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	<title>Drug Prices &#8211; Policy &amp; Medicine</title>
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	<title>Drug Prices &#8211; Policy &amp; Medicine</title>
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		<title>The Limits of Prescription Drug Affordability Review Boards</title>
		<link>https://www.policymed.com/2025/01/the-limits-of-pdabs.html</link>
					<comments>https://www.policymed.com/2025/01/the-limits-of-pdabs.html#respond</comments>
		
		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Mon, 20 Jan 2025 09:44:23 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[State Policy]]></category>
		<category><![CDATA[340B Covered Entities]]></category>
		<category><![CDATA[affordability challenges]]></category>
		<category><![CDATA[Drug Affordability Reviews]]></category>
		<category><![CDATA[Drug Cost Reduction]]></category>
		<category><![CDATA[Drug Cost Review]]></category>
		<category><![CDATA[drug price negotiation]]></category>
		<category><![CDATA[Drug Pricing]]></category>
		<category><![CDATA[Drug Supply Chain]]></category>
		<category><![CDATA[Healthcare Cost Savings]]></category>
		<category><![CDATA[healthcare policy]]></category>
		<category><![CDATA[Healthcare Regulations]]></category>
		<category><![CDATA[Healthcare Stakeholders]]></category>
		<category><![CDATA[Maryland PDAB]]></category>
		<category><![CDATA[Medicaid Supplemental Rebates]]></category>
		<category><![CDATA[Oregon PDAB]]></category>
		<category><![CDATA[Patient Access to Care]]></category>
		<category><![CDATA[Patient Advocacy Groups]]></category>
		<category><![CDATA[PDAB]]></category>
		<category><![CDATA[Pharmaceutical Manufacturers]]></category>
		<category><![CDATA[Pharmaceutical Pricing Regulation]]></category>
		<category><![CDATA[pharmacy benefit managers]]></category>
		<category><![CDATA[Prescription Drug Affordability]]></category>
		<category><![CDATA[retail pharmacies]]></category>
		<category><![CDATA[State Prescription Drug Affordability Review Boards]]></category>
		<category><![CDATA[UPLs]]></category>
		<category><![CDATA[upper payment limits]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=17398</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" fetchpriority="high" srcset="https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77.jpg 1200w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-450x300.jpg 450w" sizes="(max-width: 1200px) 100vw, 1200px" /></div>We’ve previously written about state prescription drug affordability review boards (PDABs) that have been instituted around the country, often with the intent to review higher-cost prescription drugs and determine whether the state should take action to reduce those drug prices. While PDAB boards vary throughout the country in what they are permitted to do, PDABs [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" srcset="https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77.jpg 1200w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2023/01/stencil.default-77-450x300.jpg 450w" sizes="(max-width: 1200px) 100vw, 1200px" /></div><p>We’ve previously written about state prescription drug affordability review boards (PDABs) that have been instituted around the country, often with the intent to review higher-cost prescription drugs and determine whether the state should take action to reduce those drug prices. While PDAB boards vary throughout the country in what they are permitted to do, PDABs may attempt to reduce drug prices by performing affordability reviews, making recommendations to each state’s respective legislature on ways to reduce spending, negotiating prices and Medicaid supplemental rebates with manufacturers, and setting upper payment limits (UPLs) or caps on what a state will spend on a particular medication.</p>
<p>However, as PDABs continue to grow in popularity, it turns out their goals may not be reached as planned. Oregon, for one, found that drug pricing and complexities in the supply chain may limit implementation of its proposed upper payment limits. The State of Oregon Department of Consumer and Business Services, Division of Financial Regulation published a <a href="https://dfr.oregon.gov/pdab/Documents/OR-PDAB-UPL-Report-Draft-20240821.pdf">Constituent Group Engagement Report</a> based on the perspectives of seven constituent groups, (1) 340B Covered Entities, (2) carriers, (3) hospitals, (4) patient advocacy groups, (5) pharmaceutical manufacturers, (6) pharmacy benefit managers (PBMs), and (7) retail pharmacies.</p>
<p>The report found that while constituents were generally concerned about drug affordability, perceptions regarding using UPL to lower prices were mixed. More than half of respondents felt that UPLs woul dnot result in cost savings, and 47% were concerned that a UPL would have a negative financial impact on their organization. Additionally, 54% of respondents expressed their belief that a UPL would actually create challenges to patient access to care, with 47% of respondents expressing the belief that a UPL would have a neutral impact on patients’ ability to afford their medications and 26% expressing the belief a UPL would have a negative impact on patients’ ability to afford their medications.</p>
<p>The Oregon PDAB also conducted focus groups with constituent groups, with similar results to the report findings. Of note, the focus group participants were not in agreement as to the definition of affordability (or how it should be determined) and were uncertain about how to assess the impact of a possible UPL.</p>
<p>Despite concerns coming out of Oregon, Maryland recently moved forward with approving an <a href="https://pdab.maryland.gov/Documents/UPL%20Action%20Plan.2024.08.30.1745.pdf">Action Plan</a> for the state’s PDAB to use to reduce costs of medications in the state that pose an “affordability challenge,” including approval of the implementation of a UPL. The Maryland Action Plan also allows the state’s PDAB to begin the policy review process once it has been found that use of a drug has led – or will lead – to an affordability challenge. The policy review process is done in three phases: (1) information gathering, (2) preliminary policy recommendations, and (3) policy approval.</p>
<p>Maryland’s PDAB started with eight drugs to conduct a “cost review” to understand whether use of the drug has led – or will lead – to affordability challenges. If found to meet the requisite criteria, those drugs may be some of the first drugs subject to a UPL.</p>
<p>Over the course of time, we will see more data as to whether PDABs are achieving the goals they were set to achieve.</p>
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		<title>CMS Readies for Round Two of Drug Price Negotiations</title>
		<link>https://www.policymed.com/2024/12/cms-readies-for-round-two-of-drug-price-negotiations.html</link>
					<comments>https://www.policymed.com/2024/12/cms-readies-for-round-two-of-drug-price-negotiations.html#respond</comments>
		
		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Fri, 27 Dec 2024 09:39:05 +0000</pubDate>
				<category><![CDATA[CMS]]></category>
		<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[2025 Medicare Negotiations]]></category>
		<category><![CDATA[Counteroffers]]></category>
		<category><![CDATA[drug manufacturers]]></category>
		<category><![CDATA[drug price negotiation]]></category>
		<category><![CDATA[drug prices]]></category>
		<category><![CDATA[drug pricing transparency.]]></category>
		<category><![CDATA[healthcare policy]]></category>
		<category><![CDATA[Healthcare Stakeholders]]></category>
		<category><![CDATA[Inflation Reduction Act]]></category>
		<category><![CDATA[Medicare beneficiaries]]></category>
		<category><![CDATA[Medicare Drug Negotiations]]></category>
		<category><![CDATA[medicare part D]]></category>
		<category><![CDATA[Medicare Prescription Drug Coverage]]></category>
		<category><![CDATA[Medicare Price Fairness]]></category>
		<category><![CDATA[Medicare Transaction Facilitator]]></category>
		<category><![CDATA[MFP Payments]]></category>
		<category><![CDATA[Negotiation Process]]></category>
		<category><![CDATA[Patient Feedback]]></category>
		<category><![CDATA[Patient-Focused Roundtables]]></category>
		<category><![CDATA[pharmaceutical companies]]></category>
		<category><![CDATA[pharmaceutical pricing]]></category>
		<category><![CDATA[Pharmacy Concerns]]></category>
		<category><![CDATA[Prescription Drug Affordability]]></category>
		<category><![CDATA[Prescription Drug Law]]></category>
		<category><![CDATA[Price Negotiation Program]]></category>
		<category><![CDATA[Public Data Submission]]></category>
		<category><![CDATA[Therapeutic Alternatives]]></category>
		<category><![CDATA[Town Hall Meetings]]></category>
		<category><![CDATA[Unmet Medical Needs]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=17390</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" srcset="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg 1200w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-450x300.jpg 450w" sizes="(max-width: 1200px) 100vw, 1200px" /></div>Recently, the Centers for Medicare and Medicaid Services (CMS) issued guidance on the second round of the drug price negotiation program, launched as part of the Inflation Reduction Act. The first round of negotiations for the first set of drugs ended in August 2024 and the new prices are set to go into effect on [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg 1200w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div><p>Recently, the Centers for Medicare and Medicaid Services (CMS) <a href="https://www.hhs.gov/about/news/2024/10/02/hhs-releases-final-guidance-second-cycle-historic-medicare-drug-price-negotiation-program.html">issued guidance</a> on the second round of the drug price negotiation program, launched as part of the Inflation Reduction Act. The first round of negotiations for the first set of drugs ended in August 2024 and the new prices are set to go into effect on January 1, 2026.</p>
<p>This new round of negotiations will focus on selecting fifteen drugs for negotiation, with new prices going into effect on January 1, 2027. For this second round of negotiations, the drugs will be selected by February 1, 2025. Additionally, during this round CMS will work with a Medicare Transaction Facilitator whose goal is to ensure fair prices for Medicare beneficiaries and pharmacies. The participation by drug manufacturers is voluntary.</p>
<p>This year’s negotiation process will be similar to last year’s process. This time, however, CMS will <a href="https://www.cms.gov/files/document/fact-sheet-medicare-drug-price-negotiation-program-ipay-2027-final-guidance-and-mfp-effectuation.pdf">allow for additional offers</a> and counteroffers if CMS rejects the first offer of the manufacturer. CMS is making this change in hopes of “opportunities for productive exchanges between CMS and participating drug companies throughout the negotiations period.” To that end, CMS is revising the timing of negotiation meetings so that the first optional negotiation meeting will happen after the initial offer is issued but before the statutory due date for participating drug companies that elect to submit statutory written counteroffers. If CMS rejects a written counteroffer, the agency will allow for up to two more optional negotiation meetings.</p>
<p>Under the guidance released by CMS, drug companies, health plans, pharmacies, and mail order services are instructed to follow price requirements in January 2026 and beyond using the Medicare Transaction Facilitator.</p>
<p>CMS plans to hold up to fifteen patient-focused roundtables and one town hall meeting to solicit clinical and patient feedback regarding the selected drugs, on top of monthly technical calls for pharmacies, Part D plans, and pharmaceutical companies. In addition, CMS is inviting the public to submit data by March 1, 2025, regarding patient experiences with the conditions or diseases treated by the selected drugs or experiences taking the selected drugs (and therapeutic alternatives to selected drugs), prescribing information for selected drugs (and therapeutic alternatives), and/or information on the extent to which the selected drugs address an unmet medical need.</p>
<p>Additionally, CMS has established a process for pharmacies to self-identify if they anticipate material cash flow concerns at the start of the initial price applicability year due to reliance on retrospective maximum fair price (MFP) refunds within the 14-day prompt MFP payment window. CMS would provide that information to participating drug companies to inform the development of their MFP effectuation plans.</p>
<p>Looking forward, February 1, 2025, is the deadline for CMS to publish the list of up to 15 drugs selected for negotiation and February 28, 2025, is the deadline for participating drug companies to sign agreements to participate in the Negotiation Program for applicability year 2027. March 1, 2025, is the deadline for participating drug companies to submit manufacturer-specific data to CMS for consideration in the negotiation process as well as the deadline for public to submit data and comments. Throughout Spring 2025, CMS will host the roundtable and town hall events and June 1, 2025, is the deadline for CMS to send the initial offer of a maximum fair price for a selected drug, with a concise justification, to each participating drug company. From there, the negotiation process will begin and October 31, 2025, is the deadline for participating drug companies to accept or reject the final maximum fair price offer from CMS as on November 1, 2025, the negotiation period ends.</p>
<p>“We are continuing to implement the prescription drug law thoughtfully, prioritizing engagement with all interested parties, and ensuring the process is as transparent and inclusive as possible,” <a href="https://www.hhs.gov/about/news/2024/10/02/hhs-releases-final-guidance-second-cycle-historic-medicare-drug-price-negotiation-program.html">said Meena Seshamani, M.D., Ph.D.</a>, deputy administrator for CMS, in a statement. “As we approach the second cycle of negotiations, we continue to focus on ensuring people with Medicare prescription drug coverage have access to the innovative cures and therapies they need at prices they can afford.”</p>
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		<title>Minnesota&#8217;s 340B Program Report Sheds Light on Potential Abuses and Sparks Call for Reforms</title>
		<link>https://www.policymed.com/2024/12/minnesotas-340b-program-report-sheds-light-on-potential-abuses-and-sparks-call-for-reforms.html</link>
					<comments>https://www.policymed.com/2024/12/minnesotas-340b-program-report-sheds-light-on-potential-abuses-and-sparks-call-for-reforms.html#respond</comments>
		
		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Mon, 02 Dec 2024 09:04:47 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[Drug Shortages]]></category>
		<category><![CDATA[HHS]]></category>
		<category><![CDATA[340B ACCESS Act]]></category>
		<category><![CDATA[340B program]]></category>
		<category><![CDATA[charity care]]></category>
		<category><![CDATA[Drug Pricing]]></category>
		<category><![CDATA[for-profit intermediaries]]></category>
		<category><![CDATA[Healthcare Reform]]></category>
		<category><![CDATA[healthcare transparency]]></category>
		<category><![CDATA[legislative reforms]]></category>
		<category><![CDATA[Minnesota Department of Health]]></category>
		<category><![CDATA[NEW]]></category>
		<category><![CDATA[non-profit hospitals]]></category>
		<category><![CDATA[pharmaceutical profits]]></category>
		<category><![CDATA[policy analysis]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=17374</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="618" height="340" src="https://www.policymed.com/wp-content/uploads/2024/11/pharmacy-counter.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/11/pharmacy-counter.jpg 618w, https://www.policymed.com/wp-content/uploads/2024/11/pharmacy-counter-300x165.jpg 300w" sizes="auto, (max-width: 618px) 100vw, 618px" /></div>The Minnesota Department of Health recently unveiled a pivotal report on the 340B drug pricing program, which provides insight into how the program&#8217;s financial benefits are being utilized by non-profit hospitals and clinics. The 340B program was originally designed to help these facilities purchase medications at significantly reduced prices to support patient care for the [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="618" height="340" src="https://www.policymed.com/wp-content/uploads/2024/11/pharmacy-counter.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/11/pharmacy-counter.jpg 618w, https://www.policymed.com/wp-content/uploads/2024/11/pharmacy-counter-300x165.jpg 300w" sizes="auto, (max-width: 618px) 100vw, 618px" /></div><p>The Minnesota Department of Health recently unveiled a <a href="https://www.health.state.mn.us/data/340b/docs/2024report.pdf">pivotal report on the 340B drug pricing program</a>, which provides insight into how the program&#8217;s financial benefits are being utilized by non-profit hospitals and clinics. The 340B program was originally designed to help these facilities purchase medications at significantly reduced prices to support patient care for the underserved, the 340B program appears to be exploited for substantial financial gains that do not align with its intended goals.</p>
<p><strong>Background and Implementation of the 340B Program</strong></p>
<p>The 340B program was enacted in 1992 as part of the Public Health Service Act. It was intended to enable non profit healthcare organizations that serve high volumes of low-income patients to extend their federal resources further, enhancing access to affordable medications. Over time, eligibility for the program has expanded to include a variety of health care entities, fostering a broader reach but also complicating oversight and accountability.</p>
<p><strong>Findings from the Minnesota Department of Health Report</strong></p>
<p>The <a href="https://www.health.state.mn.us/data/340b/docs/2024report.pdf">investigation conducted by the Minnesota Department of Health</a> was motivated by growing concerns that some participating entities might be leveraging the pricing benefits for profit rather than improving patient care. Here are the key findings from the report:</p>
<ol>
<li><strong>Profit Generation</strong>: Non-profit hospitals and clinics in Minnesota have reportedly made an estimated $630 million in profits from medications purchased under the 340B program. This figure is considered conservative, given the incomplete data reported by many entities, particularly in the area of provider-administered drugs.</li>
<li><strong>Charity Care and Profit Use</strong>: The report highlights a significant discrepancy between the profits generated from the program and the level of charity care provided. There is concern that these profits are not being used to support care for low-income and uninsured patients, undermining the program&#8217;s foundational objective.</li>
<li><strong>Role of For-Profit Intermediaries</strong>: The involvement of for-profit entities such as pharmacies, Pharmacy Benefit Managers (PBMs), and other intermediaries has diverted approximately $120 million from this safety-net program. This diversion raises serious questions about the program&#8217;s integrity and effectiveness in serving needy communities.</li>
<li><strong>Data Gaps and Reporting Shortcomings</strong>: Many hospitals and clinics failed to report comprehensive data, especially concerning high-cost provider-administered medications. This underreporting prevents a full understanding of the extent of profit generation and the overall impact of the program.</li>
</ol>
<p><strong>Implications and Recommended Reforms</strong></p>
<p>The Minnesota report underscores an urgent need for enhanced transparency and stricter oversight to ensure the 340B program fulfills its original purpose. Recommendations for reform include:</p>
<ul>
<li><strong>Stricter Reporting Requirements</strong>: Implementing more rigorous data submission guidelines to ensure all participating entities provide complete and accurate information.</li>
<li><strong>Reevaluation of Participant Eligibility</strong>: Assessing whether current participants are in alignment with the goals of the 340B program, potentially revising eligibility criteria to prevent abuse.</li>
<li><strong>Directing Benefits to Patient Care</strong>: Ensuring that profits derived from the program are explicitly reinvested into community health and patient care services, particularly for the underserved.</li>
</ul>
<p>The findings from the Minnesota Department of Health are a call to action for policymakers, healthcare providers, and stakeholders to engage in a dialogue about refining the 340B program. With the introduction of legislative reforms such as the <a href="https://www.congress.gov/bill/118th-congress/house-bill/8574/text">340B ACCESS Act,</a> there is an opportunity to restore the program&#8217;s integrity and maximize its benefits for the vulnerable populations it was designed to serve. As this situation unfolds, it is crucial for all involved to prioritize transparency, accountability, and the true spirit of the 340B program.</p>
<p>Additional Resources</p>
<p><a href="https://www.health.state.mn.us/data/340b/docs/2024report.pdf">Minnesota Report to Legislature on 340B program</a></p>
<p><a href="https://www.congress.gov/bill/118th-congress/house-bill/8574/text">340B Access Act</a></p>
<p>&nbsp;</p>
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		<title>CMS Releases Prices for Inflation Reduction Act Drug Price Negotiation Program</title>
		<link>https://www.policymed.com/2024/10/cms-releases-prices-for-inflation-reduction-act-drug-price-negotiation-program.html</link>
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		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Wed, 23 Oct 2024 08:15:15 +0000</pubDate>
				<category><![CDATA[CMS]]></category>
		<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[2026 drug prices]]></category>
		<category><![CDATA[CMS drug price negotiation]]></category>
		<category><![CDATA[CMS drug selection]]></category>
		<category><![CDATA[drug price comparison]]></category>
		<category><![CDATA[healthcare policy]]></category>
		<category><![CDATA[Inflation Reduction Act]]></category>
		<category><![CDATA[international drug prices]]></category>
		<category><![CDATA[Maximum Fair Price]]></category>
		<category><![CDATA[medicare part D]]></category>
		<category><![CDATA[Medicare savings]]></category>
		<category><![CDATA[NEW]]></category>
		<category><![CDATA[pharmaceutical negotiations]]></category>
		<category><![CDATA[prescription drug discounts]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=17165</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg 1200w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div>On Thursday, August 15, 2024, the Centers for Medicare &#38; Medicaid Services (CMS) released the prices for the first 10 prescription drugs selected for negotiation with manufacturers under the Inflation Reduction Act of 2022 Medicare drug price negotiation program. The negotiation program allows CMS to directly negotiate drug prices for certain high expenditure, single source [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558.jpg 1200w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2023/10/stencil.default-2023-10-23T201605.558-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div><p>On Thursday, August 15, 2024, the Centers for Medicare &amp; Medicaid Services (CMS) released the prices for the first 10 prescription drugs selected for negotiation with manufacturers under the Inflation Reduction Act of 2022 Medicare drug price negotiation program. The negotiation program allows CMS to directly negotiate drug prices for certain high expenditure, single source Medicare Part B and Part D drugs on an escalating scale. CMS announced the ten Part D Selected Drugs for the initial price applicability year 2026 in August of 2023. The negotiated prices range from 38% to 79% discounts off the 30-day supply list prices. <a href="https://www.cms.gov/newsroom/press-releases/negotiating-lower-drug-prices-works-saves-billions">In a press release</a>, CMS commented that if the new prices had been in effect last year, Medicare would have saved an estimated $6 billion, or approximately 22%, across the 10 selected drugs.</p>
<p><strong>More on Negotiations</strong></p>
<p>In January 2024, CMS and the manufacturers of the 10 Part D Selected Drugs began the price negotiations process, with negotiations concluding earlier this month. CMS took into consideration information provided by manufacturers when determining the new discounted prices, which included research and development costs, prior federal financial support, unit costs of production and distribution, and market/revenue/sales data.</p>
<p>The program establishes price negotiations with CMS to obtain a Maximum Fair Price (MFP). The MFP must be set at no more than 40-75% of the lower of (a) the drug’s non-Federal average manufacturer price for the year 2021, (b) the drug’s non-Federal average manufacturer price for the year prior to selection, or (c) the average sales price or wholesale acquisition cost for the year prior to selection. The program requires the final MFP for drugs selected for the first year of the program be published by September 1, 2024.</p>
<p>Next, CMS has until March 2025 to publish an explanation for the negotiated prices for each selected drug that go into effect on January 1, 2026. By February 2025, CMS will select up to 15 more drugs covered under Part D for negotiations for 2027. Drug manufacturers will have until the end of that month to decide whether to participate in the negotiation program. Following the second round of price negotiations, CMS may negotiate prices for another 15 drugs that will go into effect in 2028, and then another 20 drugs that will go into effect in 2029.</p>
<p><strong>United States Still Pays More</strong></p>
<p>Interestingly, a report recently came out indicating these negotiated prices for prescription drugs are still on average more than double, and in some cases five times, what drugmakers have agreed to in four other high-income countries. <a href="https://www.reuters.com/world/us/us-will-still-pay-least-twice-much-after-negotiating-drug-prices-2024-09-03/">A Reuters review</a> of publicly available maximum prices set by other wealthy nations &#8211; Australia, Japan, Canada and Sweden &#8211; show that they have negotiated far lower prices for the same drugs.</p>
<p>As described in the Reuters article, <a href="https://www.rand.org/pubs/research_reports/RRA788-3.html">a study by the non-profit RAND</a> looking at 2022 prescription prices found that health plans in the United States paid more than three times as much for brand-name pharmaceuticals, even after estimated discounts. Studies have shown that faster uptake of new and more expensive drugs helps drive U.S. prices, while other high-income countries directly footing the bill for healthcare place tighter restrictions on prescriptions</p>
<p>The willingness of the U.S. to pay up for drugs also contributes to lower overseas prices, said Richard Frank, director of the Brookings Institution&#8217;s Center on Health Policy, quoted in the Reuters article.</p>
<p>&#8220;If you&#8217;ve got one of your buyers who&#8217;s willing to cover your sunk costs, plus some of your ongoing costs,&#8221; selling more volume to others, even at lower prices, can still be profitable, he said.</p>
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		<title>The Inflation Reduction Act (IRA) and Its Broader Impact on Innovation, Access, and Affordability in Healthcare</title>
		<link>https://www.policymed.com/2024/10/the-inflation-reduction-act-ira-and-its-broader-impact-on-innovation-access-and-affordability-in-healthcare.html</link>
					<comments>https://www.policymed.com/2024/10/the-inflation-reduction-act-ira-and-its-broader-impact-on-innovation-access-and-affordability-in-healthcare.html#respond</comments>
		
		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Mon, 21 Oct 2024 08:01:48 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[Pharmacy]]></category>
		<category><![CDATA[biologic drugs]]></category>
		<category><![CDATA[biopharmaceutical industry]]></category>
		<category><![CDATA[Biosimilars]]></category>
		<category><![CDATA[cardiovascular disease treatments]]></category>
		<category><![CDATA[chronic conditions]]></category>
		<category><![CDATA[Daniel O’Day]]></category>
		<category><![CDATA[drug cost containment]]></category>
		<category><![CDATA[drug formulary changes]]></category>
		<category><![CDATA[drug price negotiation]]></category>
		<category><![CDATA[drug pricing transparency.]]></category>
		<category><![CDATA[generic drugs]]></category>
		<category><![CDATA[healthcare affordability]]></category>
		<category><![CDATA[healthcare innovation]]></category>
		<category><![CDATA[healthcare policy]]></category>
		<category><![CDATA[high-rebate drugs]]></category>
		<category><![CDATA[Inflation Reduction Act]]></category>
		<category><![CDATA[Medicare beneficiaries]]></category>
		<category><![CDATA[medicare part D]]></category>
		<category><![CDATA[Medicare Prescription Payment Plan]]></category>
		<category><![CDATA[NEW]]></category>
		<category><![CDATA[oncology drugs]]></category>
		<category><![CDATA[out-of-pocket drug costs]]></category>
		<category><![CDATA[patient access barriers]]></category>
		<category><![CDATA[PBM reform]]></category>
		<category><![CDATA[pharmaceutical R&D]]></category>
		<category><![CDATA[PhRMA media briefing]]></category>
		<category><![CDATA[price-setting mechanisms]]></category>
		<category><![CDATA[Robert Davis]]></category>
		<category><![CDATA[senior medication access]]></category>
		<category><![CDATA[small molecule drugs]]></category>
		<category><![CDATA[Steve Ubl]]></category>
		<category><![CDATA[Sue Peschin]]></category>
		<category><![CDATA[Ted Okon]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=17194</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="814" height="538" src="https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2.jpg 814w, https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2-300x198.jpg 300w, https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2-768x508.jpg 768w" sizes="auto, (max-width: 814px) 100vw, 814px" /></div>On October 8, 2024, PhRMA held a media briefing to address growing concerns over the Inflation Reduction Act (IRA) and its effects on the biopharmaceutical industry, Medicare Part D beneficiaries, and future drug innovations. Leading the discussion were Steve Ubl, President and CEO of PhRMA; Daniel O’Day, Chairman and CEO of Gilead Sciences; Robert Davis, [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="814" height="538" src="https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2.jpg 814w, https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2-300x198.jpg 300w, https://www.policymed.com/wp-content/uploads/2024/10/empty-pharmacy-shelves-v2-768x508.jpg 768w" sizes="auto, (max-width: 814px) 100vw, 814px" /></div><p>On October 8, 2024, PhRMA held a media briefing to address growing concerns over the Inflation Reduction Act (IRA) and its effects on the biopharmaceutical industry, Medicare Part D beneficiaries, and future drug innovations. Leading the discussion were Steve Ubl, President and CEO of PhRMA; Daniel O’Day, Chairman and CEO of Gilead Sciences; Robert Davis, Chairman and CEO of Merck; Sue Peschin, President and CEO of the Alliance for Aging Research; and Ted Okon, Executive Director of the Community Oncology Alliance. Together, these industry leaders provided critical insights into how the IRA may reduce access to medications for seniors while simultaneously undermining long-term biopharmaceutical innovation.</p>
<p><strong>Impact on Medicare Part D: Less Access, Higher Costs</strong></p>
<p>Steve Ubl opened the briefing by emphasizing the unintended consequences the IRA is already having on Medicare Part D, the program designed to help seniors afford prescription drugs. According to Ubl, while the IRA was intended to reduce costs, it has done the opposite for many seniors. The law’s provisions are expected to result in significant premium increases, reduced plan choices, and higher out-of-pocket costs for many beneficiaries.</p>
<p>One of the most alarming projections is that seniors may see a 25% reduction in available Medicare Part D plans—the lowest point in the program&#8217;s history. This reduction limits choices for seniors, making it more difficult for them to find plans that cover their necessary medications at reasonable prices. Further compounding the issue, Ubl noted that deductibles in some plans could rise from $0 to as much as $600 per year, creating an additional financial burden. Worse, many seniors may end up paying more for fewer medications, as 89% of insurers and PBMs have indicated they will cover fewer drugs and employ more aggressive utilization management tools, such as step therapy and prior authorization, in response to the IRA.</p>
<p>Additionally, the briefing highlighted how the IRA’s impact on drug formularies could severely limit access to essential medications. Seniors, particularly those managing chronic conditions, may find that their medications are either removed from coverage or placed in higher-cost tiers, leading to higher co-pays and restricted access to treatments they’ve relied on for years. This is particularly concerning for seniors taking medications for chronic conditions like heart disease, cancer, or diabetes—populations that are especially vulnerable to changes in their Part D plans.</p>
<p><strong>The IRA’s Chilling Effect on Innovation</strong></p>
<p>Both Daniel O’Day of Gilead Sciences and Robert Davis of Merck focused on the IRA’s long-term impact on pharmaceutical innovation. They voiced concerns that the law could hinder the development of new therapies, especially small molecule drugs, which play a critical role in treating diseases like cancer, HIV, and mental illness.</p>
<p>O’Day emphasized that groundbreaking innovations, such as Gilead&#8217;s recent breakthrough in HIV prevention—a drug that achieved 100% efficacy after 17 years of research—are only possible with a robust intellectual property (IP) system that allows companies to recoup their investments. However, under the IRA, small molecule drugs face government price-setting mechanisms four years earlier than biologic drugs, potentially shortening the window in which pharmaceutical companies can earn a return on their significant R&amp;D investments. This discrepancy could lead to fewer investments in small molecule drugs, a category of treatments that are often more affordable and scalable for large populations, including underserved communities.</p>
<p>Robert Davis echoed these sentiments, adding that many oncology drugs require long-term clinical trials, often taking more than a decade to develop and receive full approval. For instance, Merck’s Keytruda, a leading cancer therapy, continues to undergo research to expand its indications even 10 years after its initial approval. These long-term projects require sustained investment, which may no longer be feasible if price controls are implemented too early in a drug’s lifecycle. Davis warned that the biopharmaceutical industry might increasingly shift its focus away from small molecules, which could limit future treatments for conditions that rely on these types of therapies, including various forms of cancer and cardiovascular disease.</p>
<p><strong>The Need for PBM Reform</strong></p>
<p>In addition to the concerns about innovation and access, Ted Okon and Sue Peschin underscored the necessity for Pharmacy Benefit Manager (PBM) reform. PBMs act as intermediaries between drug manufacturers and insurers, often determining which drugs are covered by insurance plans and how much patients pay at the pharmacy counter. Okon pointed out that PBMs have a significant financial incentive to prioritize higher-cost, rebated drugs over more affordable generics, driving up costs for both patients and the healthcare system.</p>
<p>Ted Okon highlighted that without substantial PBM reform, the biopharmaceutical market will continue to be distorted in favor of more expensive drugs, reducing the availability of lower-cost generics and biosimilars. He advocated for reforms that would de-link PBM compensation from drug list prices, thereby eliminating the incentive for PBMs to favor high-rebate, high-cost drugs. According to Okon, this change is essential for making drugs more affordable and for ensuring that seniors and patients with chronic conditions can access the medications they need without being subjected to unnecessary barriers like step therapy or prior authorization.</p>
<p>Sue Peschin also emphasized the importance of PBM reform, particularly in the context of the Medicare Part D program. With the IRA shifting financial responsibilities onto Part D plans, PBMs are expected to play an even larger role in determining patient access to medications. This could lead to increased use of utilization management tools, making it more difficult for patients to access the treatments they need. Peschin stressed that Congress must enact reforms that bring transparency and accountability to PBM practices, ensuring that patients, not PBMs, benefit from the savings generated in the healthcare system.</p>
<p><strong>Medicare Part D Reforms: A Mixed Bag</strong></p>
<p>While the IRA includes some positive changes, such as capping out-of-pocket drug costs for Medicare beneficiaries at $2,000 annually starting in 2025, Sue Peschin highlighted the need to ensure that seniors are fully informed about these changes. Many beneficiaries remain unaware of the upcoming reforms, and Peschin urged healthcare professionals, policymakers, and the media to help spread the word.</p>
<p>Additionally, Peschin outlined a new benefit known as the Medicare Prescription Payment Plan (MP3), which will allow beneficiaries to spread their out-of-pocket costs over the course of the year in interest-free installments. This plan is designed to make prescription drugs more affordable for seniors on fixed incomes. However, Peschin cautioned that there are several logistical hurdles to accessing this program—beneficiaries must sign up with their Part D plan in advance of picking up their prescriptions, and failure to do so could result in missed opportunities to manage their costs more effectively.</p>
<p><strong>The Path Forward: Balancing Innovation, Affordability, and Access</strong></p>
<p>As the biopharmaceutical industry grapples with the far-reaching consequences of the IRA, the need for a balanced approach to healthcare reform becomes increasingly apparent. Industry leaders, patient advocates, and healthcare professionals agree that while cost-containment is necessary, it must not come at the expense of innovation and patient access. Steve Ubl urged policymakers to prioritize reforms that lower out-of-pocket costs for patients while ensuring that the U.S. healthcare system continues to incentivize innovation. The introduction of PBM reforms, greater transparency in drug pricing, and policies that align with patient needs, such as the Medicare Prescription Payment Plan, offer a path forward for achieving these goals.</p>
<p>PhRMA and other stakeholders have stated they are committed to working with Congress and the Administration to address the unintended consequences of the IRA. With bipartisan support for PBM reform and growing recognition of the need to protect pharmaceutical innovation, there is an opportunity to shape a healthcare system that is more equitable, affordable, and innovative for all.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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		<title>Congressional Budget Office Releases: Alternative Approaches to Reducing Prescription Drug Prices</title>
		<link>https://www.policymed.com/2024/10/congressional-budget-office-releases-alternative-approaches-to-reducing-prescription-drug-prices.html</link>
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		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Thu, 10 Oct 2024 08:06:36 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[DTC]]></category>
		<category><![CDATA[Bernie Sanders]]></category>
		<category><![CDATA[commercial drug importation]]></category>
		<category><![CDATA[Congressional Budget Office]]></category>
		<category><![CDATA[Direct to Consumer Advertising]]></category>
		<category><![CDATA[drug price transparency]]></category>
		<category><![CDATA[drug pricing complexity.]]></category>
		<category><![CDATA[drug pricing reform]]></category>
		<category><![CDATA[generic and biosimilar market entry]]></category>
		<category><![CDATA[healthcare cost containment]]></category>
		<category><![CDATA[healthcare policy]]></category>
		<category><![CDATA[inflation rebates]]></category>
		<category><![CDATA[insurance coverage]]></category>
		<category><![CDATA[international benchmarking]]></category>
		<category><![CDATA[market exclusivities]]></category>
		<category><![CDATA[Medicare drug price negotiation]]></category>
		<category><![CDATA[NEW]]></category>
		<category><![CDATA[pharmaceutical innovation]]></category>
		<category><![CDATA[pharmacy benefit managers]]></category>
		<category><![CDATA[prescription drug costs]]></category>
		<category><![CDATA[regulatory challenges]]></category>
		<category><![CDATA[U.S. pharmaceutical industry]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=17179</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="628" height="694" src="https://www.policymed.com/wp-content/uploads/2024/10/CBO-Drug-Market-Illustration.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/10/CBO-Drug-Market-Illustration.jpg 628w, https://www.policymed.com/wp-content/uploads/2024/10/CBO-Drug-Market-Illustration-271x300.jpg 271w" sizes="auto, (max-width: 628px) 100vw, 628px" /></div>As healthcare costs soar, the Congressional Budget Office (CBO) has recently shed light on a hot political issue: the perceived high cost of prescription drugs in the United States. Their latest report, published in October 2024, meticulously analyzes various policy measures aimed at curbing these costs. The Core Problem Prescription drug pricing remains a critical [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="628" height="694" src="https://www.policymed.com/wp-content/uploads/2024/10/CBO-Drug-Market-Illustration.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/10/CBO-Drug-Market-Illustration.jpg 628w, https://www.policymed.com/wp-content/uploads/2024/10/CBO-Drug-Market-Illustration-271x300.jpg 271w" sizes="auto, (max-width: 628px) 100vw, 628px" /></div><p>As healthcare costs soar, the <a href="https://www.cbo.gov/publication/58793">Congressional Budget Office (CBO)</a> has recently shed light on a hot political issue: the perceived high cost of prescription drugs in the United States. Their <a href="https://www.cbo.gov/system/files/2024-10/58793-rx-drug-prices.pdf">latest report</a>, published in October 2024, meticulously analyzes various policy measures aimed at curbing these costs.</p>
<p><strong>The Core Problem</strong></p>
<p>Prescription drug pricing remains a critical political issue, impacting the financial well-being of millions. The CBO&#8217;s report underscores a complex interplay of market exclusivities, competition, and regulatory measures that set the stage for current drug prices. As detailed, these factors, including exclusive sales rights and insurance coverage, significantly insulate consumers from direct costs, affecting drug price sensitivity and market dynamics.</p>
<p><strong>Policy Approaches and Their Implications</strong></p>
<p>The report discusses seven main policy strategies that according to the Congressional Budget Office could potentially lead to lower prescription drug prices. These include setting maximum allowed prices based on international benchmarks, expanding Medicare drug price negotiation capabilities, and enforcing inflation rebates in the commercial sector.   The CBO admitted that most of these recommendations would reduce drug prices by less than 1% point with international reference pricing potentially reducing prices by up to 5%.  We will go into detail on each of the seven proposed strategies.</p>
<ol>
<li><strong> Setting Maximum Allowed Prices Based on International Prices</strong></li>
</ol>
<p style="padding-left: 40px;"><strong>Mechanism:</strong> This approach proposes setting a price ceiling for drugs in the U.S. based on the average prices in certain reference countries. <strong>Impact:</strong> Expected to result in substantial price reductions by aligning U.S. drug prices with lower international levels. The strategy targets single-source brand-name drugs, using a weighted average based on GDP per capita of the reference countries. This strategy is expected to result in a <strong>large reduction</strong> in drug prices, potentially reducing prices by more than 5%. The significant reduction comes from setting price caps based on the lower prices available in foreign markets.  <strong>Challenges:</strong> Potential pushback from pharmaceutical companies, which might delay launches in reference countries or exit markets to avoid setting lower price benchmarks.</p>
<ol start="2">
<li><strong> Expanding the Medicare Drug Price Negotiation Program</strong></li>
</ol>
<p style="padding-left: 40px;"><strong>Mechanism:</strong> Currently, Medicare is limited in its ability to negotiate drug prices. This proposal would expand the scope, allowing Medicare more freedom to negotiate prices for a broader range of drugs. <strong>Impact:</strong> Anticipated to yield moderate price reductions by leveraging Medicare&#8217;s purchasing power according to CBO estimates:</p>
<ul>
<li style="list-style-type: none;">
<ul>
<li><strong>Increasing the number of drugs whose prices get negotiated each year</strong> could lead to a very small (0.1% to 1%) or small (1% to 3%) reduction.</li>
<li><strong>Making negotiated prices available to all commercial purchasers</strong> could result in a small reduction, typically in the range of 1% to 3%.</li>
</ul>
</li>
</ul>
<p style="padding-left: 40px;"><strong>Challenges:</strong> Could lead to pharmaceutical companies setting higher initial prices or reducing discounts to offset the impact of broader negotiations.</p>
<ol start="3">
<li><strong> Requiring Manufacturers to Pay Inflation Rebates for Commercial Sales</strong></li>
</ol>
<p style="padding-left: 40px;"><strong>Mechanism:</strong> This strategy would extend the existing requirement for inflation rebates in Medicare Part D to the commercial market, ensuring that drug price increases do not exceed inflation. <strong>Impact:</strong> Expected to lead to modest price reductions by directly linking price increases to inflation rates. This approach would likely result in a very small reduction in prices, between 0.1% to 1%. While it aims to introduce more competition, the actual impact on overall market prices might be limited. <strong style="text-transform: initial;">Challenges:</strong><span style="text-transform: initial;"> Implementation complexity and potential unintended consequences like companies increasing initial launch prices.</span></p>
<ol start="4">
<li><strong> Allowing Commercial Importation of Prescription Drugs</strong></li>
</ol>
<p style="padding-left: 40px;"><strong>Mechanism:</strong> Facilitates the importation of approved drugs from international markets where they may be cheaper. <strong>Impact:</strong> This approach would likely result in a very small reduction in prices, between 0.1% to 1%. While it aims to introduce more competition, the actual impact on overall market prices might be limited.</p>
<p style="padding-left: 40px;"><strong>Challenges:</strong> Safety and regulatory concerns about the quality and tracking of imported drugs.</p>
<ol start="5">
<li><strong> Eliminating or Limiting Direct-to-Consumer Advertising</strong></li>
</ol>
<p style="padding-left: 40px;"><strong>Mechanism:</strong> This strategy would ban or severely limit DTC advertising of prescription drugs. <strong>Impact:</strong> Could reduce consumer demand for newer, more expensive medications, leading to lower drug prices. Eliminating DTC is anticipated to cause a very small reduction in prices, around 0.1% to 1%. The direct effect on drug prices might be minimal, but it could potentially reduce the demand for more expensive, heavily advertised drugs. <strong>Challenges:</strong> May impact patient awareness of new treatment options and could face significant resistance from both pharmaceutical companies and media organizations that benefit from advertising revenue.</p>
<ol start="6">
<li><strong> Facilitating Earlier Market Entry for Generic and Biosimilar Drugs</strong></li>
</ol>
<p style="padding-left: 40px;"><strong>Mechanism:</strong> Proposes regulatory or legislative changes to make it easier for generic and biosimilar drugs to enter the market sooner after the patent expiration of brand-name drugs. <strong>Impact:</strong>  Expected to result in a very small immediate reduction in prices, approximately 0.1% to 1%. Accelerating the availability of generics and biosimilars could help decrease prices over time as competition increases. <strong>Challenges:</strong> Could potentially decrease the profitability of new drugs, affecting pharmaceutical innovation and investment.</p>
<ol start="7">
<li><strong> Increasing Transparency in Brand-Name Drug Prices</strong></li>
</ol>
<p style="padding-left: 40px;"><strong>Mechanism:</strong> This strategy would require more detailed reporting and public disclosure of drug pricing structures and actual transaction prices. <strong>Impact:</strong> This strategy might lead to no change or a slight increase in prices. Transparency alone does not necessarily reduce prices but could foster a more competitive pricing environment indirectly. <strong>Challenges:</strong> Pharmaceutical companies may resist disclosure of sensitive pricing information, and increased transparency alone may not lead to price reductions without other supportive measures.</p>
<p><strong>Discussion</strong></p>
<p>Overall, this report requested by several progressive Democratic senators including Bernie Sanders, D (VT) goes into detail on the complexity of drug pricing and potential alternatives to the current system of drug pricing or expanding the price negotiations.  All their recommendations have serious consequences for innovation and should be considered with an eye on what can be done without impacting new product development.  One area obviously missing, is that all these recommendations are focused on the manufacturer, yet around 50% of drug spend is going to pharmacy benefit managers and others in the system without adding them to the discussion, we will be forever spinning our wheels as with reduced prices they may jump in and take more of the pie to keep their profitability the same or growing.</p>
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		<title>Understanding the High Costs of Cancer Care: Insights from &#8220;Oncology Update with John Marshall&#8221;</title>
		<link>https://www.policymed.com/2024/08/understanding-the-high-costs-of-cancer-care-insights-from-oncology-update-with-john-marshall.html</link>
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		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Sat, 24 Aug 2024 09:29:56 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[oncology]]></category>
		<category><![CDATA[NEW]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=17034</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="535" height="102" src="https://www.policymed.com/wp-content/uploads/2024/08/John-Marshall-Episode-2.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/08/John-Marshall-Episode-2.jpg 535w, https://www.policymed.com/wp-content/uploads/2024/08/John-Marshall-Episode-2-300x57.jpg 300w" sizes="auto, (max-width: 535px) 100vw, 535px" /></div>Cancer care costs continue to rise, posing significant challenges for both patients and healthcare systems. In the latest episode of &#8220;Oncology Update with John Marshall,&#8221; Dr. John Marshall and his guest, Dr. Laura Esserman, delve into the reasons behind these escalating expenses and explore innovative solutions to optimize clinical research and treatment efficacy. Here’s a [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="535" height="102" src="https://www.policymed.com/wp-content/uploads/2024/08/John-Marshall-Episode-2.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/08/John-Marshall-Episode-2.jpg 535w, https://www.policymed.com/wp-content/uploads/2024/08/John-Marshall-Episode-2-300x57.jpg 300w" sizes="auto, (max-width: 535px) 100vw, 535px" /></div><p>Cancer care costs continue to rise, posing significant challenges for both patients and healthcare systems. In the <a href="https://clinicalcaresolutions.net/activities/oncology/video-update2-dr-john-marshall/39973/content">latest episode</a> of &#8220;<a href="https://clinicalcaresolutions.net/program/oncology/video-update1-dr-john-marshall-georgetown-university/22730">Oncology Update with John Marshall</a>,&#8221; Dr. John Marshall and his guest, <a href="https://profiles.ucsf.edu/laura.esserman">Dr. Laura Esserman</a>, delve into the reasons behind these escalating expenses and explore innovative solutions to optimize clinical research and treatment efficacy. Here’s a summary of the key points discussed in the episode:</p>
<p><strong>The Economics of Cancer Care: A Focus on ASCO</strong></p>
<p>The episode begins with a reflection on the American Society of Clinical Oncology (ASCO) meeting, highlighting the extravagance of the event which seems more celebratory than educational at times. Dr. Marshall points out the irony in spending vast amounts of money on elaborate booths, suggesting these funds could be better utilized in clinical research. The discussion raises important questions about the allocation of healthcare dollars and the true beneficiaries of such expenditures.</p>
<p><strong>Clinical Trials: The Heart of Innovation and Expense</strong></p>
<p>The conversation shifts to the core issues of clinical trial design and execution. Dr. Esserman, an expert in breast cancer research, criticizes the current system for its inefficiency and misalignment of incentives. She advocates for a more integrated approach where clinical medicine and research are not distinct entities, but rather complementary facets of patient care.</p>
<p><strong>Innovative Approaches to Clinical Research</strong></p>
<p>Dr. Esserman shares insights from the I-SPY trials, which have revolutionized the way clinical trials are conducted by using adaptive trial designs. These designs allow for quicker adjustments based on interim results, potentially speeding up the process of finding effective treatments. This approach not only reduces costs but also enhances the relevance and impact of clinical trials on patient care.</p>
<p><strong>Policy Implications and the Future of Drug Pricing</strong></p>
<p>Dr. Marshall discusses the implications of drug price negotiations and the unique stance of the United States on valuing treatments. He references recent legislative efforts in Maryland aimed at negotiating drug prices as a hopeful sign of progress towards more rational drug pricing policies.</p>
<p><strong>Conclusion: A Call for Smarter Clinical Research</strong></p>
<p>The episode concludes with a call to action for smarter clinical research and a healthcare system that learns and adapts quickly. The insights from Dr. Marshall and Dr. Esserman serve as a valuable guide for healthcare professionals, policymakers, and patients alike in understanding and addressing the high costs associated with cancer care.</p>
<p>For further details, you can watch the full episode at <a href="https://clinicalcaresolutions.net/activities/oncology/video-update2-dr-john-marshall/39973/content">Clinical Care Solutions</a>.</p>
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		<title>Rare Disease Community Pushes Back Against Inflation Reduction Act</title>
		<link>https://www.policymed.com/2024/08/rare-disease-community-pushes-back-against-inflation-reduction-act.html</link>
					<comments>https://www.policymed.com/2024/08/rare-disease-community-pushes-back-against-inflation-reduction-act.html#respond</comments>
		
		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Fri, 16 Aug 2024 08:27:38 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[NEW]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=16996</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47.jpg 1200w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div>Bloomberg recently wrote about a push by the rare disease community for changes in the Inflation Reduction Act’s drug price-setting rules. The article notes that some pharmaceutical companies have announced that they plan to stop or shift their research into rare disease or small-molecule drugs out of fear that they would not recoup their costs [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47.jpg 1200w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2022/01/stencil.default-47-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div><p>Bloomberg <a href="https://news.bloomberglaw.com/health-law-and-business/us-drug-negotiations-plan-shifts-focus-for-rare-disease-programs?utm_campaign=pharmalittle&amp;utm_medium=email&amp;_hsenc=p2ANqtz-8OcFlNklnEjO5jtGIdCvFMp_WNZ4KjEMJWYnntdwSTjdScW9ZZ5AmiH1W-mSuYhzAC8KvCpy8cYYxrpXKnPcSpvZ3fxQ&amp;_hsmi=311902294&amp;utm_content=311902294&amp;utm_source=hs_email">recently wrote about a push</a> by the rare disease community for changes in the Inflation Reduction Act’s drug price-setting rules. The article notes that some pharmaceutical companies have announced that they plan to stop or shift their research into rare disease or small-molecule drugs out of fear that they would not recoup their costs under the Medicare Drug Price Negotiation Program.</p>
<p>Under the Inflation Reduction Act, orphan drugs with a single Food and Drug Administration (FDA) approved indication to treat a rare disease are exempt from the bargaining requirements. Drugs with designations to treat more than one rare disease or condition will not qualify for the exclusion, however, and may be subject to price negotiations – even in cases where they have not been approved for any indications for an additional rare disease or condition.</p>
<p>The National Pharmaceutical Council <a href="https://www.npcnow.org/resources/unintended-consequences-inflation-reduction-act-clinical-development-toward-subsequent">conducted a study earlier this year</a> that found that 60% of the drugs with the highest gross spending in 2020 by Medicare Part D were small-molecule drugs with subsequent indications. The study concluded that innovation for small-molecule drugs – including rare disease drugs – is at risk under the Inflation Reduction Act because it may reduce economic incentives for manufacturers to develop multiple indications for prescription drugs.</p>
<p>“The rare disease development pipeline and R&amp;D progress over the last 40 years has relied on identifying new applications for approved drugs to address unmet needs for patients living with rare diseases,” said John O’Brien, president and CEO of the National Pharmaceutical Council. “It doesn’t make sense to punish a company for bringing drugs to the market to help the rare community.”</p>
<p>Therefore, certain members of the rare disease community are pushing for changes to be made to the Inflation Reduction Act to protect the development of rare disease and small-molecule drugs. Additionally, AstraZeneca PLC <a href="https://www.astrazeneca-us.com/media/press-releases/2023/astrazeneca-urges-reexamination-of-unintended-consequences-of-inflation-reduction-act-on-american-cancer-and-rare-disease-patients-08232023.html">filed a lawsuit challenging the rule in court</a>, arguing that the provisions in the Inflation Reduction Act “run headlong” into the goals of the Orphan Drug Act. Dave Fredrickson, Executive Vice President, Oncology Business Unit, AstraZeneca, said: “Rare disease and cancer patients depend upon high-risk, low-probability drug development that takes many years to develop and aims for cure. If today’s version of the law stands, patients in the United States with rare conditions, who have benefited from the Orphan Drug Act, will get delayed access to scientific breakthroughs relative to other parts of the world.”</p>
<p>“What used to be an effective incentive for further research into rare diseases has now effectively become a penalty, and that has a chilling effect,” said Karin Hoelzer, senior director of policy and regulatory affairs for the <a href="https://rarediseases.org/">National Organization for Rare Disorders</a>. “Patient groups are concerned because they’re hearing that their drug development programs may not move forward.”</p>
<p>A <a href="https://news.bloomberglaw.com/health-law-and-business/us-drug-negotiations-plan-shifts-focus-for-rare-disease-programs?utm_campaign=pharmalittle&amp;utm_medium=email&amp;_hsenc=p2ANqtz-8OcFlNklnEjO5jtGIdCvFMp_WNZ4KjEMJWYnntdwSTjdScW9ZZ5AmiH1W-mSuYhzAC8KvCpy8cYYxrpXKnPcSpvZ3fxQ&amp;_hsmi=311902294&amp;utm_content=311902294&amp;utm_source=hs_email">spokesperson</a> for the Centers for Medicare and Medicaid Services (CMS) noted that the negotiation program is in line with the law and “improving the affordability of drugs in Medicare in the short run won’t hurt long-term innovation.” The spokesperson went on to say, “this is an industry that has demonstrated time and time again – they will thrive.”</p>
<p>This will be an interesting space to keep an eye on as the Inflation Reduction Act continues to be implemented.</p>
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		<title>The 340B Program is Growing, But is it Benefitting Patients?</title>
		<link>https://www.policymed.com/2024/06/the-340b-program-is-growing-but-is-it-benefitting-patients.html</link>
					<comments>https://www.policymed.com/2024/06/the-340b-program-is-growing-but-is-it-benefitting-patients.html#respond</comments>
		
		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Fri, 28 Jun 2024 08:28:04 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[NEW]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=16875</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170.jpg 1200w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div>The Berkeley Research Group recently published an updated report that compared sales across federal prescription drug programs, to put the size of the 340B Program into perspective. The study found that in 2022, total 340B program sales reached $54.6 billion, when measured at the discounted 340B price, which is more than double the level of [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170.jpg 1200w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2024/05/stencil.default-2024-05-31T142937.170-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div><p>The Berkeley Research Group <a href="https://www.thinkbrg.com/insights/publications/measuring-relative-size-of-340b-program-2022-update/">recently published an updated report</a> that compared sales across federal prescription drug programs, to put the size of the 340B Program into perspective. The study found that in 2022, total 340B program sales reached $54.6 billion, when measured at the discounted 340B price, which is more than double the level of 340B sales compared to five years prior. This growth is likely driven by an increase in participation in the program, hospital and provider consolidation, and expansion of contract pharmacy arrangements.</p>
<p>Just that figure alone does not adequately represent the size of the 340B program as 340B prices were an average of 57% lower than list prices in 2022 and the discounted 340B price for some medicines can be as low as a penny. When expressed in terms of the undiscounted list price or wholesale acquisition cost (WAC), 340B sales reached $126.3 billion in 2022.</p>
<p>According to the report, total outpatient net medicine spending varied across government programs in 2022, with Medicare Part D spending $148.4 billion in 2022 and Medicare Part B spending $43.6 billion. Medicaid spent $43.2 billion and TRICARE/DOD spent $8.3 billion during that same time period. As noted above, the 340B program spent $54.6 billion in 2022, the second largest federal drug program considered.</p>
<p>However, the report goes on to note that despite the large size of the 340B program, the Health Resources &amp; Services Administration (HRSA) Office of Pharmacy Affairs (OPA), which administers the 340B program, had a budget of only $11.2 million in FY 2022, compared to the $772.5 million budgeted for federal administration at CMS. Additionally, the data released by HRSA OPA regarding the 340B program is limited when compared to data provided by CMS for both Medicare Parts B and D as well as TRICARE spending.</p>
<p>When estimating the percentage of total branded outpatient drug sales in the United States in 2022, 340B sales were roughly 18.1% of the total, compared to 17.9% in 2021, 17.3% in 2020, 14.9% in 2019 and 2018, and 11.3% in 2017.</p>
<p>The report concluded that despite the intense growth the 340B program has seen, “comprehensive data on the program remains sparse and program guidance vague.” Further, because of the growth the program has seen, it may result in shifts in the site of care, which may ultimately increase costs for payers and patients alike. Finally, because there is not available data on how much margin each covered entity receives from the 340B program, it is unclear whether the program is targeting the providers that treat the most uninsured and low-income patients.</p>
<p>In a <a href="https://phrma.org/Blog/340B-grows-and-grows-but-patients-do-not-see-the-savings">press release</a> regarding the new report, PhRMA notes that “Despite its massive size, 340B has zero reporting requirements and zero patient protections to ensure the program is working as it should. Many hospital participants are not located in medically underserved communities, provide very little charity care and, alarmingly, engage in aggressive debt collection practices.”</p>
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		<title>Brookings Institution Finds No Surprises Act Arbitration Results in Larger than Expected Payouts</title>
		<link>https://www.policymed.com/2024/05/brookings-institution-finds-no-surprises-act-arbitration-results-in-larger-than-expected-payouts.html</link>
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		<dc:creator><![CDATA[Thomas Sullivan]]></dc:creator>
		<pubDate>Wed, 22 May 2024 08:26:25 +0000</pubDate>
				<category><![CDATA[Drug Prices]]></category>
		<category><![CDATA[Healthcare Reform]]></category>
		<category><![CDATA[NEW]]></category>
		<guid isPermaLink="false">https://www.policymed.com/?p=16824</guid>

					<description><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553.jpg 1200w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div>The Brookings Institution recently published a study on the outcomes under the No Surprises Act arbitration process, finding that the process has tended to result in payouts larger than what Medicare and in-network private insurers would pay providers. Under the No Surprises Act, the amount a patient owes for out-of-network emergency services and non-emergency services [&#8230;]]]></description>
										<content:encoded><![CDATA[<div style="margin-bottom:20px;"><img width="1200" height="800" src="https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553.jpg" class="attachment-post-thumbnail size-post-thumbnail wp-post-image" alt="" decoding="async" loading="lazy" srcset="https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553.jpg 1200w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-300x200.jpg 300w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-1024x683.jpg 1024w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-768x512.jpg 768w, https://www.policymed.com/wp-content/uploads/2024/01/stencil.default-2024-01-31T172747.553-450x300.jpg 450w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /></div><p>The Brookings Institution <a href="https://www.brookings.edu/articles/a-first-look-at-outcomes-under-the-no-surprises-act-arbitration-process/">recently published a study</a> on the outcomes under the No Surprises Act arbitration process, finding that the process has tended to result in payouts larger than what Medicare and in-network private insurers would pay providers. Under the No Surprises Act, the amount a patient owes for out-of-network emergency services and non-emergency services delivered at in-network facilities cannot exceed the cost-sharing that the patient would owe for similar in-network services. The law also created an independent dispute resolution (IDR) process to resolve disputes between insurers and providers over payment for impacted out-of-network services.</p>
<p>To conduct the study, Brookings <a href="https://www.cms.gov/files/document/federal-idr-supplemental-background-2023-q1-2023-q2.pdf">reviewed data</a> on arbitration decisions during the first half of 2023 from the Centers for Medicare and Medicaid Services (CMS). In conducting the review, Brookings analyzed the IDR process to see how much providers and insurers are offering in IDR and what amounts the IDR entities ultimately decide upon.</p>
<p>Brookings reported median figures rather than means because the data include some “extreme outlier decision amounts” that are suspected to be data errors. With a focus on emergency care, imaging, and neonatal/pediatric critical care, median payouts were at least 3.7 times what Medicare would pay.</p>
<p>For emergency care and imaging – categories in which there are estimates of historical mean in-network commercial prices – the median payout was at least 50% higher than the historic most generous payments average for in-network care through commercial plans. For emergency care estimates, they ranged from 2.5 to 2.6 times Medicare’s price while imaging estimates ranged from 1.8 to 2/4 times Medicare’s price.</p>
<p>Brookings also noted that “typical IDR decisions appear more similar to the allowed amounts that insurers historically set for the minority of services delivered out-of-network,” with estimates ranging from 3.9 to 4.7 times Medicare’s prices for emergency care and 2.9 to 3.3 times Medicare’s prices for imaging services. The insurer’s allowed amount does not necessarily reflect the amount the provider collected for the services and neither the allowed amount nor the IDR decision may reflect non-pecuniary costs that providers or insurers may incur with respect to out-of-network care.</p>
<p>This means – in a surprising turn of events and the opposite of what the Congressional Budget Office predicted – the law very well may result in raised in-network prices and insurance premiums. CBO expected IDR decisions would fall close to the qualifying payment amount since it is one of the key factors considered by IDR entities in making decisions. In the disputes analyzed by Brookings, the qualifying payment amount has been lower than the mean in-network rates (absent the law) but as noted above, actual decisions in the dispute resolution process have tended to far exceed the qualifying payment amounts.</p>
<p>Of course, it is not possible to predict whether future rulings will follow the same pattern, so the long-term effect on negotiations between insurers and providers is hard to predict.</p>
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