employers

HHS Explains MFN Drug Price Approach The Department of Health and Human Services (HHS) issued guidance regarding President Donald Trump’s recent executive order regarding adopting most favored nation (MFN) drug pricing throughout the country. If Big Pharma brand drug makers were not worried before, they should be now. An HHS press release laid out expectations for how drug makers will engage with the order. It notes all brand products that do not currently have generic or biosimilar competition across all markets (lines of business) are covered. It says drug companies must “commit to aligning” their U.S. prices with “the lowest price of a set of economic peer countries.” The peer group is the so-called rich nations as represented by the Organization for Economic Co-operation and Development countries and that have a gross domestic product (GDP) per capita of at least 60% of the U.S. GDP. Big Pharma came out swinging,

House Budget Committee Advances Reconciliation Bill After a high-profile defeat Friday, the House Budget Committee advanced the budget reconciliation bill with $625 billion in Medicaid reductions Sunday night. Four House Freedom conservatives in the GOP caucus voted present to advance the bill, apparently with commitments that changes will be made to the bill. A prominent conservative, Chip Roy, said work requirements would be accelerated. He also mentioned the need for steeper provider tax cuts and a rollback of the enhanced reimbursement for the Medicaid expansion. If all House moderates are on the bill now (a big if), they would likely jump off with steeper Medicaid cuts. Providers and doctors are sounding the alarm on coverage losses, lower state dollars, administrative costs, and red tape. Health policy group KFF published two briefs: one on the 15 states that would be impacted with lower reimbursement if they maintain undocumented immigrants and the

Conservative Rebellion On Budget Bill Conservative House members on the Budget Committee sent shock waves through the Capitol Friday when they stopped advancement of the budget reconciliation bill over a lack of sufficient spending cuts. In some ways, the meltdown could be predicted, but the fact that the five conservatives defied the wishes of the president and leaders showed just how fragile the GOP’s hold on Congress is. Speaker Mike Johnson already had a huge issue on his hands when it came to moderates from Blue states asking to increase state and local tax reductions. Now, he has the conservatives off the bill, which could then spur more moderate concern if cuts go deeper. Principally, the conservatives want work requirements to be imposed much earlier than 2029 and to see tighter eligibility in Medicaid. They complain that cuts are backloaded and spending front-loaded. The bill will be discussed behind the

Budget Reconciliation Saga House Freedom Caucus members could sink the budget reconciliation bill coming out of the Budget Committee for lack of enough reductions and weak Medicaid policy changes. Conservatives are pushing for an acceleration of work requirements from the current plan targeted for 2029. At the same time, moderates are upset with the scope of Medicaid reductions. House Speaker Mike Johnson also said that the proposed bill would be changed to enhance state and local tax deductions as well as increase Medicaid savings. But the latter could further upset moderates. The current reductions fall disproportionately on states, which will have to make up hundreds of millions of reimbursement reductions, as well as enrollees, who could lose coverage. Another controversy is ambiguous language regarding provider taxes. While new provider taxes are barred, it is unclear how long existing taxes would be grandfathered or whether renewing current provider taxes would be

Medicaid Cuts Advance In House After a marathon overnight hearing where lawmakers literally fell asleep in their chairs, the House Energy & Commerce Committee advanced on a party-line vote deep Medicaid spending reductions in the budget reconciliation process. The cuts amount to $624 billion in Medicaid over 10 years. New provider tax bans, cost-sharing for certain populations, and work requirements are some of the largest reductions. Democrats proposed to tackle Medicare Advantage (MA) overpayments instead. They, too, wanted to use savings from President Trump’s recent executive order to reduce drug pricing. While the reductions advanced, a deep divide is quickly emerging. Moderates and conservatives are still at odds in the House. Conservatives claimed that the reductions are not deep enough, while many moderates could be off the bill due to the existing Medicaid cuts. Some moderates and pragmatic conservatives in the Senate are also concerned about the Medicaid cuts. In

Providers React To Medicaid Cuts Protests broke out at the Capitol and providers and advocates reacted to Medicaid reductions in a draft framework of the budget reconciliation bill. Provider taxes are especially getting attention. The bill proposes to freeze all new provider taxes, while a proposed administration rule would rein in what the administration calls provider-tax waivers that violate the spirit of the law. Limits on state directed payments, often funded by provider taxes, would occur as well in the reconciliation bill. In other news, the Trump administration says it plans on revisiting the mental health parity rule. In addition, doctors appear to be on the verge of some relief in terms of a Medicare physician rate fix. While no relief will be granted in 2025, in 2026 rates would increase by about 2.25% and future increases would be linked to the Medicare Economic Index, which generally rises faster than

Trump Backs MFN Drug Pricing President Donald Trump expanded his drug reform proposals today by announcing an executive order that seeks to implement the strictest form of international reference pricing (IRP) known as most favored nation (MFN) status pricing. Americans would receive the lowest price for a drug offered anywhere in the world. It appears that the proposal would be for all Americans – across Medicaid, Medicare, and commercial products. Trump said in a social media post that savings would be 30% to 80%. Another report narrowed the number to 59%. Trump said that the most expensive drugs would perhaps be attacked first. His MFN proposal builds on a rule he attempted to implement for Medicare Part B medical drugs back in Trump 45. It was eventually rescinded by the Biden administration after being struck in court. While the idea was good, it did have many implementation challenges. At the

Medicare and Medicaid Cover GLP-1s For Disease States Other Than Obesity The Hill has a good article explaining what the coverage of GLP-1s is in Medicare and Medicaid. Generally, GLP-1s are covered for disease states such as diabetes and cardiovascular diseases, but not for obesity alone. In the commercial world, some employers cover the drugs for obesity alone. In addition, drugmakers Eli Lilly and Novo Nordisk market their GLP-1 drugs under different names. Here is the skinny so to speak. The brand drug makers are looking to expand these drugs to other disease states. Novo Nordisk: Ozempic – for treatment of diabetes Wegovy – for weight loss and cardiovascular disease Eli Lilly: Mounjaro – for treatment of diabetes Zepbound – for weight loss and certain sleep apnea. #branddrugmakers #drugpricing #glp1s #weightlossdrugs https://thehill.com/policy/healthcare/5290997-medicare-medicaid-coverage-weight-loss-drugs CVS Being Sued Over Alleged Fraud Four state attorneys general are suing CVS Health and its pharmacies for

Drugs: Trump May Propose MFN; PBMs Using Various Ways To Control GLP-1 Costs Politico reports exclusively that Donald Trump is on the verge of proposing most-favored nation (MFN) pricing, the strictest form of international reference pricing, to lower drug costs. The executive order would cover the Medicare program for now, but recently the president urged MFN for Medicaid as well. The move would be a major confrontation with the brand drug industry. I have argued Trump’s populism would win out here and he would propose something like this. My blog on the topic: https://www.healthcarelabyrinth.com/expect-big-things-from-donald-trump-on-drug-prices/ . In other news, pharmacy benefits managers (PBMs) are using various and disparate ways to reduce GLP-1 weight-loss drug trends. CVS has dropped Zepbound in favor of Wegovy in the commercial world. It is also using NovoCare, Novo Nordisk’s direct-to-consumer platform for GLP-1s. Humana will also use NovoCare. In 2024, Cigna launched EncircleRx, a program that controls

Trump Says Drug Tariffs Coming President Donald Trump announced that he plans to impose tariffs on pharmaceutical products within the next two weeks. In addition, he issued an executive order directing the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and other agencies to facilitate domestic pharmaceutical production and to raise fees for inspecting foreign drug plants. Health plans and pharmacy benefits managers (PBMs) have had a mixed reaction to the imposition of tariffs. CVS Health and Centene see impact that they are studying now, while United Healthcare said it has less concern. Over time, prices will be passed through the supply chain and ultimately to health plans, which will have to pass on costs to employer groups. Government programs would over time recognize cost hikes as well. At the same time, tariffs costs could end up in diminished formularies and higher cost-sharing. The Pharmaceutical Research and Manufacturers