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This Week in Health Care Reform: November 30th, 2018

Stakeholders ramp up their collective efforts to protect consumers from the return of an onerous tax; new rules are proposed giving Medicare plans greater negotiating power on drugs; and, Americans are still struggling with out-of-control Rx costs, even as drugmakers tighten their grip on the health care economy.

Week in Review

Stopping the HIT: Stakeholders continue to focus their collective efforts on protecting consumers from the rising costs that will result should lawmakers fail to extend the suspension of the health insurance tax (HIT) beyond 2019, after which time, a one-year moratorium is slated to expire.  As it stands, the HIT’s scheduled to return in 2020, threatening to burden hard-working families, seniors enrolled in Medicare Advantage plans, Medicaid beneficiaries, and small businesses with increased health care costs.  Earlier this year, lawmakers in the House of Representatives successfully passed a legislative package that, among other priorities, included further extension of the HIT delay through 2021.  While their Senate counterparts have yet to take up their own version of that bill, with lawmakers wrapping up their legislative business during the current lame duck, stakeholders have mobilized, urging elected officials to include further extension of the HIT delay in their year-end dealings.

Medicare Rules: This past Monday, the Administration proposed new rules aimed at tackling the rising cost of drugs in the Medicare program.  Specifically, the proposal, released by the Centers for Medicare & Medicaid Services (CMS), would allow insurers participating in Medicare Advantage and the Part D prescription drug program authority to exclude certain drugs, from six previously protected classes, should those medicines undergo price increases greater than inflation, or if a new drug formulation fails to cross the “significant innovation” threshold over the original product.  Using tools such as step therapy and prior authorization, the proposed rule could save taxpayers as much as $692 million over the next decade.  CMS also announced it was considering implementing a policy that would ensure enrollees pay the lowest possible price for their drugs at the pharmacy counter.  That proposal, which could go into effect as early as 2020, could result in savings of $12 to $15 billion over a four-year period.

Rx Cost Struggles: New survey results serve as a grim reminder of how much Americans continue to struggle with unsustainable drug price increases.  Conducted by GoodRx, an organization that aggregates and analyzes drug pricing data, their analysis found that more than 2-out-of-5 survey respondents said that paying for their medicines in the past year was difficult.  Even more alarmingly, one-third said they didn’t fill at least one of their prescriptions this past year as a result of drug costs.  The results of the survey were released in the wake of pharmaceutical manufacturer Pfizer’s recent announcement that it would be raising the prices on 41 of its prescription drugs in January

Drugmakers' Grip:
An alarming new analysis puts a fine point on the disproportionate influence that drug manufacturers continue to wield over our larger heath care spending.  While hospitals and physicians continue to make up the bulk of that spend, pharmaceutical companies walk away with significantly more profit than any other part of the health care industry.  In the third quarter of this year, ten companies were responsible for half of that industry’s $50 billion of global profit.  Nine of the ten at the top of that list are drugmakers.  Perhaps, then, it should come as no surprise to find that these drug giants move in near-perfect synchronization when it comes to raising the prices of their products, a pattern that’s only been reinforced in recent years.      

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