On January 9th, the Senate Committee on Finance conducted its nomination hearing of Alex Michael Azar II, President Trump’s nominee for Secretary of Health and Human Services. Under President George W. Bush, Mr. Azar served in HHS, first as general counsel to HHS and then as deputy secretary. Mr. Azar was more recently an executive at Eli Lilly and Company. As summarized here, Mr. Azar received many questions regarding Medicaid, CHIP, the Affordable Care Act, and most notably and often, drug prices. Continue Reading Azar’s Nomination Hearing Highlights Medicare Negotiation of Part B Drug Prices

There has been much controversy over the Medicare Part B payment demonstration proposed by the Center for Medicare and Medicaid Innovation (CMMI) in March 2016.  As we await the release of the final rule, the fate of this demonstration will be in the hands of a Republican-held Congress and President-Elect Trump.  To move forward, not only will CMMI need to finalize the implementing regulations, but the Part B payment demonstration will also need to survive review under the Congressional Review Act (CRA). Continue Reading The Future of the Medicare Part B Payment Demo under a Republican-held Congress

Last week, the Centers for Medicare & Medicaid Services (CMS) and the Pharmaceutical Research and Manufacturers of America (PhRMA) released proposals to address recent criticism over rising drug prices.  CMS proposed to tackle the rising cost of drugs paid under Medicare Part B by testing an alternative payment model for Part B drugs and biologicals.  Only days after CMS released its proposed rule, PhRMA issued a set of policies to address the high-cost of drugs.  Central to both CMS’s proposed rule and PhRMA’s policies is the use of value-based purchasing.

CMS’s alternative payment model includes two phases.  If finalized, the first phase would change the statutory 6 percent add-on to Average Sales Price (ASP) that is paid to physicians and suppliers to 2.5 percent plus a flat fee of $16.80.  CMS believes that this change, and specifically the change to a flat fee, will minimize providers’ and suppliers’ financial incentives to prescribe more expensive drugs.  Continue Reading Tackling Drug Prices: CMS and PhRMA Propose Steps to Promote Value-Based Purchasing