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Biden’s big bet on antivirals
In a little-noticed regulatory move in September, the federal government moved to give pharmacists a much larger pandemic-response role — specifically, allowing them to prescribe and administer Covid-19 treatments.
Now, with Covid-19 antivirals from Pfizer and Merck on the way, the change could go a long way toward solving the biggest issue with the forthcoming rollout of those new medications: Logistics.
Even though the drugs have been cast as pandemic game-changers, my colleague Lev Facher writes this morning, basic infrastructural issues with the U.S. health system may prevent them from reaching the hands of those who need them most.
The antivirals need to be taken as soon as possible after symptom onset — ideally within three days, in many cases. But that requires four steps: Recognizing symptoms, testing positive for Covid-19, getting a prescription, and picking up the pills at a pharmacy. It’s a lot of hoops to jump through, and as a result, many public health experts are skeptical the treatments will make much of a dent in hospitalizations and deaths. The Biden administration has a plan, though: Read more here.
What does the Build Back Better Act actually mean for the health care industry?
If you’re like me you’ve spent the last several weeks so enmeshed in the day-to-day negotiations around Democrats’ signature drug pricing bill that you haven’t had the time to take a breath and actually think about what this package of policies actually means for the health care industry. Now that the House has passed their bill and has taken off for the Thanksgiving holiday, I figure it’s time to do just that. Here are a few of my biggest questions about the Build Back Better Act.
Is the Build Back Better Act a death knell for insulin makers?
Don’t count on it.
The legislation definitely takes aim at lowering insulin prices: it would let Medicare negotiate the price of any insulin, and it would require drug makers to offer the federal government at least a 60% discount off the average price they offer other drug wholesalers for the three most popular insulins. And there’s the popular $35 cap on out-of-pocket insulin costs for many patients, which my colleague Rachel has more on below.
But financial analysts and drug pricing experts guessed the policy would have a minimal impact on insulin makers’ bottom lines (though several cautioned that the exact impact of the policy will depend on how hard the federal government negotiates with insulin makers).
That’s because insulin makers already offer sizable discounts to private insurance plans that offer Medicare drug coverage. Drug makers don’t disclose the exact discounts they offer — so it’s impossible to discern the exact impact of Democrats’ bill. But insulin makers have released reports in recent years showing that the existing discounts keep growing, and that the average discounts on insulin range from 50% to nearly 80%.
Are drug makers going to stop hiking their list prices every year?
It seems likely.
Craig Garthwaite, a professor at Northwestern University, told STAT it won’t make rational sense for drug makers to hike their prices more than inflation if the Democrats’ bill passes, because of the provision that would force them to repay taxpayers all the profits they receive from raising their prices more than inflation.
But don’t expect the policy to solve all of the United States’ drug pricing problems. Garthwaite predicted that drug makers will compensate by launching new drugs at even higher prices, even if it means fewer people take those drugs. They could also try to game the system by launching new versions of drugs so that they’re not subjected to the price hike penalty.
Does Democrats’ bill hurt insurers?
It’s really hard to say.
While all of the attention has been focused on how Democrats’ plan will impact drug makers, the package also includes a massive redesign of the complicated scheme by which drug makers, seniors, the government, and insurance companies divvy up seniors’ drug costs.
The bill, for example, will require insurance plans to pick up 60% of seniors’ drug costs once seniors spend $2,000. That’s a hefty increase from the 15% of costs they used to have to cover in the so-called catastrophic coverage phase.
Already at least one insurer has hinted that such a serious increase in insurers’ costs will force them to raise their premiums.
But drug makers are still complaining that the bill doesn’t actually reform the insurance industry’s role in the U.S. drug pricing system. PhRMA lamented recently that the bill “will make a broken insurance system worse” and “doesn’t address perverse incentives in the system that are leading to higher costs for patients.”
Insulin cost protections caught in partisan crosshairs
One of Democrats’ most popular provisions in their massive social safety net package is a drug pricing policy that would cap out-of-pocket costs for insulin at $35 per month for patients on Medicare and in private insurers. But that provision is at risk of running afoul of the Senate’s strict budget rules, and Senate Majority Leader Chuck Schumer is already launching a public offensive to save it, my colleague Rachel Cohrs reports.
There are a bunch of complicated rules that govern what policy can get lumped into the streamlined budget process Democrats are using to pass legislation without GOP support — but, importantly, a provision will only get knocked out if a senator objects to it.
Schumer is hoping the insulin cap is too politically popular for even Republicans to balk, but a Republican aide has already told STAT the party sees it as their responsibility to enforce the rules, regardless of the policy merits.
Gordon Gray, the director of fiscal policy at the conservative-leaning American Action Forum, said the provision capping insulin costs in the private insurance market is likely more at risk than the Medicare policy.
Sinema on the record on drug prices
Sen. Kyrsten Sinema (D-Ariz.) is a woman of few words in public, so it’s rare to get a glimpse into her thinking on any particular policy issue. Today, we have more insight into her position on drug pricing policy in a letter that her office quietly sent to Arizona state lawmakers last week, my colleague Rachel Cohrs reports.
Sinema touts her role in negotiations, particularly taking ownership of pushing the provision mentioned above that would cap monthly costs for insulin to $35 per month — the original framework House moderates had proposed put the cap at $50 per month. She talks in glowing terms of the agreement, echoing her earlier support for the deal.
“Our agreement represents a smarter way to lower drug costs compared to earlier plans based on government price-setting for nearly every drug, which could have stifled medical innovation and reduced the development of new cures,” the letter reads.
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