Trump Administration Proposes Changes to the Rebate Program

The Trump administration has proposed a change to the prescription drug rebate system. The proposed rule from the U.S. Department of Health and Human Services (HHS) would eliminate the antikickback safe harbor for rebates negotiated between pharmaceutical manufacturers and pharmacy benefit managers (PBMs). In its place, HHS proposes two new and narrower antikickback safe harbors with the intent to encourage manufacturers to offer discounts directly to patients at the point-of-sale. The proposal was not well-received by Democrats. House Speaker Nancy Pelosi (D-Calif.) expressed concerns that the policy would put most Medicare beneficiaries at risk of higher premiums and out-of-pocket (OOP) costs. Democratic leadership of the House Ways and Means and Energy and Commerce committees also expressed opposition to the rule, arguing that it will increase government spending by $200 billion. HHS has stated that premium increases resulting from the proposal will be offset by lower OOP spending on high-cost drugs.

Bipartisan Value-Based Payment Legislation Introduced

Sens. Bill Cassidy (R-La.) and Mark Warner (D-Va.) have released draft legislation that aims to lower drug prices through the use of value-based payment. The Patient Affordability, Value, and Efficiency Act would tie prescription drug and medical device prices to the product’s clinical effectiveness. The bill would create carve outs for these new payment models from certain anti-kickback and physician self-referral laws, which some argue inhibit the move toward value-based care. Sens. Cassidy and Warner are requesting feedback on the draft by Feb. 19. Submissions should be emailed to paveact@ cassidy.senate.gov and [email protected].

Medicare for All Hearings, Legislation Expected Soon

House Democrats plan to begin hearings on ‘Medicare for All’ proposals this month, with the goal of passing legislation to expand the program by the end of next year, according to House Budget Committee Chairman John Yarmuth (D-Ky.). Yarmuth believes that the most feasible path would be to allow individuals age 50 or 55 and above to enroll in the program. Medicare eligibility currently begins at age 65. He hopes that congressional hearings will more clearly define the concept of Medicare for All, help develop a framework for legislation, and determine what proposals are possible from a financial perspective.

Rep. Pramila Jayapal (D-Wash.) has said that Democrats plan to introduce a bill this month, with committee hearings beginning in March. While she has the support of Chairman Yarmuth to hold a Medicare for All hearing before the Budget Committee, she has yet to receive commitments to explore the idea from panels with health jurisdiction – the House Ways and Means and Energy and Commerce committees.

HELP Considers Community Health Center Reauthorization

The Senate Health, Education, Labor, and Pensions (HELP) Committee is working to provide for a five-year extension of funding for the nation’s community health centers. HELP considered the bipartisan reauthorization legislation (S. 192) authored by Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) during a congressional hearing last week. The bill would provide $4 billion per year to the Community Health Center program; the National Health Service Corps (NHSC); the Teaching Health Center Graduate Medical Education program; the Special Diabetes Program at the National Institutes of Health (NIH); and the Special Diabetes Program for Indians before current funding expires Sept. 30.

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