May 23, 2019 – Concern over drug pricing remains a healthcare policy issue that enjoys bipartisan support and will remain on the table for the Trump administration and Congress as campaigns for the 2020 election ramp up, according to Kate Rawson, senior editor at Prevision Policy.

Speaking at a session of the Coalition for Healthcare Communication’s Rising Leaders Conference on Healthcare Policy, held May 21-22 in Washington, D.C., Rawson noted that the White House’s push for various ideas to rein in drug pricing – combined with Democrats now controlling the House and increasing interest in the issue in the Senate – has increased the pressure for action.

“The change in control has really meant a marked change in tone for biopharma companies in the context of drug pricing,” Rawson said. “The biggest risk to pharma is that Trump and House Speaker Nancy Pelosi will make a deal on drug pricing that the president can then get the Dems and the Republicans to sign onto. The question is whether the Republicans, especially in the Senate, would want to give Democrats this win. It makes any meaningful drug pricing legislation really unlikely” before 2020, she predicted.

That said, she does believe that incremental drug pricing measures may move forward in 2019. Although the Trump administration’s May 2018 “blueprint” for addressing the drug pricing issue includes a long list of measures, the few concrete actions that have been taken thus far include:

• A Centers for Medicare & Medicaid Services (CMS) drug price “dashboard” to publicize both bad actors and those adopting responsible behavior on prescription drug prices.
• A CMS letter to pharmacy benefit managers telling them to not enforce prohibitions on pharmacists presenting lower-cost options to patients (lifting the “gag rule”).
• “Name and shame” – FDA to “publicly identify” manufacturers that game the patent system by blocking access to generic samples.

“These were small, symbolic steps, but as we have … seen, small symbolic steps really matter, especially to those of you in this room.” A fourth measure taken by the administration is a CMS final rule due to take effect in July 2019 that requires manufacturers to include the wholesale acquisition cost of drugs in direct-to-consumer (DTC) ads on television.

“I think we could all agree that the legal basis [for the DTC price disclosure rule] is dubious and I would also argue that the price impact is also negligible,” Rawson said. However, “it has bipartisan support. I’m sorry, but I know I ‘m not the first person to tell you this: everyone seems to hate DTC.”

Rawson commented that “in many respects, this DTC disclosure rule remains kind of a good fight for industry to lose. It’s high-profile, but it has a low impact on actual pricing, and while industry would probably prefer not to disclose what its prices are in TV ads, and there are certainly some First Amendment issues that can’t be ignored, industry can take some solace in the fact that this rule allowed HHS to show some credibility in addressing prices without embracing more populist ideas like direct price negotiation or importation.”

Although the DTC ad price disclosure rule seemed to sail through despite 147 public comments, CMS’  “Medicare Advantage and Part D Drug Pricing Final Rule,” which codifies formulary tools previously provided in guidance (including the above-mentioned “gag” rule), was finalized May 16 (and published today in the Federal Register) without any of the originally proposed changes regarding the six “protected classes,” which included removing from protected classes any drug that had price increases above inflation or any drug that was a reformulation of an off-patent drug.

Rawson described the Part D final rule as “a complete and total surrender on the part of the [Department of Health and Human Services (HHS)], which is great news for pharma.” This rule “was not well-received on Capitol Hill,” she said. “When HHS Secretary Alex Azar went to the Hill to talk about the HHS budget, he got a lot of blowback on the rule.”

Further, the decision to drop the Part D proposed changes “is important, because it’s a sign that HHS is taking seriously the feedback on its pricing proposals and not just pushing them through to fulfill some checklist from its drug pricing blueprint. It’s also an important signal to Democrats on the Hill that the Department is listening, because the protected class changes probably elicited the most forceful pushback.”

Rawson predicted that the Rising Leaders attendees could soon expect to see from HHS a Medicare Part D Rebate Rule (capping out-of-pocket costs for seniors), as well as a Medicare Part B Reference Pricing demonstration project; although she noted that both are unpopular on the Hill and could be de-prioritized or dropped, she stated that the rebate rule was more likely to move forward than the reference pricing initiative.

She also stated that the Affordable Care Act “was the election issue that won the Democrats the House, and one of the priorities will be protecting pre-existing conditions,” so that will continue to be discussed  in 2019, along with drug pricing and possibly some form of “Medicare for All.” In the meanwhile, she informed those attending the Coalition conference that they should expect drug pricing hearings in both the House and the Senate to continue.

To view Rawson’s Rising Leaders Conference slides, go to the Resources tab above.