Pharmaceutical & Life Sciences News

Capsule: Drug Chain Pain, Misleading Marketing & Federal Funds

April 12, 2019, 9:51 AM

Welcome to Capsule—your weekly dose of health-care news, where we give you a recap of this week’s highs and lows for key players in the industry. You can expect us every Friday morning as a bookend for your week.

As the U.S. inches toward the 2020 presidential election, expect the debate surrounding Medicare for All to heat up. I know it doesn’t seem possible that the temperature could rise given the controversy to date, but you can bet there will be more nit-picking on specifics as candidates introduce and support individual bills.

In the meantime, let’s soak up the 571 days of (relative) rest we have before we have to make a decision.

Here’s who ended the week on a high note:

Short-Term Plan Skeptics

  • State insurance regulators are on the prowl for misleading marketing about short-term health insurance plans that don’t cover all the essentials required under the Affordable Care Act, Sara Hansard reports.
  • State regulators are examining the advertising of these plans as industry observers predict a jump in their sales. The plans typically don’t cover pre-existing conditions or include comprehensive benefits, as plans are required to do under the ACA.
  • Democrats in the meantime are pushing to scale back those types of plans, Hansard writes. Legislation that would re-establish restrictions on short-term plans advanced out of committee and is being teed up for a full House vote.
  • Obamacare is also gaining unlikely allies, Lydia Wheeler reports. Conservatives who don’t like the law are asking a court to keep it in place and just address the constitutionality of the part that imposed financial penalties on people who don’t buy health insurance.

Medicaid Work Horses

  • The federal government is trying to overturn decisions blocking Kentucky and Arkansas from requiring some Medicaid recipients to work, Mary Anne Pazanowski reports.
  • The U.S. Court of Appeals for the District of Columbia Circuit now will review the decisions, which are seen as a blow to the Trump administration.
  • So far, 15 states including Michigan, Ohio, and Virginia have asked the HHS to approve new Medicaid work rules, according to data compiled by the Kaiser Family Foundation, a health research group.

Community Pharmacies

  • Individual pharmacies could dodge thousands of dollars in after-the-fact fees from drug intermediaries as part of a final rule under review at the White House, Madison Alder writes.
  • On average, the fees charged to community pharmacies after the transactions with patients cost $100,000 a year per each pharmacy, National Community Pharmacists Association CEO B. Douglas Hoey told Alder.
  • Community pharmacies said the fees damage their bottom line without lowering the prices patients pay. The final version of the rule that would cut out those fees was sent to the White House for review last week. That’s the last step before publication.

It was a bleak week for others. Here’s whose Thursday closed on a downswing:

Medicare’s Budget

  • The cost for 22 drugs shot up more than 500 percent per dose from 2013 through 2017, according to a Bloomberg Law analysis of Medicare Part D data recently released by the federal government.
  • The data show that a relatively small percentage of drugs make up a disproportionate share of the spending totals for Medicare Part D. For example, 77 drugs out of the nearly 2,900 covered under Medicare’s primary prescription plan were responsible for slightly more than half of total spending in 2017, according to the analysis.
  • That means the federal government’s drug budget is being drained thanks to roughly 2 percent of the drugs covered in Medicare Part D. The government is the largest drug purchaser in the U.S., but it can’t seem to stem the spending. Madi Alexander, Alex Ruoff and I break down the trends here.

Abortion Access

  • Alex Ebert tracked state legislation related to abortion access, and he found state legislatures introduced more than 170 bills restricting abortion in 2019. These types of bills are flying through GOP-controlled state legislatures at a time when advocates are looking for a case that could overturn the constitutional right to abortion nationwide.
  • An anti-abortion advocate says the legislative groundswell is a direct response to the appointments of Justices Neil Gorsuch and Brett Kavanaugh to the U.S. Supreme Court.
  • Meanwhile, the federal government is arguing it should be allowed to enforce new rules prohibiting health-care providers that receive federal family planning program money from discussing abortion with their clients, Mary Anne Pazanowski reports.

Drug Supply Chain Links

  • Executives from the most prominent drug middlemen were pulled in to testify before Congress this week. It resulted in two U.S. Senators asking the Inspector General of the Health and Human Services Department to investigate a practice by pharmacy-benefit managers known as spread pricing, Anna Edney and Robert Langreth of Bloomberg News write.
  • Several states are also probing pharmacy-benefit managers’ business practices in government-sponsored health programs, adding to the scrutiny the middlemen face in Washington for their role in the cost of drugs, Langreth reports.
  • Insulin manufacturers are a primary target in the larger debate on drug prices because of substantial price increases for the medicine and the fact that diabetes sufferers can’t live without it. I break down some of they key questions surrounding insulin here.

Thanks for joining us this week and have a great weekend. I’m all ears when it comes to your 2 cents, tips, critiques, or coordinating exclusive interviews. Send them my way at jlee1@bloomberglaw.com.

To contact the reporter on this story: Jacquie Lee in Washington at jlee1@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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