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News & Views: 1/5 - 1/11

January 12, 2021

Top Democratic House Committee leaders wrote a letter urging the Trump administration to rescind the unlawful rule allowing states to leave the exchange program.

The letter specifically calls out a proposed change that would allow states to use private brokers to enroll in health insurance, rather than the centralized exchange program. The members claim that the “proposal is reckless, harmful, and a blatant violation of federal law. [They] strongly urge the Administration to withdraw these policies and to instead put forward proposals that safeguard, rather than jeopardize, access to healthcare.” While the Biden administration has announced they will temporarily freeze any rule not yet in effect, proponents of this specific rule are urging President Trump to withdraw the regulation, so that they can more easily revise t rather than starting over. To read the full letter click here.

  • To read the House Committee on Energy and Commerce press release, click here.

The Biden administration continues to add drug pricing experts to his administration.

The President-Elect previously named CA Attorney General Xavier Becerra to be his HHS Secretary. It was recently announced that Becerra, who has a history of fighting against drug manufacturers, will be joined by NV state Senator Yvanna Cancela. While it is unclear what official role Cancela will have, she has worked extensively on drug pricing reform in Nevada. Most notably, she sponsored a bill to discourage insulin price increases by requiring the manufacturer to disclose extensive information on their profits and production costs, which has since been expanded to all drugs in Nevada. To read the full article, click here.

The Biden administration can make a significant impact on the patent industry, even without Congress’s support.

In the past two years of the Trump administration, the Patent and Trademark Office (PTO) have decreased how many secondary drug patents are rejected by 25%. This is due, in part, because examiners are given bonuses based on how quickly they can get through patent applications, encouraging them to rush through approving patents that should be denied. However, executive action can ensure that only valid patent applications are approved. A recent report estimated that spending an additional $20 million (less than 1% of the PTO’s 2021 budget) on funding examiners for secondary drug patents would save more than $1 billion a year by increasing generic competition and lowering drug prices. To read the entire article, click here.

CMS has approved Tennessee’s request for modified Medicaid block grants that will create a closed formulary.

The closed formulary gives power to the state to exclude certain prescription drugs from being covered if they are deemed to be too expensive by regulators. CMS has received comments voicing concern that PBMs will be less generous to the Medicaid program under this new ruling, but CMS has insisted that the state will have increased oversight to ensure beneficiaries have access to all necessary medications. To read the full article, click here.  

  • To read CMS’ approval letter, click here.

The Pharmacy Benefit Management Institute (PBMI) released their report on how to solve America’s high drug cost problem.

The report briefly explains how prices are set before discussing the ways drug manufacturers keep prices high and undermine PBM management. Finally, the report summarizes policy solutions that could be implemented to lower drug spending and out-of-pocket costs for patients, including increasing market competition and allowing Medicare to negotiate with manufacturers. To read the full report, click here.

Associate professor of Law at Washington University in St. Louis, Rachel Sachs, highlighted key prescription drug policy changes from 2020 and what to watch this year in a Health Affairs blog post.

While COVID-19 took precedence over most other policy work, there were a few key drug reforms passed in 2020 in addition to the EUAs for COVID therapeutics. Notably, Texas v. Azar going to the Supreme Court. While the Court has not issued a ruling yet, it is likely that most of the ACA will be protected. The post also looks into executive and legislative change that the new administration and congress are likely to work towards, such drug pricing reform, the FDA’s public trust, and state level pricing reform. To read the full post, click here.

The Executive VP of Kaiser Family Foundation, Larry Levitt, commented on Biden’s potential for a significant amount of executive action on healthcare in a recent JAMA forum post.

The post includes many campaign proposals made from the Biden team, however chief among them is drug pricing reform. Levitt commented that Biden may use the Center for Medicare and Medicaid Innovation (CMMI) to control drug prices and allow the government to negotiate prices with manufacturers soon after he takes office. He continued that the CMMI has been underutilized in the past but has incredible potential to be used in new ways for health care reform. To review the full article, click here.

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