Value Report: December 23, 2020
As we mentioned last week, this is our final official issue of 2020. (The annual “predictions” edition will be coming your way next week.) Even as we are glad to see this year conclude, we are grateful for your readership, for the scholarship of the researchers whose work we often cite, and for the journalists who cover health care all over the globe. We wish you the happiest of holidays and as much New Year’s celebration as is pandemically appropriate.
Pricing Politics: The 202 is Closing the Book on 2020
The Centers for Medicare & Medicaid Services (CMS) issued a final rule that makes it easier for states, private payers and manufacturers to implement value-based payment strategies for expensive gene and cell therapies.
The rule, much of which takes effect in January 2022, broadens the definition of Medicaid best price and allows manufacturers to report multiple best prices when offering value-based agreements to states. CMS Administrator Seema Verma noted that reporting requirements around Medicaid best price “have not been updated in thirty years and are thwarting innovative payment models,” while the National Association of Medicaid Directors warned the rule “would greatly favor manufacturers over states.”
he rule also stipulates that any manufacturer copay discounts are excluded from Medicaid best price calculations only if they help patients directly, not just lowering costs for payers and pharmacy benefit managers. This piece of the rule will be delayed until 2023.
Congress finally passed a second COVID-19 stimulus, which in addition to including stimulus checks and a ban on surprise medical billing, also creates new transparency provisions requiring payers to provide annual reports on pharmacy benefits and drug costs. It seems likely the reports will not have much impact beyond creating potential “headline-risk” around the biennial reports released on drug pricing trends. According to STAT, generic and biosimilar drug makers are the biggest industry winners, having managed to block inclusion of a proposed law that would have toughed up FDA exclusivity rules.
The Trump administration finalized its rule yesterday requiring community health centers to pass 340B discounts for insulin and EpiPens to patients. InsideHealthPolicy reports that of the president’s four most recent drug pricing orders, this rule is the most likely to take effect. Critics say the policy would make more of an impact if it was broadened to apply to 340B hospitals rather than merely limited to federally qualified health centers.
What We’ll Miss
Because we won’t review next week’s news into well into 2021, we wanted to flag a couple of items that may break during your holiday merriment:
- The “Most-Favored Nations” Rule: It’s slated to go into effect on New Year’s Day. It probably won’t, with a legal decision slamming the breaks likely to hit before you hear reindeer on your roof.
- Jan. 1 Price Hikes. As much a part of the turning of the calendar as the Times Square ball drop, drug price hikes will go into effect as we ring in 2021. We expect to see the usual rush of low-context news coverage, too.
Global News: Canadian Drug Prices Rise
Canada’s drug spending is increasing. A new report by Canada’s Patented Medicines Prices Review Board finds that prescription drug costs rose by 5.6% between 2018 and 2019 – largely due to the use of high-cost drugs – while generic substitution helped lower costs by 6.2%. Drug spending in Canada now tops $12.1 billion.
A pro-reimportation group in the U.S. says prescription drugs cost 50% to 90% less in online Canadian pharmacies compared to AmazonPharmacy, GoodRx and traditional retail pharmacies in the U.S. The Campaign for Personal Prescription Information said Americans can on average save $245 a month if they use online Canadian pharmacies, or $648 a month if costs exceed $300.
In the States: More PBM Fighting in Ohio
Advocacy groups across Ohio have created the “PBM Accountability Project,” a pro-PBM regulation coalition. The organization includes local groups, such as the Ohio Bleeding Disorders Council and Charitable Healthcare Network of Ohio, and national organizations, including Anthem (which notably has its own PBM) and “America’s Agenda,” an alliance that includes PhRMA and Kaiser Permanente. We can expect to hear more updates on the group’s activity from The Columbus Dispatch, which has consistently paid close attention to the PBM regulation fight.
- One of our team’s biggest happy hour debate involves whether pharma’s reputation will get a boost from the truly amazing, once-in-a-lifetime science that the industry has generated. Here is the pro-reputational-boost argument: FiercePharma: Expect more pharma corporate campaigns in 2021 as the industry leverages its COVID-19 halo.
- Starting next year, HIV drugs such as Truvada and Descovy will be covered by most health plans without patient cost sharing. Los Angeles Times: Rule changes make HIV prevention drugs more accessible.
- If 2020 was all about vaccine science, 2021 will be all about vaccine access. Buckle up. Reuters: Production and delivery challenges set up turbulent Year of the Vaccine.
- Questionable idea, fun read: STAT: Let the ultra-rich and influential skip the line for Covid-19 vaccines? Hear me out.
- Big questions loom in 2021: will biopharma keep moving to diversify its supply chain? Does that mean more manufacturing in the United States? And what might that mean for pricing? Fierce Pharma tries to answer the first two questions, anyway: A new administration is taking the White House – will the ‘onshore’ drug manufacturing movement keep building?
- It’s the law, folks: there has to be a 340B dispute story in every edition of the Value Report. AIDS Healthcare Foundation (press release): AHF to HRSA: Reject Kalderos’ Plan to Hurt 340B Drug Discount Program.
- ICER’s Sarah Emond suggests that COVID-19 proves that pharma can develop medicines faster, cheaper and better than industry has let on. Is she trolling us? You be the judge: California Health Care Foundation: Has COVID-19 Changed Prescription Drug Pricing Forever?
- It is the firm position of the Value+Access Communications practice that the only Martin Shkreli-related journalism we want to see involves the government’s plan for releasing Once Upon a Time in Shaolin. That said: Elle: The Journalist and the Pharma Bro.