Pharmacy Benefit Managers Are Drawing Fire From All Directions In Debate Over Drug Pricing

News outlets report on stories related to pharmaceutical pricing.

PBMs, as the managers are known, are big businesses themselves. The companies negotiate with drug manufacturers on behalf of government health plans and private and employer-based insurance plans. The deals they strike determine the availability and prices of prescription drugs for more than 266 million Americans. But there are questions about the extent to which patients benefit from the rebates that pharmacy benefit managers secure from drugmakers. PBMs’ operations are largely hidden from public view and from regulators. (Ollove, 2/12)

As pressure mounts to overhaul opaque pharmaceutical pricing, OptumRx, one of the largest U.S. pharmacy benefit managers, recently demanded that drug makers make significant changes toward rebates, but in a way that would largely bolster its own bottom line. The move by the PBM — which is owned by UnitedHealth Group (UNH), the big health insurer — comes as the Trump administration and some drug makers seek to minimize, if not eliminate, the influence rebates have on drug prices. Pharmacy benefit managers collect rebates from drug companies in exchange for favorable placement on formularies, the lists of medicines that receive preferred coverage. (Silverman and Swetlitz, 2/11)

House Democrats are considering ways to bring direct government negotiation to Medicare’s prescription drug benefit, but a key panel on Tuesday heard from experts urging them to make more targeted changes. At a hearing of the Ways and Means Committee, Chairman Richard E. Neal, D-Mass., suggested that Democrats would try to deliver a multi-faceted drug pricing bill this session that could touch on Food and Drug Administration drug approvals, reimbursements in Medicare and Medicaid, and even the tax code. He was noncommittal about the negotiation bill, but stressed to reporters after the hearing that he wanted a broad package. (Siddons, 2/12)

The Department of Health and Human Services won’t be able to bring down prices in Part D without “pitting drugs against each other,” Secretary Alex Azar said Tuesday. The HHS head said that the agency is aware step therapy and other similar approaches can require a greater need for prior authorization or can create confusion about which drugs are available—but having these tools at a plan’s disposal is crucial. (Minemyer, 2/13)

There are many, many things that rich people buy in larger quantities. It turns out medications for certain serious diseases may be one of them. A new analysis has found that, for some types of medications, income is a pretty strong predictor of how often someone is picking up a drug to treat an ailment. (Sanger-Katz, 2/7)

A bold stance on drug pricing will be a prerequisite for any candidate who wants to win the 2020 Democratic presidential nomination, but one challenge will be differentiating the contenders from each other. The main distinction among candidates could be between those pushing bipartisan policies and those promoting more liberal ideas that currently stand little chance of enactment. But in most cases, the bills have a list of co-sponsors that could resemble a future primary debate stage. (Siddons, 2/11)

The clash over free trade in North America has long been fought over familiar issues, including low-paid Mexican workers, U.S. factories that move jobs south of the border, and Canada’s high taxes on imported milk and cheese. But as Democrats in Congress consider whether to back a revamped regional trade pact being pushed by President Donald Trump, they’re zeroing in on a new point of conflict: drug prices. They contend that the new pact would force Americans to pay more for prescription drugs, and their argument has dimmed the outlook for one of Trump’s signature causes. (Wiseman, 2/13)

JC Scott has been the top lobbyist for the pharmacy benefit manager industry for just over four months, but he says he’s ready, willing, and able to defend his industry before Congress. Scott, who was hired in September as president and CEO of the Pharmaceutical Care Management Association, has his work cut out for him. PBMs, which negotiate with drug makers on behalf of health insurers and employers over the price of drugs, have gotten a bad reputation in Washington as middlemen who needlessly drive up drug prices in order to pocket more money for themselves. But Scott is determined to turn that reputation around, and he believes going before Congress is a key step in doing that. (Florko, 2/12)

Rep. Francis Rooney doesn’t sit on any of the congressional committees that deal with health care policy. His last government job was a stint as U.S. ambassador to the Holy See. In politics, he is best known as a Republican Party megadonor, the product of a lucrative career as a finance and construction executive. But suddenly, he’s an unlikely leading man in an increasingly noisy health policy fight over drug prices. The second-term congressman from Florida is the only Republican co-sponsor on a bill to allow Medicare for negotiate prices, traditionally a nonstarter for the GOP. (Facher, 2/11)

It sounded like an answer to prayers for millions with diabetes struggling to pay soaring prices for insulin. At a congressional hearing last month, Sen. Mike Enzi said an adviser had found “a foundation to import insulin for a number of people at lower cost.” The Wyoming Republican told the mother of a young man with Type 1 diabetes that his adviser “worked through a foundation so that it would be legal, and I will share that with you.” Such a group could link patients to safe medicines while saving them hundreds or thousands of dollars a year. But it doesn’t appear to exist, leaving patients with diabetes to either pay sky-high U.S. prices or try to import cheap insulin on their own, which is technically illegal. (Hancock, 2/11)

In a setback to AbbVie (ABBV), a federal judge rebuked the drug maker for failing to cough up a ream of documents in a closely watched lawsuit that accuses the company of untoward behavior in creating a so-called patent thicket to protect its best-selling Humira medication. At issue has been a simmering battle between AbbVie and Boehringer Ingelheim, which are locked in patent litigation, over access to internal AbbVie documents that discuss its strategy for bolstering Humira sales and fending off competition from lower-cost biosimilar alternatives. (Silverman, 2/12)

As drug makers increasingly grapple with other countries over the cost of medicines, the pharmaceutical industry’s trade group is asking the Trump administration to take “urgent action” against two dozen countries over their pricing policies and for engaging in “unfair” practices that threaten intellectual property rights. In comments filed with the U.S. trade representative, the trade group also made a point of singling out Japan, South Korea, Malaysia, and Canada for various moves that will purportedly cost drug makers large amounts of sales and jeopardize their ability to develop innovative medicines. (Silverman, 2/8)

The debate around prescription drug prices — including the Trump administration’s proposal tying some Medicare drug prices to what other countries pay — raises an important question: How do other countries decide what to pay for drugs? (Owens, 2/11)

When Michelle Fenner signed up to run this year’s Los Angeles Marathon, it got her thinking: Tijuana, Mexico, is only a 2½-hour drive from L.A. Why not take a trip across the border and buy some insulin for her son? “It’s so easy to just go across the border,” mused Fenner. This idea had been in the back of Fenner’s mind for a while. Her son was diagnosed with Type 1 diabetes nine years ago, meaning he needs daily injections of insulin to live. (Sable-Smith, 2/12)

The so-called Netflix payment model for obtaining hepatitis C treatments appears to be catching on among state officials as a Washington state health agency is the latest one hoping to convince drug makers to participate in such a scheme. The state Health Care Authority late last month began soliciting bids from drug makers to provide a guaranteed net unit price for Medicaid beneficiaries, and a similarly low price for other state employees. The goal is to eradicate the chronic disease from these groups by 2030 and to lower spending that last year reached about $80 million. (Silverman, 2/6)

Biotech is an industry defined by splashy startups pitching groundbreaking, life-changing treatments — if only they had a bit more money to test them. …Those press releases often make big promises — but there’s rarely any follow-up. As part of our quarterly Something Ventured series, STAT took a look at four companies that closed an early-stage venture round between January and March of last year. We looked back at what they promised to do with all that capital — and what they’ve actually done with it. (Sheridan, 2/13)

Celgene is famous for cultivating a constellation of biotech partners — companies whose fortunes are poised to be shifted by last month’s news that Bristol-Myers Squibb plans to buy Celgene in a $74 billion deal. One of those partners is BeiGene, among the buzziest companies in China’s rising biotech sector and one that could feel ripple effects. (Robbins, 2/13)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news […]

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