What does the Build Back Better Act mean for the healthcare sector?

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Biden’s major investment in antiviral drugs

In a somewhat notable legislative move in September, the federal government moved to give pharmacists a much larger pandemic response role – specifically by enabling them to prescribe and administer Covid-19 treatments.

Now, with Covid-19 antiviral drugs from Pfizer and Merck on the way, the change could go a long way toward solving the biggest problem with the upcoming rollout of these new drugs: Logistics.

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Although the drugs have been cast as pandemic game changers, my colleague Lev Facher writes this morning, fundamental infrastructural problems with the US health care system can prevent them from reaching the hands of those who need them most.

The antiviral drugs should be taken as soon as possible after the onset of symptoms – ideally within three days, in many cases. But it requires four steps: Recognizing symptoms, testing positive for Covid-19, getting a prescription and picking up the pills at a pharmacy. There are many braces to jump through, and as a result, many public health experts are skeptical that the treatments will make a big dent in hospitalizations and deaths. However, the Biden administration has a plan: Read more here.

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What does the Build Back Better Act really mean for the healthcare sector?

If you’re like me, you’ve spent the last many weeks so entangled in the daily negotiations over the Democrats’ signature price for drug prices that you have not had time to breathe and actually think about what this package is. of policies actually mean for the healthcare sector. Now that Parliament has passed their bill and left for the Thanksgiving holiday, I think it’s time to do just that. Here are a few of my biggest questions about the Build Back Better Act.

Is the Build Back Better Act a death knell for insulin manufacturers?
Do not count on it.

The legislation is certainly aimed at lowering insulin prices: it would let Medicare negotiate the price of any insulin, and it would require drug manufacturers to offer the federal government at least a 60% discount on the average price they offer other drug wholesalers for the three. most popular insulins. And there’s the popular $ 35 ceiling on insulin costs, which my colleague Rachel has more about below.

But financial analysts and drug pricing experts speculated that the policy would have a minimal impact on insulin manufacturers’ bottom lines (though several warned that the exact impact of the policy would depend on how hard the federal government negotiates with insulin manufacturers).

This is because insulin manufacturers already offer significant discounts on private insurance schemes that offer Medicare drug coverage. Drug manufacturers do not reveal the exact discounts they offer – so it is impossible to see the exact effect of the Democrats’ bill. However, insulin manufacturers have published reports in recent years showing that existing discounts continue to grow and that average discounts on insulin range from 50% to almost 80%.

Will drug manufacturers stop raising their list prices every year?
It seems likely.

Craig Garthwaite, a professor at Northwestern University, told STAT that it would not make rational sense for drug manufacturers to raise their prices more than inflation if Democrats’ bills were passed, because of the provision that would force them to repay taxpayers all that. profits they make by raising their prices more than inflation.

But do not expect the policy to solve all of America’s drug pricing issues. Garthwaite predicted that drug manufacturers would compensate by launching new drugs at even higher prices, even though that means fewer people are taking these drugs. They could also try to play the system by launching new versions of drugs so that they are not exposed to the price increase penalty.

Do Democrats’ bills hurt insurance companies?
That’s really hard to say.

While all attention has been focused on how the Democrats ‘plan will affect drug manufacturers, the package also includes a massive redesign of the complicated scheme by which drug manufacturers, seniors, government and insurance companies split seniors’ drug costs.

For example, the bill would require insurance plans to collect 60% of seniors’ medical expenses when seniors spend $ 2,000. This is a sharp increase compared to the 15% of the costs they previously had to cover in the so-called catastrophic coverage phase.

Already, at least one insurance company has indicated that such a severe increase in insurance companies’ costs will force them to raise their premiums.

But drug manufacturers are still complaining that the bill does not actually reform the role of the insurance industry in the U.S. drug pricing system. The PhRMA recently lamented that the bill “will make a broken insurance system worse” and “does not address perverted incentives in the system that lead to higher costs for patients.”

Protection of insulin costs trapped in reticulum

One of the Democrats’ most popular provisions in their massive social safety net package is a drug pricing policy that will limit the purchase price of insulin to $ 35 a month for patients at Medicare and in private insurance companies. But that provision risks running counter to the Senate’s strict budget rules, and Senate Majority Leader Chuck Schumer is already launching a public offensive to save it, reports my colleague Rachel Cohrs.

There are a lot of complicated rules governing what policy can be lumped into the streamlined budget process that Democrats use to pass legislation without GOP support – but, importantly, a provision will only be knocked out if a senator protesting against it.

Schumer hopes the insulin cover is too politically popular for even Republicans to reject, but a Republican aide has already told the STAT that the party sees it as their responsibility to enforce the rules, regardless of the political benefits.

Gordon Gray, director of fiscal policy at the conservatively oriented American Action Forum, said the provision limiting insulin costs in the private insurance market is likely to be more exposed than Medicare policy.

Cinema on the record of drug prices

Late. Kyrsten Sinema (D-Ariz.) Is a woman with few words in public, so it is rare to get an insight into her mindset on a particular political issue. Today, we have more insight into her stance on drug pricing policy in a letter that her office quietly sent to Arizona State lawmakers last week, reports my colleague Rachel Cohrs.

Sinema highlights its role in the negotiations, and in particular takes ownership of pushing the above provision, which will limit the monthly cost of insulin to $ 35 per. month – the original framework, House moderate had proposed to set the ceiling at $ 50 per month. month. She speaks in luminous terms about the agreement, repeating her previous support for the agreement.

“Our agreement represents a smarter way to lower drug costs compared to previous plans based on government pricing for almost all drugs, which could have stifled medical innovation and reduced the development of new cures,” the letter reads.

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