Fate of Trump’s Part B drug cost plan may de­pend on Dems win­ning House

Modern Healthcare - - News - By Har­ris Meyer

THE TRUMP ad­min­is­tra­tion’s bold pro­posal to peg Medi­care Part B drug pay­ments to the much lower prices paid in other ad­vanced coun­tries sur­prised many. But vet­eran pol­i­cy­watch­ers say they’d be stunned if the plan goes any­where given pharma’s deep pock­ets, con­gres­sional Repub­li­cans’ cool­ness to the pro­posal and con­gres­sional Democrats’ skep­ti­cism.

“Pharma is one of the smartest, most so­phis­ti­cated, wealth­i­est in­dus­tries rep­re­sented in Wash­ing­ton,” said Lawrence Ja­cobs, a health pol­icy and pol­i­tics pro­fes­sor at the Univer­sity of Min­nesota. “Does the White House re­ally want to make this a fight they give blood on?”

Most ob­servers be­lieve the ad­min­is­tra­tion an­nounced Pres­i­dent Don­ald Trump’s plan less than two weeks be­fore the Nov. 6 con­gres­sional elec­tions to im­prove vot­ers’ per­cep­tions about Repub­li­can health­care poli­cies. Polls show Democrats hold a big edge on health­care is­sues.

But the com­plex pro­posal would take ef­fect in 2020 at the ear­li­est and would phase in over five years, likely fail­ing to change the cur­rent cam­paign nar­ra­tive.

“When you prom­ise to bring down prices to­mor­row, that’s one thing. But this is not a tan­gi­ble in­stant de­liv­ery,” said Thomas Miller, a con­ser­va­tive health pol­icy scholar at the Amer­i­can En­ter­prise In­sti­tute.

The plan, which won’t be is­sued as a rule un­til next spring, would move Medi­care Part B pay­ment rates for se­lected out­pa­tient drugs to rates more com­pa­ra­ble to those paid by 16 other wealthy na­tions. The U.S. would go from pay­ing 80% more than what those other coun­tries pay to 26% more. That would save more than $17.2 bil­lion over five years, a frac­tion of the nearly $19 bil­lion in Part B drug spend­ing an­nu­ally.

If adopted, the plan could open the door to sim­i­lar in­ter­na­tional ref­er­ence pric­ing for med­i­cal de­vices and other prod­ucts, as well as for pre­scrip­tion drugs in Medi­care’s Part D pro­gram, said Ger­ard An­der­son, a health pol­icy and man­age­ment pro­fes­sor at Johns Hop­kins Univer­sity. “There’s never been any­thing like that,” he said.

The pro­posal also would change how doc­tors are paid for ad­min­is­ter­ing Part B drugs, which in­clude many ex­pen­sive can­cer and arthri­tis med­i­ca­tions. They would re­ceive a flat fee, un­like the cur­rent sys­tem where they get a higher pay­ment for us­ing more ex­pen­sive drugs.

The CMS would con­tract with pri­vate-sec­tor ven­dors to pro­cure the drugs, store them, and dis­trib­ute them to providers, the­o­ret­i­cally sav­ing providers cost, has­sle and risk. These pri­vate com­pa­nies would ag­gre­gate pur­chas­ing, seek vol­ume-based dis­counts and com­pete for providers’ busi­ness.

Miller said that ap­proach could soften op­po­si­tion from on­col­o­gists and other af­fected physi­cians be­cause their bot­tom lines might not be hurt, un­like un­der the Obama ad­min­is­tra­tion’s Part B re­form pro­posal two years ago.

The Amer­i­can So­ci­ety of Clin­i­cal On­col­ogy sounded wary. “We strongly be­lieve that such a demon­stra­tion

It’s un­likely that the Trump ad­min­is­tra­tion’s com­plex drug cost plan will suc­ceed in chang­ing the cam­paign nar­ra­tive.

should be vol­un­tary so that this ap­proach can be tested and re­fined in a man­ner that best meets the needs of pa­tients,” ASCO CEO Dr. Clif­ford Hudis said in a state­ment.

The In­ter­na­tional Pric­ing In­dex model would de­pend on drug man­u­fac­tur­ers be­ing will­ing to ac­cept the lower Medi­care Part B prices, and the CMS be­ing will­ing to ex­clude their prod­ucts if they did not. Many of the drugs that would be af­fected have no com­pe­ti­tion.

“That’s how other coun­tries do it,” said John Rother, CEO of the Na­tional Coali­tion on Health­care, who for­merly headed the Cam­paign for Sus­tain­able Rx Pric­ing. “You have to be able to say no and con­di­tion mar­ket en­try on a more rea­son­able price.”

A con­sumer group lob­by­ist who didn’t want to be iden­ti­fied said his group is con­cerned about main­tain­ing ac­cess to drugs as well as low­er­ing prices. But he said it wouldn’t be easy for man­u­fac­tur­ers to walk away from the Medi­care mar­ket.

The drug in­dus­try hardly sounded re­cep­tive. “This ad­min­is­tra­tion is im­pos­ing for­eign price con­trols from coun­tries with so­cial­ized health­care sys­tems that deny their ci­ti­zens ac­cess and dis­cour­age in­no­va­tion,” the Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica said in a writ­ten state­ment.

De­spite the ob­sta­cles, po­lit­i­cal ob­servers be­lieve the ad­min­is­tra­tion’s plan could move for­ward in 2019 with the co­op­er­a­tion of Democrats if they win con­trol of at least one cham­ber of Congress in the up­com­ing elec­tions.

For now, House Mi­nor­ity Leader Nancy Pelosi and other House Democrats ques­tion whether Trump and his ad­min­is­tra­tion are se­ri­ous about ad­dress­ing high drug prices, cit­ing Trump’s re­ver­sal on his cam­paign prom­ise to have Medi­care ne­go­ti­ate drug prices.

But that could very well change af­ter the elec­tion, given Democrats’ strong in­ter­est in the is­sue. ●

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