This Week in Healthcare Reform: January 29th, 2021

A recent report points to unjustified price hikes for drugs; meanwhile, new polling maps out Americans’ expectations of lawmakers on out-of-control drug prices; opposition to the rebate rule ramps up; and, payers continue their focus on social health drivers.

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Week in Review

Rx Price Hikes: Earlier this month, the Institute for Clinical and Economic Review (ICER), a nonprofit drug pricing research group, published its second-ever report detailing Unsupported Price Increases (UPI) in the pharmaceutical space.  What they found was that, despite overall drug spending going down in 2019, many drugs still saw their prices go up.  In fact, ICER estimates that just seven drugs undergoing these price hikes – without any corresponding clinical justification – resulted in our health care system being overcharged by $1.2 billion that year, alone.  The analysis reinforces a distressing narrative, namely, that high drug prices are costing us – more than just dollars.  Late last year, research projected that medication non-adherence as a result of costs could lead to as many as 112,000 seniors dying each year.

Rx Polling: Against that backdrop, it’s unsettling to note that drug companies seemed to have wasted no time, starting off the year by doing what they do to start off every new year – raise prices.  Already, pharmaceutical manufacturers have hiked prices on hundreds of drugs.  But, increasingly, it’s not just prices that are on the rise, as new polling shows that public angst is also going up.  This week, the Campaign for Sustainable Rx Pricing (CSRxP) released the results of a new national survey conducted by Morning Consult in which the overwhelming majority of respondents (96 percent) agreed that lowering drug prices was an urgent challenge.  Additionally, according to the CSRxP poll, more than 25 percent of American voters said that someone in their family had been unable to afford a prescribed medication in the last year.  Further, more than four-in-five voters (86 percent) blame drugmakers for rising drug prices, with an equal majority (87 percent) saying it’s important that lawmakers focus on lowering these prices and holding these companies accountable.

Rebate Rule Opposition: A motion was filed this week asking a federal judge to vacate the effective date of the unpopular and historically expensive “Rebate Rule”.  That rule essentially eliminates pharmacy benefit managers’ (PBMs) ability to use rebates to extract savings for consumers, health plans, and government programs in their negotiations with pharmaceutical manufacturers.  When the previous Administration finalized the Rebate Rule last November, stakeholders – from across the health care spectrum, including lawmakers and academics – quickly lined up in opposition, pointing to data from the Administration’s own actuaries showing that the rule would drive up Medicare premiums for all seniors by 25 percent, while handing drugmakers a $100 billion bailout – and, leaving taxpayers to foot the bill.  As finalized, the Rebate Rule would go into effect on 1 January 2022.  The motion, filed by the Pharmaceutical Care Management Association (PCMA), an industry trade group representing PBMs, argues that that effectuation date would only upend the ongoing negotiations between drug manufacturers and private Medicare plans.

SDoH Investment: Health insurers have made social health drivers a priority going into 2021, announcing a dedicated focus on partnerships and investments in social determinants of health (SDoH) to begin the new year.  That prioritization had already begun reshaping health benefits design, but the COVID-19 health crisis only served to bring the importance of SDoH into sharper focus.  Payers have responded, looking to expand their coverage beyond the care that’s provided in the doctor’s office.  For instance, many plans are now treating food as a covered benefit, from paying for meal deliveries to teaching people better nutrition.  Additionally, the role that affordable, reliable housing plays in overall health and wellness has generated programs specifically focused on long-term solutions aimed at confronting the issue.


The Modern Medicaid Alliance recently released the latest update to its Medicaid dashboard, with a specific focus on the impact that the coronavirus pandemic has had on Medicaid enrollment.

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