How Policy Changes in Washington Could Disrupt Health Care

During Asembia’s 2018 Specialty Pharmacy Summit, Bruce Japsen, Health Care Contributing Writer at Forbes conducted a Q&A with Matt Brow, executive vice president and general manager at Avalere, digging into how forthcoming policy changes in Washington could impact the health care industry in the near future. 

Mr Japsen asked what we can expect from Washington regarding the new policy to reduce drug prices. He further asked whether we should expect substantive policy changes or a repeat of past executive orders that have failed to have much actual impact.

“We saw that in the Obamacare reforms, the executive order comes out, it’s posted, nothing has happened,” Mr Japsen said. “I listen to every insurance companies’ earnings call and nobody is even talking about selling the plans that Trump says he wants to create.”

Mr Brow started the discussion by explaining that two recent changes directed by the Trump Administration should inform forthcoming changes.

The first change highlighted by Mr Brow was the recent reform of the 340B reimbursement program by the CMS. This reduced reimbursement to 340B hospitals by 28%, and should have meaningful impact on the prices Medicare beneficiaries pay for drugs. Mr Brow explained that a controversial change like this points to the Administration’s willingness to advance policy that has impact on the patient and upholds conservative ideals, despite massive pushback from the health care industry. 

“The general concept here is effectively that the Administration lowers patient-experienced drug costs, lowers tax payer’s experience of drug expense, and doesn’t worry about the political ramifications of a particularly powerful political class whose ox was being gored in that instance,” he said.

The second change highlighted by Mr Brow was an item in the Trump Administration’s budget proposal that required pharma to lower the coverage gap for Medicare Part D beneficiaries. A change like this signals the potential for Medicare Part B to see similar changes, like moving it into a managed situation or bringing in a third-party entity like a PBM to engage in the part B space.

Flipping The House & Senate

Mr Japsen asked Mr Brow what happened to health care policy in the United States if a branch of Congress, either the House, Senate, or both, flip to Democratic Party control in November 2018?

Mr Brow said  he thinks if Congress changes hands  it will make health care policy more difficult .

However, he explained that based on the past 16 months, that the Trump Administration seems to be willing to take full advantage of their executive authority and are not afraid to see how far they can push the envelope in order to make changes.

“Over the last couple of decades we’ve seen successive increases in executive administrative authority,” Mr Brow said. “This administration seems likely to continue to take action that does not require Congress.”

He added that it is unlikely that either a Democratic or Republican controlled Congress would be able to  use legislative means to overturn the types of things that President Trump might do for health care policy—like changes to HHS and CMS rulemaking—which all fall under the purview of the Administrative branch.

Federal Outcomes-Based Contracting 

Mr Japsen also asked whether we should expect there to be any outcomes-based contracting at the federal level, given recent announcements from The Center for Medicare & Medicaid Innovation (CMMI) that recently proposed novel payment methods for gene therapy products.

Mr Brow said that outcomes-based pricing is likely, given the broad authority granted to the CMMI and the current Administration’s view on Medicaid experimenting through waivers. He said that the flexibilities being granted to Medicaid through waivers gives it the ability to increase activities in outcomes-based pricing.

—David Costill