Radar on Drug Benefits
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Experts Predict Drug Price Reforms Will Have Modest Impact on Commercial Market
As soon as Friday, Congress is expected to pass Medicare prescription drug price reforms as part of the Inflation Reduction Act (IRA). The reforms are less ambitious than previous versions of drug pricing legislation considered by the current Congress, but various experts and health care stakeholders are mounting vehement arguments about the reforms’ ultimate impact on prices.
Under the bill, HHS would be able to negotiate the price of a gradually increasing number of drugs starting in 2026, when 10 drugs will be eligible for negotiation. The bill would also limit out-of-pocket drug costs for Medicare Advantage and Part D beneficiaries to $2,000 per year, and repeal the so-called rebate rule in Medicare Part D. In addition, the proposal would bar Medicare Part B and Part D drug prices from growing faster than inflation. In a summary of the late version of the reconciliation bill, Senate Democrats estimated that the drug pricing reform program would save $288 billion over 10 years.
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New Drug Pricing Bill Could Affect Millions of Medicare Beneficiaries
More than 1.4 million Medicare beneficiaries could see their medication costs plunge if the Senate passes a budget reconciliation bill that contains drug pricing reforms, Kaiser Family Foundation estimated.
The bill — put forward by Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin III (D-W.Va.) — will allow Medicare to negotiate some prescription drug prices starting in 2026 and require drug companies to pay rebates if drug prices rise faster than inflation starting in 2023. Between 2019 and 2020, half of drugs covered by Medicare Part D and 48% of drugs covered by Medicare Part B saw price increases greater than the rate of inflation (1.0%), according to a previous Kaiser Family Foundation analysis. -
News Briefs: Court Ends Patent Thicket Lawsuit Against AbbVie
A U.S. appeals court ruled that AbbVie Inc. does not need to defend itself from a lawsuit brought by the city of Baltimore, unions and insurance carriers that alleges the pharma giant used a patent thicket to improperly protect Humira (adalimumab) from competition. Before the ruling, the suit had the potential to upend widespread pharma industry business practices if it had been decided against AbbVie. It also comes amid news that the Biden administration is launching efforts to prevent patent thicketing, a process by which pharmaceutical companies extend patent exclusivity beyond what patent law ostensibly allows. Two laws, the Hatch-Waxman Act and Orphan Drug Act, set typical patent windows at five years and seven years, respectively. High-level officials at the FDA and the U.S. Patent and Trademark Office in July said they would be working together to scrutinize certain practices that could potentially lead to delays in competition from biosimilars and generics. -
Medication Abortion Faces Legal Uncertainty Post-Dobbs
With abortion banned or on the verge of a ban in a growing number of states following the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, medication abortion has become more important than ever for women and pregnant people seeking abortion care. Abortifacients, the class of prescription drug used to terminate pregnancies, can be used more discreetly than surgical abortions: they don’t require an in-person consultation and, since the start of the pandemic, have been dispensed online without medical risk to patients.
However, experts say that the legal status of medication abortion is far from settled in states where abortion has been banned. Many patients haven’t heard that medication abortion is available, and women and pregnant people who do use abortifacients — or suffer a miscarriage — could face prosecution in states where abortion has been banned. It’s not clear what sort of criminal or civil risk providers, purchasers and carriers will bear if their patients and plan members use abortifacients prescribed across state lines.
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UnitedHealth Eyes No Out-of-Pocket Costs for Certain Drugs; Other Large Payers May Follow Suit
UnitedHealth Group announced on July 15 that it would eliminate out-of-pocket costs for insulin and a few other medications for beneficiaries enrolled in fully insured plans. The managed care organization expects to implement the changes starting as early as Jan. 1, 2023, pending regulatory approval.
Health and drug policy experts who spoke with AIS Health, a division of MMIT, applauded UnitedHealth’s decision, and noted it would benefit patients who struggle to pay for medications and increase adherence. They also said the move could help United financially, as members are more likely to stay out of the hospital and have better long-term health, but they said it could lead to higher premiums for employers and employees. UnitedHealth did not respond to AIS Health’s request for comment on how the company would foot the bill for implementing the zero cost-share policy.
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