Capitol Perspectives

As the impeachment trial of President Donald Trump dragged into the latter half of the second week, the wheels of healthcare policy development have ground to a halt.

Hours after the House of Representatives impeached President Donald J. Trump, it passed a gargantuan omnibus appropriation package costing $1.4 trillion in 2020 that continues the bipartisan unravelling of the Affordable Care Act (i.e., Obamacare) by repealing three taxes critical to its financing: the “Cadillac tax” on high-cost insurance plans, the medical device excise tax, and the health insurance tax. Together, their repeal costs the federal government $373.3 billion in lost revenue over the next 10 years according to the Joint Committee on Taxation.

Despite Speaker Pelosi’s partisan approach to prescription drug pricing legislation, the building blocks for bipartisan consensus on a redesign of Medicare Part D’s outpatient drug benefit are being laid for a possible deal in Q1 of 2020.

Red flags have gone up regarding the vast overreach of Speaker Pelosi’s sweeping bill (H.R. 3), raising concerns that its key provisions that would enable the government to dictate prescription drug prices may be deemed unconstitutional.

Speaker Nancy Pelosi (D-CA) unveiled her long-awaited, sweeping “Lower Drug Costs Now Act of 2019” (HR 3) that would establish price controls for up to 250 branded drugs, not just for government programs, but for all commercial contracts as well!

Stepping back from the political hyperbole driving the prescription-drug debate is that American taxpayers, patients, and employers spend far more on hospitals than pharmaceuticals. Yet hospitals receive very little scrutiny of their escalating costs.

No one is arguing that enacting price controls in Medicare Part D means they would be applicable in nongovernment commercial contracts. But requiring rebates for price increases that exceed an arbitrary index obviously is a price control in Medicare.

The concept known as “arbitration” to resolve billing disputes between out-of-network providers and insurers on surprise medical bills could spell doom for the pharmaceutical industry if it is cross-walked into the prescription-drug debate.

New challenges have emerged regarding Medicare Part D which require a fundamental re-examination and modernization of the program.

A plethora of proposals are currently under consideration to wring resources out of the pharmaceutical industry, but no amount of money extracted from the life sciences sector can right-size the fundamental imbalance between the federal government’s financial obligations and taxpayers resources to finance those promises.

What is the policy problem driving the populist agenda to slash pharmaceutical spending? Answer: Rising list prices and patient out-of-pocket spending.

As Congress debates partisan issues such as “Medicare for All” where private health insurance would be outlawed, troubling trends are emerging on healthcare provider consolidation that are driving up costs.

Despite mounting evidence that pharma costs have flattened recently, the industry, during recent hearings, took licks from members on both side of the aisle in the divided Congress.

The 116th Congress convened under the shadow of a partial government shutdown with Republicans handing the gavel to newly elected Speaker Nancy Pelosi (D-CA). House Democrats have made it clear that healthcare will be a key priority, second only to investigating the Trump administration.