The ins and outs of the new House health package

House Republicans on three panels circulated a draft health price transparency package with some reforms to payment practices of PBMs and hospitals, I reported yesterday. A big caveat: Democrats aren't necessarily on board, and changes could still come before the bill's expected introduction on Friday.

Some major provisions stayed in, including a small site-neutral pay policy to equalize payment for administering medications regardless of location, and another that would ban PBMs from charging Medicaid more than they pay pharmacies for drugs. It also featured a provision that will require health insurance companies and PBMs to issue reports to the employers that hire them, which comes after a STAT investigation showed consulting firms routinely take large sums from PBMs and then direct employers to those PBMs, creating clear conflicts of interest.

A big policy that got left out: basing Medicare patients' coinsurance on net prices, not list prices for pharmacy drugs. I've got all the details here.

court watch

Astellas to Medicare: JK, we aren't suing you!

homer

Astellas was so sure that one of its drugs was going to be selected as part of Medicare's new drug price negotiation program that the company preemptively sued the Biden administration — but then its drug didn't get picked, after all. Awkward, right?

The company withdrew its lawsuit yesterday, the legal equivalent of, "JK, don't mind us!" Because Astellas' drugs weren't selected, it undercut the company's argument that it would be harmed by the Medicare negotiation program.

The company, for its part, says it still thinks the program is unconstitutional. Read my full dispatch here.

pharma

Drug makers mum on negative impacts of pricing reform

In an effort to better understand the Inflation Reduction Act's impact on the pharmaceutical industry, my colleague Ed Silverman spearheaded a survey of 50 major drug makers and biotech companies.

The questions allowed companies the chance to elaborate about how the law is changing their pipelines and which therapies might get axed. "Unfortunately, we received few substantive responses. Nearly every company demurred, preferring to speak in generalities about their concerns," Ed writes in a new column.

Read his full examination of the incentives for companies to stay quiet about programs they may choose not to pursue, and his argument that the industry's talking points are less effective if the public simply has to take companies at their word.

providers

Hospitals' new site-neutral talking points

One analysis after another has shown that Medicare could save gobs of money if it equalized payments between hospital outpatient departments and physicians' offices — that's why hospitals fear it so much, because Congress loves a pay-for policy.

But hospitals are going on the offense to translate those savings into Medicare pay cuts for hospitals in lawmakers' districts. The lobbying firm Strategic Health Care, which counts several hospitals as clients, commissioned an analysis of Medicare claims data by Dobson DaVanzo to determine which states would be hit the hardest.

The states with the most to lose under even a simple site-neutral policy include California, New York, Ohio, Pennsylvania, Michigan, Massachusetts, North Carolina, Florida, and Illinois. That is not welcome news for proponents of the policy, given three of the four top leaders in Congress are either from California or New York. Click here to download the dataset to sort through for yourself.

drug shortages

As drug shortages climb, so do hospital GPO lobbying expenditures

The lobbying group representing companies that hospitals use to negotiate lower prices on medical supplies increased its lobbying expenditures more than 60% in the first half of this year, compared to the same period last year. The Healthcare Supply Chain Association spent $390,000 on lobbying in the first half of this year, up from $240,000 in the same period last year.

It comes as the increasing severity of cancer drug shortages — a key issue for the group — is grabbing the attention of Congress.

Hospital group purchasing organizations also find themselves needing to explain to Congress the difference between true GPOs and the drug-rebate aggregators that PBMs call GPOs. Congress is considering making drug middlemen disclose more information about business dealings. Those new requirements would apply to the new GPOs that drug middlemen have formed, which could inadvertently include the true GPOs that already are subject to stringent transparency laws.

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