President Trump may have smoothed the pathway for his successor, President-elect Joe Biden, to go after the pharmaceutical industry. By finalizing a long-promised regulation to lower the prices of some drugs in Medicare just weeks before he must leave office, Trump has put Biden in a position of implementing the regulation next year — an easier task, politically speaking, than introducing something so hated by drugmakers. “This provides an opening,” said Elizabeth Fowler, executive vice president for programs at the nonpartisan Commonwealth Fund. “Maybe it’s a bargaining chip with the industry.”
Biden likes the idea of bringing high U.S. drug prices more in line with other countries’ lower prices.
This is the core idea in the “most favored nation” rule Trump announced on Friday. It will tie the prices of drugs in Medicare Part B to the lower prices in other developed countries, many of which negotiate those prices directly with drugmakers.
This approach — of linking high-cost U.S. drugs to an international index — is one that has been embraced by many Democrats. Last year, House Democrats passed a bill allowing the federal government to negotiate lower Medicare drug prices. The bill, H.R. 3, uses an index of prices in six other countries as a price ceiling for the United States. Implemented a most favored nation rule represents a major shift in the way the federal government sets prices for drugs in the Medicare program and could result in significant payment cuts for drugmakers. During his campaign, Biden proposed creating an independent panel to recommend prices for new drugs that lack competition and are provided through Medicare and marketplace plans. The panel would consider other countries’ prices in making its recommendations.
For one thing, the Trump administration skipped the normal rulemaking process, which requires weeks for public comment. Instead, it issued what is known as an “interim final rule” — a move typically only reserved for rules that need to go into place quickly.
Trump announced another major regulation on Friday, finalizing a ban on drug rebates in the Medicare program. It is slated to go into effect on Jan. 1, 2022.
This rule is hated by pharmacy middlemen who collect the rebates but often don’t pass on the savings to consumers. The rebates are part of an opaque and convoluted price negotiation system, in which consumers can find it impossible to discover the actual price of a drug, let alone shop around for the best value. Like the “most favored nation” policy, the rebates ban aims to ultimately lower drug prices. But the administration abandoned that effort last year when its analysis showed such a ban would raise premiums in Medicare. That’s because health insurers, who increasingly own pharmacy benefit managers, probably would hike premiums to cover some of their losses from lost drug rebates.
If the Biden administration takes steps to reverse the rebates rule, it would be driven by that same concern.
“The rebate rule, I think, is viewed by most Democrats as a windfall for pharma and not for patients,” Fowler told me. “I cannot see that rule going forward…I think they would take steps to reverse it.”
Trump has not shied away from publicly slamming the drug industry for prices that are higher than anywhere in the world. Two years ago he promised to roll out the most favored nation rule, vowing it would have a widespread effect on drug costs. But then his administration dragged its feet amid heavy opposition by the industry and skepticism among Republican lawmakers. When Trump lost the election, many had assumed the effort would fall by the wayside, considering it’s atypical for presidents to implement controversial policy changes via executive order just before leaving office.
Yet the president — recently fueled by anger at Pfizer for announcing promising coronavirus vaccine data after Biden was declared the winner — rolled out the interim regulation on Friday. He paired it with a final rule banning drug rebates.“Although the administration had discussed both ideas for several years, Trump health officials still found themselves rushing to get the rules finalized because of significant internal feuding over the proposals,” my colleague Yasmeen Abutaleb reports.“Trump introduced both rules again in July as executive orders, but legal experts questioned whether they went through proper rulemaking processes and said those questions left them particularly vulnerable to legal challenges.”
The University of Oxford and the British-Swedish pharmaceutical giant AstraZeneca said its vaccine is up to 90 percent effective when administered at a half dose and then a full booster dose a month later. Pfizer and Moderna announced similarly promising results in the last two weeks.
“The Oxford-AstraZeneca vaccine is likely to be cheaper than those made by Pfizer and Moderna, and the British vaccine does not need to be stored at subzero temperatures, but can be kept in ordinary refrigerators in pharmacies and doctor’s offices,” William Booth and Antonia Noori Farzan report. “The Oxford-AstraZeneca team said in a video conference with journalists that their vaccine’s average efficacy was 70 percent, reflecting the disparate results from two different dosing regimens,” they write. “When two full doses were given at least one month apart, efficacy fell to 62 percent. But it rose to 90 percent when subjects received only a half dose, followed with a full dose one month later.”
The Food and Drug Administration’s coronavirus vaccine advisory committee is set to meet on Dec. 10 to discuss Pfizer and BioNTech’s application for emergency use authorization for their coronavirus vaccine. If approved, vaccines could be shipped to states within 24 hours, Moncef Slaoui, the head of Operation Warp Speed, the federal government’s coronavirus vaccine program, told CNN on Sunday.
Pfizer and BioNTech applied for emergency authorization on Friday after they said that a final analysis of data from clinical trials showed their vaccine to be 95 percent effective. Biotechnology company Moderna has released similarly promising early results and is expected to apply for emergency authorization before the end of the month.
Source: Washington Post