Week In Washington: Administration Proposes Big Changes for Prescription Drugs

February 1, 2019

Rebates: The Trump Administration released a proposed regulation with huge implications for the way prescription drugs are distributed. The proposed rule would alter the safe harbor on rebates to pharmacy benefit managers (PBMs). The proposed rule, which applies to Medicare plans and managed Medicaid plans, would allow drug manufacturers to offer discounted prices directly to consumers but would no longer permit them to give rebates to PBMs. The rule is scheduled to go into effect in 2020 but some experts believe it will be delayed. The comment window is 60 days (i.e., the rule will not finalize for at least 3 months). A good summary can be found here.

2020 Call Letter Released: CMS also released the 2020 call letter (and Advanced Notice Part II) this week. The proposal allows for flexibility in offering supplemental benefits. It also encourages plans to provide lower cost-sharing for opioid-reversal agents and pain management treatments for patients undergoing addiction treatment.

CBO – CBO released its analysis on the effects of the recent short-term duration plans and association health plans on the individual and small group markets. They found these plans would enroll approximately 5 million people and increase premiums in the individual and small group markets by approximately 3%.

AHP Analysis – Along those lines, new research was released on the success of the association health plans. The analysis found that 34 AHPs had been launched under the new, more flexible guidance in 13 states. For those interested in understanding who is enrolling in AHPs and where they are located this is the best research I’ve seen on the matter.

Employer Insurance AnalystNew analysis from Kaiser shows that the percent of non-elderly Americans with employer coverage hit the highest levels (58.4%) since 2008. However, employer coverage for individuals below 400% FPL has consistently declined since 1999. In other words, increases in employer coverage are only a result of increasing coverage for those whose income is above 400% FPL.

Hill Hearings – The House held hearings on prescription drugs and potential ways to reduce drug costs. There remains an outside chance that a bill could pass Congress on the topic of prescription drugs.