Capitol Perspectives

The latest regulatory salvo from the Trump administration on Medicare Part D and the Democratic takeover of the House of Representatives has the pharmaceutical industry scrambling to fight a multifront war to defend market-based pricing in the United States.

Two weeks before the midterm election, the Trump administration announced a sweeping plan to subject physician-administered drugs in Medicare Part B to foreign price controls. The ANPR “demonstration project” would subject half of the country to the mandatory pricing scheme but will ripple through the entire Medicare program.

“Despite predictions that our actions would increase rates and destabilize markets, the opposite has happened,” says CMS Administrator Seema Verma.

The Trump administration disrupted the typically sleepy August recess with a frenetic release of proposals that implement components of its “Blueprint” on drug pricing. Physician and patient advocates expressed concern that these proposals may result in impaired patient access to needed drug therapy.

As the midterm elections approach, with the trajectory pointing toward increasing likelihood of the Democrats taking control of the House of Representatives and with each Trump tweet on drug pricing, a feeling of foreboding has settled over the pharmaceutical industry.

A few weeks ago, Novartis became the latest Big Pharma company to depart the antibacterial field, joining Allergan and The Medicines Company, both of which — even though they manufacture the leading critical-need products — have soured on the lousy returns related to this therapeutic area.

As Congress grapples with complex ways to provide greater care coordination for seniors with multiple chronic conditions and value-based reimbursement schemes for prescription drugs, an obvious solution is being fundamentally ignored: greater enrollment in Medicare Advantage (MA).

After months of delay and suspense, in a Rose Garden ceremony, President Trump and HHS Secretary Alex Azar announced a comprehensive approach to prescription drugs, which they claimed would address major challenges.

After passing a gargantuan appropriations bill that balloons the deficit by hundreds of billions and funds the government through October, the conventional wisdom in Washington is that Congress is done legislating for the rest of the year, save one major issue: addressing opioids.

The recent announcement of two vertical mergers ­— the $52 billion acquisition of Express Scripts, the largest pharmacy benefit manager (PBM) in the country, by Cigna, and the $69 billion purchase of Aetna by CVS Health — raise significant antitrust concerns over how these megacompanies will impact patient access and pharmaceutical pricing.

In an incredible show of profligacy, Republicans forsook any notion of fiscal conservatism by substantially increasing discretionary spending by over $2 trillion over the next decade, less than two months after cutting taxes by $1.5 trillion over that same time period.

The absurdity of the U.S. government’s perspective on the implementation of government-run health programs came into focus recently in the Republican tax overhaul bill as well as the rollout of the new Medicare physician payment system.

Pressure had been building for more than a year for something to be done about drug prices, and specifically inflated list prices to the patient at the pharmacy counter that do not reflect the substantial rebates manufacturers are providing. Where was all the money going? How could the list price and patient copays for drugs keep rising when the net prices — accounting for manufacturer rebates — stayed level?

Policymakers recently have focused on the 340B program as its size increased. Whole cottage industries have been created that instruct how hospitals and contract pharmacies can profit from the loose regulations, to the point that the drug industry can no longer overlook the market inefficiencies Yet despite several oversight hearings by the House Energy & Commerce Committee, Congress could not come to a consensus on how to reform it.