INSIGHTS AND PERSPECTIVES

2018 policy in review: Pros, cons and promise

BY Lindsay Bealor Greenleaf

As 2018 comes to a close, many of us will spend a brief moment reflecting on the year, pondering our highs and lows, our successes and failures. The most motivated among us will take the extra step to identify areas of our life where there is room for improvement, like getting to the gym or finishing a column before the eleventh hour.

Rather than limit reflection to our personal lives, how about taking a trip down memory lane to revisit prescription drug pricing reforms?

Let’s start off on a positive note by recalling favorable policy changes and proposals.

In May 2018, the Trump administration proposed several positive policy changes in its drug pricing “Blueprint,” including: a proposal to modify the Anti-Kickback Statute safe harbor that allows for rebates; a proposal to require a percentage of rebates be applied at the point of sale to reduce patients’ out-of-pocket costs; and a proposal to promote value-based purchasing in federal programs by enabling tools like indication-based pricing.

A few months later, in September, Congress voted to prohibit “pharmacy gag clauses,” which is language middlemen known as pharmacy benefit managers insert into contracts with pharmacies that prevent the pharmacist from telling a customer when they can pay less for a drug by simply forgoing insurance.

It is ludicrous to think that using insurance could actually be worse for patients, and even more ludicrous that a pharmacist would be prohibited from helping them save money. Considering a recent USC Schaeffer study found that 23 percent of prescriptions paid at the pharmacy counter by commercially insured patients are overpaid, this reform to prohibit pharmacy gag clauses marks a significant win for patients.

However, this year also included several troubling policies put forth by the Trump administration.

In August, the administration enacted a policy change allowing Medicare Advantage plans to force seniors to “step through” an undesired drug before being granted access to the physician-administered therapy prescribed by their doctor. Beginning in 2019, this “fail first” policy will significantly harm patients suffering from some of the most complex and debilitating conditions, like cancer and rheumatoid arthritis.

In October, the Trump administration proposed the “International Pricing Index Model,” which would impose international reference pricing for Medicare patients’ physician-administered drugs.

Compared to the rest of the world, the United States places a high value on access to therapies, which is why Americans currently enjoy access to cancer treatments two years earlier than other developed countries. If the administration chooses to swap today’s payment design for a model that links to socialist countries’ payment designs, we are at risk of losing the speedy access to innovative therapies that we enjoy today. Americans could be forced to wait in line for cures, or worse: there will be nothing to wait in line for.

In November, the administration targeted longstanding patient protections in the Medicare Part D program by proposing to weaken the “Protected Classes,” which currently guarantee coverage for cancer, HIV, epilepsy, mental health and transplant-rejection drugs. A recently released proposed rule would allow plans to expand the use of prior authorization and step therapy, as well as exclude a Protected Class drug from coverage if its price increases faster than inflation. If finalized, this policy change would hinder access to treatments for Medicare’s most vulnerable patients.

While 2018 brought a mixed bag of reforms, we can find promise in the future.

With Democrats winning control of the House, we expect them to spend the next two years developing and voting on aggressive drug pricing legislation, including policies to allow the government to negotiate prices in Medicare, which is essentially government price setting, as well as expand the government’s power to seize patents if they do not approve of a manufacturer’s price. But with Republicans maintaining control of the Senate, it is unlikely that any of these ill-conceived policies will be enacted next year.

Since regulators are immune to the slowdowns that result from midterm election campaigns and the changing of the guard, we expect the Trump administration to continue its current pace of policymaking.

Going into 2019, we hope that the administration sets aside some time to observe the implications of recently enacted changes before barreling through with another series of reforms. Mindful observation and reflection is important, especially when it comes to policy, because it is difficult to assess how well one policy is working while numerous other policy changes are simultaneously underway.

Only by slowing down and measuring the effectiveness, as well as the consequences, of this past year’s policy reforms can we be confident that these changes are productive and protect patients’ access to critical therapies.


Lindsay Bealor GreenleafLindsay Bealor Greenleaf is director at ADVI, a healthcare consulting firm representing life science companies and healthcare provider organizations.

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