Lobbying Spend

News Briefs: AMA, AHA Scrap Surprise Billing Lawsuit

The American Medical Association (AMA) and American Hospital Association (AHA) on Sept. 20 both pulled lawsuits challenging rulemaking related to the No Surprises Act (NSA), the federal law that banned most balance billing. In a joint statement, the country’s two largest provider trade groups said that “the lawsuit became moot when the Administration released a revised final rule on Aug. 26. However, the AHA and AMA remain concerned that the final rule continues to favor insurers and does not line up with what Congress intended when it passed the law.” A broad group of providers objected to the Biden administration’s guidance on Independent Dispute Resolution (IDR), the HHS-managed arbitration process that will resolve balance billing disputes. Payers and providers have viewed IDR regulations as a zero-sum issue. Providers have argued that rulemaking favored insurers at their expense. The Biden administration recently released new guidance designed to address providers’ concerns and head off legal challenges; while that has worked in the AMA and AHA’s cases, several other lawsuits from providers are still in progress.

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News Briefs: Medicare Negotiation Will Cost Pharma Manufacturers

Moody’s on Aug. 19 released a report “stating that the drug pricing provisions in the Inflation Reduction Act of 2022 are credit negative for the pharmaceuticals industry, as the savings to the federal government and consumers will generally be borne by the industry,” the credit rating firm said. The most substantial impact on drug manufacturers will come from the IRA’s Medicare provisions, which the report observes are “estimated to save the US government $102 billion over 10 years. This cost will fall largely to the industry, as will the price curbing provisions and the reduction in the beneficiary out-of-pocket costs.” Moody’s also expects pharma’s early-stage transaction trend to accelerate: “One implication of the Inflation Reduction Act will be an increase in industry-wide acquisitions, as companies will seek ways to improve longer-term growth rates, given pressure on earnings growth that will result from the legislation. By acquiring companies with promising pipeline-stage products, pharmaceutical companies can increase the number of future drug launches to drive higher earnings.”

As Major Drug Price Reforms Stall, Focus Shifts to Insulin Costs

The Senate Finance Committee held a hearing on March 16 in which politicians and experts discussed drug price inflation and the proposal for Medicare to negotiate prices for some high-cost medications. But the efforts in those areas still seem uncertain and most are unlikely to move forward anytime soon as they were part of the Build Back Better Act (BBBA) bill that stalled out in December, one health policy expert tells AIS Health.

Health insurers and PBMs, though generally supportive of lowering drug prices, have in the past been critical of some of legislators’ reform proposals — including a narrower focus on lowering insulin out-of-pocket costs that has emerged in recent months.

Pharma Industry Spent Big to Block Drug Reform in 2021

With drug price reforms on the agenda, pharmaceutical companies last year rallied their significant lobbying resources to block or water down transformational policies. Partly as a result of those lobbying efforts, drug price reform is on the ropes, though sources say there is a meaningful chance that a standalone drug price reform bill could pass Congress this year before the midterm elections.

Drug price reform efforts have most recently been part of the proposed Build Back Better Act (BBBA), a bill that contains much of President Joe Biden’s proposed policy agenda. That bill stalled out in December, when centrist Sen. Joe Manchin (D-W.Va.) said he could not back the measure as proposed. When Congress disbanded for the holiday recess, the BBBA had several notable drug-pricing provisions. The federal government would have been able to negotiate the prices of certain high-cost medications with pharmaceutical manufacturers. Also, drug prices would be barred from rising at a higher rate than inflation, the Medicare Part D benefit design would be revamped to lower beneficiaries’ out-of-pocket costs and the price of insulin would be capped. Moreover, the never-implemented Trump-era rule that would have overhauled the prescription drug rebate structure in Medicare Part D would have been repealed.

Pharma Industry Spent Big to Block Drug Price Reform in 2021

With drug price reforms on the agenda, pharmaceutical companies last year rallied their significant lobbying resources to block or water down transformational policies. Partly as a result of those lobbying efforts, drug price reform is on the ropes, though sources say there is a meaningful chance that a standalone drug price reform bill could pass Congress this year before the midterm elections.

Drug price reform efforts have most recently been part of the proposed Build Back Better Act (BBBA), a bill that contains much of President Joe Biden’s proposed policy agenda. That bill stalled out in December, when centrist Sen. Joe Manchin (D-W.Va.) said he could not back the measure as proposed. When Congress disbanded for the holiday recess, the BBBA had several notable drug-pricing provisions. The federal government would have been able to negotiate the prices of certain high-cost medications with pharmaceutical manufacturers. Also, drug prices would be barred from rising at a higher rate than inflation, the Medicare Part D benefit design would be revamped to lower beneficiaries’ out-of-pocket costs and the price of insulin would be capped. Moreover, the never-implemented Trump-era rule that would have overhauled the prescription drug rebate structure in Medicare Part D would have been repealed.

News Briefs: US Drug Price Growth Offsets Falling Prices Elsewhere

The price of the average brand-name drug has increased by 18.3% annually on average over the last five years, according to research firm GlobalData. Floriane Reinaud, research and analysis director at GlobalData, said in a statement that this price growth is unique to the U.S. “While drug list prices have only been increasing in the US, major markets in the rest of the world are seeing declines. Japan, for example, saw drug prices decline by more than 9% while Germany declined by around 7.5%,” Reinaud said.

The business strength of “speculative grade” pharmaceutical companies varies considerably, mainly due to differences in their produce concentration and drug development pipelines, according to S&P Global Data. S&P analysts Patrick Bell and David A. Kaplan also wrote that “although speculative-grade companies are frequently more aggressive in pricing and life cycle management strategies, legislators and the media primarily focus criticism on well-known investment-grade peers and their more widely prescribed blockbuster drugs. Similarly, we believe pharmacy benefit managers place more attention on controlling spending on blockbuster drugs than those with narrower patient bases such as orphan drugs. Nevertheless, with a higher proportion of revenues generated in the U.S. and higher leverage, we believe drug price reform could hurt speculative-grade pharma companies disproportionately.”