7/11)
The Wall Street Journal: Insurer Relief Could Come At Pharma’s Expense
Just two days after the future of the Affordable Care Act was once again called into question, health insurers scored a big win. Investors should expect the risk of adverse regulation to shift, rather than vanish altogether. The Trump administration is withdrawing its plan to curb billions of dollars in annual rebates that drugmakers give middlemen in Medicare. Investors had worried the rule, which was to go into effect as soon as next year, would eat into the drug supply chain’s profit margins. Share prices had languished as a result. (Grant, 7/11)
CNBC: Trump Administration Drops Drug Rebate Rule Proposal. Health Stocks Soar
CVS in a statement said it is “pleased” with the administration’s move and that “any solution should start with addressing drug prices.” (LaVito, 7/11)
The Wall Street Journal: Trump Administration Drops Plan To Curb Drug Rebates
Health care remains a top concern of U.S. voters headed into the 2020 election. Taken together, the recent setbacks could leave Mr. Trump vulnerable to Democrats’ attacks that he isn’t following through on his promises to lower drug prices. Seeking to regain momentum, the Republican president sought to shift the focus last week, promising an executive order on drug pricing. He has also pledged to deliver a new GOP health plan and issued an executive order to require hospitals and doctors to better disclose pricing to patients. (Armour, 7/11)
CNBC: Big Pharma Won't Like Trump Move After Rebate Rule Abandoned, Investors Fear
The Trump administration is certainly facing difficulties in its drug price push, but it’s not a “full-on” roadblock, said Tricia Neuman, director of the Kaiser Family Foundation’s Medicare policy program. “It’s a bit too early to write the obituary,” Neuman added. “There is bipartisan support for government action in this area. Our polls show Democrats and Republicans are looking to take action.” (Lovelace, 7/11)
Stat: After Trump Pulled The Plug On Rebates, His Options To Reduce Drug Prices Narrow. And He May Need Congress
When the Trump administration rolled out its drug pricing blueprint in May 2018, framing it as its plan to make good on one of the president’s signature campaign promises, it promised to shake up how Americans pay for prescription drugs. But in May, the administration abandoned a proposal to allow private Medicare plans to refuse to pay for certain drugs in so-called “protected classes” if they spiked in price. (Joseph and Garde, 7/11)
The Wall Street Journal: Health-Care Rally Helps Lift Dow To Record Close
A rally in health-care stocks pushed the Dow Jones Industrial Average over 27000 for the first time after the Trump administration abandoned a plan to curb drug rebates. The decision canceled a proposal that would have eliminated rebates from government drug plans, easing concerns of a massive disruption to the U.S. pharmaceutical industry. Shares of UnitedHealth jumped 5.5%, leading the Dow industrials 227.88 points, or 0.8%, higher to 27088.08—its best close ever. (Wursthorn and Allen, 7/11)
