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This Week in Health Care Reform: November 10th, 2017

Priorities and alternative strategies are advanced in the ongoing effort to combat the opioid epidemic; new research shows that the majority of new drug patents are for old medicines; and, stakeholders continue to push for the elimination of the onerous health insurance tax.

Week in Review

Opioids: Earlier this week, stakeholders gathered in Washington to discuss various strategies for prevention in the escalating fight to curb opioid misuse and addiction.  At an event sponsored by inside-the-Beltway publication The Hill, perspectives were offered by featured speakers Sen. Jeanne Shaheen (D-New Hampshire), FDA Commissioner Scott Gottlieb, and a host of other voices, each representing constituencies that continue to be ravaged by the epidemic.  (Check out tweets from the Health Action Network for highlights from the discussion.)  The event represents the latest nod to the growing recognition that addressing this crisis will require coordination and cooperation from stakeholders across the health care spectrum, as well as elected officials, regulators, and community support networks.

Drug Patents: The pharmaceutical industry has long pointed to its investments in research and development as being the price of innovation when asked to defend the rising cost of prescription drugs.  However, a new study would seem to poke some holes in that argument.  In looking at the role that the patent system plays in promoting and protecting new innovations, researchers discovered that drug manufacturers were, in fact, using new patents to protect old medicines.  According to their findings, at least 74 percent of drugs associated with new patents were for treatments already on the market.  Known as “evergreening”, the practice involves extending the life of an existing patent by seeking extra protections.  A tactic, the study’s authors point out, is widespread and undoubtedly a contributing factor to escalating drug prices.

HIT Elimination:
As lawmakers continue to focus their efforts on overhauling our tax system, opponents of the health insurance tax (HIT) are urging policymakers not to overlook the harms that this tax imposes on health care consumers.  As a reminder, the HIT was established by the Affordable Care Act and is charged to health plans before eventually being passed along to hard-working middle class families, small business employers, seniors enrolled in Medicare Advantage, and Medicaid beneficiaries.  The current moratorium on the HIT expires at the end of this year, meaning that consumers will be on the hook for rising premiums in 2018.  Recent analysis pegs that increase at 2.6 percent next year, which translates into as much as $245 per person, depending on the market.  For their part, lawmakers have responded to stakeholders’ appeals to provide much-needed relief to the millions of Americans who would be forced to bear the brunt of the HIT’s reimplementation, such as Sen. Heidi Heitkamp (D-North Dakota), who last month introduced a bill that would extend the moratorium on the HIT for two years and Sen. Cory Gardner (R-Colorado), who recently took to the floor of the Senate to urge his colleagues to support the HIT delay bill he had also introduced.      

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The transition from fee-for-service to value-based reimbursement arrangements continues to reshape our health care delivery system.  This shift has resulted in the growth of alternative payment models, such as bundled payments, population-based reimbursements, and shared savings/risk arrangements.  According to recent analysis, 29 percent of all health care payments last year were made through alternative payment models, which translates into $354.5 billion.  With health care expenditures on the rise, experts point to these types of arrangements as playing a significant role in helping to reduce the cost burden for consumers and for our health care system.

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