Note: Dose will not publish on Dec. 25 or Dec. 31 due to the holiday. We will look forward to providing an update in the new year. Happy Holidays!
Congress.
House Members are back in their districts and the Senate is moving nominations but still a little action:
Drug Prices. One of the few bipartisan causes on Capitol Hill these days is a strong distaste for anyone in the drug supply chain that does not manufacture, distribute or dispense drugs. They – rightly I believe – attribute rising consumer drug prices to all the rent seekers that have exploited the opaqueness and complexity of the U.S. drug chain.
In October, Senators Tester, Capito, Brown and Lankford wrote a letter to CMS asking Administrator Brooks-LaSure to consider administrative action to address the dramatic rise in DIR fees paid by pharmacies to Pharmacy Benefit Managers.
The Administrator wrote back on Wednesday and declared that she planned to seek administrative action to address the dramatic increase in DIR fees assessed against pharmacies.
DIR fees play a much smaller role in the drug supply chain than rebates overall but they more than doubled between 2018 and 2020. There have long been rumors about CVS’ aggressive action to press independent pharmacies with arbitrary DIR fees that forced the smaller fish out of the market.
What the Senators appear to be proposing is that all concessions, fees and payments negotiated with pharmacies be considered part of the “negotiated price” which would be subject to cost sharing with the Medicare beneficiary. In other words, at least one cause of market distortions that make cash pay cheaper than using insurance would probably be eliminated.
This is not a new idea and like previous tries it might not make it to the finish line. However, as drug price reform gets hung up in Congress it seems that there will be sufficient bipartisan support for the administration if it decides to move ahead.
Major changes are a negative for CVS and GRDX
Aduhelm. Senator Ron Wyden has joined Senator Bernie Sanders in demanding that CMS limit Part B premium increases. Of course, the Aduhelm has nothing to do with the announced Part B premium increases as the Office of the Actuary has declined to estimate the impact with so many uncertainties around up-take. (BIIB)
Never let reality get in the way of a good talking point.
Reconciliation. The transformative bill has now been punted until January. As we have noted repeatedly, time is not the Build Back Better Act’s friend. The president is unpopular, Democrat retirements are rising, and 2022 mid-terms could start to look very ugly from Democrats as we press further in the new year.
The drug price provisions have been an overhang on biotech all year. That may change by 1Q 2022
Hearings Next Week.
None.
The White House.
National Health Expenditures. The CMS Office of the Actuary released the 2020 National Health Expenditures Data. U.S. health care spending was $4.1T in 2020, a 9.7% increase over 2019. Most of the acceleration was due to a 36% increase in federal expenditures in response to the COVID-19 pandemic. Excluding pandemic related items, spending grew by 1.9% in 2020, due to less use of medical goods and services.
Pending Rules
HHS Notice of Benefit and Payment Parameters for 2023 (CMS-9911)
Most Favored Nation (MFN) Model (CMS-5528)
Other Stuff
Recent Events. Sequestration, More Sequestration & Medicare Payments | DVA, EHC, CHE A review of how the Medicare payment system may not be up to facing inflation in the critical areas of labor, drugs and medical supplies.
Upcoming Events. Facing Up to Facts: Health Care’s Most Confused CEOs. Sports show style, we are going to look at health care’s CEOs who seem to understand the change under way and those that just don’t get it. Look for invite next week.
Venture, SPAC and S-1 Corner.
Innovative Eyewear Inc. The company “develops and sells cutting-edge eyeglasses and sunglasses, which are designed to allow our customers to remain connected to their digital lives, while also offering prescription eyewear and sun protection” Our thought bubble: I don’t ear glasses but it still sounds like my worst nightmare. Seriously, if it works, pretty interesting application of the technology and probably saves a few lives on the road.
Updated SPAC spreadsheet can be found here.
Hedgeye Health Policy Publication/Event Calendar. Click here for searchable calendar.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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