Polling data leading into the mid-term elections consistently ranked healthcare reform as a top priority for voters. That said, reforming healthcare has a different meaning for different people. Some want to ensure their pre-existing condition won’t prevent them from having coverage if they lose or change jobs. For others, affordability is a problem, and even that comes in different forms, such as affordability of premiums, deductibles, hospital stays, procedures, or drug prices. And for others still, reform would bring more convenient access to care. The disparity of what voters want in reform is best illustrated by the challenges that even a unified Congress have had in passing any healthcare bill.
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While Republicans, Democrats, and so-called moderates disagree on how to proceed with the Affordable Care Act, everyone does seem to find common ground in drug price transparency.
Last month, Congress passed, with bipartisan support, the “Know the Lowest Price Act,” which bans gag clauses in the Medicare Part D program, and the “Patient’s Right to Know Act,” which bans gag clauses for commercial insurance. A gag clause is a contractual obligation between a pharmacy benefit manager (PBM) or a health plan and a pharmacy that prevents the pharmacy from disclosing to a patient that they could save money by paying a lower cash price for their drugs rather than the insurance cost sharing amount.
Neither of these bills requires pharmacy benefits managers, health plans or pharmacists to share alternative payment information proactively, nor will they make drug prices more publicly available. They do prevent the practice of making it a contractual obligation to withhold this information. The bill regulating commercial insurance is effective now; the legislation regulating Medicare Part D doesn’t take effect until January 2020.
The real effect on patients’ pocket books following passage of these laws remains to be seen. Several states have already passed laws addressing gag clauses and pharmacies have refused to sign such contracts. But Senator Susan Collins, a co-sponsor of the Patient’s Right to Know Act, cited an industry survey revealing that “20 percent of pharmacists were limited by gag clauses more than 50 times per month” as one indicator of need for this reform.
The bills also gained support from a cross-section of health advocates including the ERISA Industry Committee, the National Community Pharmacists Association, the American Medical Association, the Alliance for Transparent and Affordable Prescriptions and the Pharmaceutical Care Management Association.
Can We Expect Mandated Drug Price Relief and Competition?
While Republicans and Democrats generally disagree on what to do with individual mandates and pre-existing conditions, there does appear to be common ground on continued pharmaceutical price reform. Recently, President Trump gave public remarks promising the first step in bringing Medicare drug reimbursement in line with what consumers in other countries pay for the same drugs by establishing an international pricing index as a benchmark for reimbursing drug costs in Medicare Part B, the Medicare program that covers medically necessary and preventative services for Medicare patients.
The President hinges his plan on evidence that U.S. consumers pay 180 percent more than consumers in the international market for the 27 most frequently prescribed drugs. Using rule-making authority with the Center for Medicaid and Medicare Innovation, these new rules will be subject to public comment and take effect late 2019 or early 2020.
Notably, a similar reform was offered by the Obama administration. The proposal was ultimately withdrawn in the face of opposition from a broad range of stakeholders including healthcare providers, pharmaceutical companies, and lawmakers from both parties. But that was a different President and a different Congress. This President has time and again demonstrated that he won’t succumb to industry pushback.
For now, it appears that we can expect drug prices and pharmaceutical companies to be the extent of legislative changes to healthcare. For any more substantial reforms, the White House will have to continue to use Executive Action or rely on court rulings to change existing policy.
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