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This Week in Health Care Reform - April 24th, 2015

Drug prices are poised to dominate the health care discussion in the near- and long-term; support for the health care law crosses an important threshold; thousands sign up for health coverage during the special enrollment period; and, a bill to repeal a harmful tax reaches a crucial milestone.


Week in Review

Hyperinflation: An issue that’s been building steam in recent years is the rising price of prescription drugs.  The release of Gilead’s hepatitis C treatment, Sovaldi, last year, forced the discussion front-and-center owing to the pharmaceutical manufacturer’s decision to price the drug at $1,000-a-pill.  What at the time represented an outrageous outlier in specialty drug pricing now seems to have been more a bellwether for an unsustainable trend that’s found its way into other drug classes and threatens to overwhelm our health care system entirely.   A new study published in JAMA Oncology underscores this threat, examining the pricing rationale that drug makers have long offered up when defending their prices – namely, that their medications are not only costly to develop, but more effective and safer than previously available treatments.  The study took a closer look at 51 cancer drugs approved by the FDA between 2009 and 2013, ultimately concluding that there was no significant relationship between cost and benefits, their results suggesting instead that the current pricing models “simply reflect what the market will bear.”  A new white paper released by the Campaign for Sustainable Rx Pricing (CSRxP) this week hammers home this point, citing the hyperinflation seen in the annual price increases in the specialty drug market as being far in excess of general inflation.  And, lest we think the issue has yet to gain traction with decision-makers, the rising cost of prescription drugs is shaping up to be one of the main topics of discussion driving the health care reform discussion heading into the next election year.

ACA Polling: For the first time in more than two years, the number of Americans who support the Affordable Care Act outnumber those who oppose it.  In its latest Health Tracking Poll, the Kaiser Family Foundation reported that 43 percent of respondents held a favorable view of the health care law, as opposed to the 42 percent reporting the opposite.  While the split reinforces just how divisive the law continues to be, its overall favorability continues to show signs of improvement, especially when compared to how Americans viewed the law in the wake of its flawed rollout in late 2013. 

It was reported on Monday that nearly 70,000 people had signed up for health insurance during the soon-to-close special enrollment period extended to those discovering that they owed a fee when filing their taxes for having previously failed to secure coverage.  This being the first year that the Affordable Care Act’s individual mandate went into effect, opponents were critical of the fact that open enrollment on the exchanges closed a full two-months before the tax filing deadline, leading to the special enrollment period, which has essentially served as something of a tax season grace period for Americans to purchase health care coverage. 

It was announced this week that the House bill to repeal the harmful health insurance tax hit a crucial milestone, reaching 218 cosponsors (with a little bipartisan support).  The proposed legislation, introduced by Reps. Charles Boustany (R-Louisiana) and Kyrsten Sinema (D-Arizona), now enjoys majority support in the House.  Similar amendments are being considered in the Senate offered up by Sens. John Barrasso (R-Wyoming), Orrin Hatch (R-Utah), and Pat Roberts (R-Kansas).

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Looking Ahead

With the Supreme Court’s decision in the King v. Burwell case challenging the tax subsidies extended to Americans through the federally-run exchange looming on the horizon, expert analysis is already underway mapping out how and where the ruling could affect the health care law’s implementation.  Meanwhile, the head of the IRS told lawmakers at a hearing last week that his agency has no backup plan if the subsidies are ultimately stuck down. 

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