Americans pay a lot for pharmaceuticals, and politicians of all stripes are offering prescription drug price-relief proposals to force prices downward. Top-down approaches, though, carry a high chance of failure. The astronomical price incorporates the massive up-front costs of testing and gaining FDA approval. The often erratic and unpredictable process can take 15 years and $1.5 billion. Most prospective drugs never make it to market. That’s much of what you’re paying for. Second, despite popular perception, drug manufacturers are only middle-of-the-road among American industries in terms of profitability. Employ blunt price controls, and you’ll likely cut industry profitability, drive investors away, and discourage development of new drugs.
Pharmacists and some health experts are opposing a legislative proposal to permit the wholesale bulk importation of drugs from Canada to Maine, arguing that it could result in unsafe drugs coming in to Maine and drug shortages in Canada. Kenneth McCall, past president of the Maine Pharmacy Association, said that trying to import Canadian price controls is a flawed model that would lead to drugs of dubious quality coming fromoverseas countries and unscrupulous sellers.
What is a more limited-government, pro-market (not simply pro-business) health policy reformer supposed to do? There are plenty of other short-term poses one might adopt. Accept a lot of givens as too politically difficult to challenge and then suggest quarter-way compromises that slow the pace of retreat. Or try procedural sidesteps that alter the venue of policy development (let the states do it!), without greater guarantees than what shuffling a somewhat altered deck of cards with a different set of political intermediaries offers. Or propose new tricks of manipulating magic money from somewhere else (reinsurance, reshuffled subsidies, formulaic reimbursement and benefit cuts) in the further away future.
|The Trump administration has been pushing for lower drug prices, and some drug manufacturers have responded by lowering prices and providing greater access to life-saving treatments. However, there is a growing concern among health care providers that the middlemen who negotiate drug prices on behalf of insurers—known as pharmacy benefit managers (PBMs)—are actively working to keep prices high for consumers, presumably in an effort to increase their own profits. I run a free cardiovascular risk reduction service at a local clinic where we see many patients either suffering from, or at high risk for, heart disease. In collaboration with providers, I work to apply evidence-based medicine in the clinical setting and ensure any new treatment is financially sustainable for a patient—a task that can be made difficult by profit-driven insurance companies denying medication access and PBMs that keep treatment costs high.|
The Justice Department has appealed a federal judge’s decision to strike down work requirements in Kentucky and Arkansas pertaining to certain Medicaid beneficiaries. The case will go before the U.S. Court of Appeals for the District of Columbia after being struck down March 27 by Judge James Boasberg of the U.S. District Court for the District of Columbia, an appointee of former President Obama. At issue are rules the Trump administration approved in the states obligating some people who are able to work, volunteer, or take classes for 80 hours a month to be allowed to remain on Medicaid. The rules don’t apply to caregivers, parents, and people undergoing treatment for serious illness.
|Seeking to show Republicans’ commitment to protecting those with pre-existing conditions, a group of GOP senators led by Sen. Thom Tillis of North Carolina is reviving and expanding a bill that would retain at least some of the protections built into Obamacare. The move is an attempt to address concerns that the popular and ironclad provisions secured by the ACA may disappear amid President Trump’s renewed drive to overturn the landmark health reform law. It comes as Democrats offer up an array of new proposals for universal, government-backed health coverage. The bill’s introduction comes less than two weeks after the Trump administration said in a federal appeals filing that the entire ACA should be struck down.|
A federal judge on Thursday rejected the Trump administration’s attempts to expand access to association health plan. U.S. District Judge John Bates in Washington said the administration’s final rule allowing associations and employers to band together to create AHPs goes beyond its authority under the Employee Retirement Income Security Act (ERISA). The Trump administration’s rule allows employers to join together to gain more efficiencies of scale in purchasing coverage and services, and the plans are more affordable because they don’t have to follow many ACA rules.
Democrats in the House of Representatives have put aside grandiose thoughts of Medicare-for-All and single-payer health insurance – at least for a day or two. Instead, they have introduced a new health plan with a more modest goal: making Obamacare work better.
It has three elements:
- Expand health insurance subsidies to everyone. (Individuals are currently ineligible for help if they earn $48,560 or more.)
- Create a national reinsurance pool to subsidize insurance companies that incur high costs.
- Reverse Trump administration regulations that make it easier to obtain limited-benefit insurance.
So, what’s wrong with that? For starters, it uses taxpayer dollars to give money to rich people and insurance companies.
The Trump administration’s decision to ask a federal appeals court to invalidate the Affordable Care Act has given House Democrats a new opening to pursue what they see as a winning political strategy: moving past talk of impeachment to put kitchen-table issues like health care front and center.
The Democrats’ new bill aims to lower health insurance premiums, strengthen protections for people with pre-existing medical conditions and ban the sale of what Democrats call “junk insurance.”
The Trump Administration has proposed using its demonstration authority under section 1115A of the Social Security Act to test a method of reimbursement for physician-administered drugs based on prices in 14 countries. The proposal is controversial, raising constitutional questions about the agency’s authority to modify Medicare reimbursement absent congressional action, as well as objections to the use of international reference pricing. A recent paper from the Foundation for Research on Equal Opportunity (FREOPP) makes a useful contribution to this debate. The FREOPP paper recommends that the administration construct a market-based international index (MBII) that would exclude “industrialized countries with little room for market-based pricing.” This report examines the drug pricing and reimbursement policies in MBII countries and finds that these policies are generally not market-based. Secondly, it presents data showing that many drugs introduced between 2011 and 2018 are not available to consumers in MBII countries. Under the proposal advanced by the administration and that suggested by FREOPP, Medicare reimbursement for physician-administered drugs would largely be based on international reference prices in which the regulatory agency of one government sets drug prices based at least in part on those set by regulatory agencies in other countries. Importing these mutually reinforcing, centralized decisions into Medicare may reduce reimbursement for physician-administered drugs, but the new reimbursement system cannot be said to be based on market prices.