News & Views: 2/16 - 2/22

February 23, 2021

The Congressional Budget Office (CBO) published their cost estimate for the House Committee on Energy and Commerce’s reconciliation recommendations.

The new CBO report estimates that removing Medicaid rebate caps will save $15.9 billion over the next ten years. By eliminating the 100% cap, the provision’s savings will be used to pay for COVID related relief and the expansion of Medicaid programs, also included in the reconciliation. This estimate is similar to previous reports CBO has released on Medicaid rebates. The report does note that future drug price growth remains unknown and may impact the score. To read the full report, click here.

The Congressional Budget Office (CBO) released a comparative analysis of brand name drug prices across federal programs.

The report explains how prices are decided in each program where the federal government is the purchaser, including the DoD, the VA, Medicaid, and Medicare Part D. CBO also examined the top 176 best-selling drugs in Medicare Part D and analyzed how the average prices differed across the programs. The report found that the average price ranged from $118 in Medicaid programs and $343 in Medicare Part D, both DoD and the VA were in between that range. The difference between Medicaid and Medicare Part D for specialty drugs grew even further, in Medicaid the average price was $1,889 and in Medicare Part D it was found to be $4,293. To read the full report, click here.

A federal judge dismissed the 340B program case regarding drug manufacturers’ refusal to offer discounts at contract pharmacies.

The judge decided that the case must go through the administrative dispute process before it is heard in court. The plaintiffs, including AHA and 340B Health, have posted press releases continuing to urge HHS to enforce drug companies to participate in the program. To read the dismissal, click here.

  • To review 340B Health’s press release on the decision, click here.

Senators Marsha Blackburn (R-TN) and Mike Braun (R-IN) have legislation for increased transparency of PBMs.

The Pharmacy Benefit Managers Accountability Study Act of 2021 will require the GAO to investigate PBMs for the Senate Finance Committee and HELP Committee, so they are able to make recommendations on how to lower drug prices based on the findings. Specifically, the GAO will investigate how PBMs manage rebates and any fees associated with them. The Senators introduced the same bill in 2019, but it did not leave the HELP Committee, so it is unclear if anything will come of their 2021 attempt. To review the press release, click here.

State lawmakers in Hawaii, Maine, and Washington introduced legislation to limit drug price increases.

The legislation allows states to fine large drug manufacturers if they raise prices significantly without any clinical justification. States will use ICER’s annual report that analyzes drug prices and in-state sales data to determine if a manufacturer should be fined based on the amount the price increase. Other states have recently introduced legislation to create drug pricing advisory boards, but this is expected to be a cheaper alternative. To read to entire article, click here.

PhRMA used recently published hospital pricing information to report that the hospitals, along with the 340B program, are the cause of high drug prices.

On January 1st, hospitals began making pricing information public on their websites and their pharmaceutical costs were among the first to be analyzed. PhRMA has recently called out hospitals for marking up drug prices an average of 2.5 times the price. AHA has since pointed out that the PhRMA report focuses on commercially insured patients, where the profit margin needs to be greater to make up for the loss from Medicare patients, where the profit margin is closer to 5%. To read the full article, click here.

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