8:23 PM
 | 
Oct 26, 2018
 |  BioCentury  |  Politics, Policy & Law

Trump’s divide and conquer Part B plan

Trump using a divide and conquer approach to Part B drug plan

While its rollout was timed to provide Republicans with ammunition in the last-minute run to the mid-term elections, the Trump administration’s proposal to revamp Part B drug payments won’t go into effect until 2020, at the earliest.

The biopharma industry, which loathes both the specifics of the plan and the precedents it would set, has about a year to derail the White House effort or water it down. Most galling to the industry is the plan to create an international reference pricing scheme.

The politics of Part B drugs is framed by the nature of the products covered: drugs that are infused or injected under a physician’s supervision, usually in a doctor’s office or a hospital outpatient facility.

The ability of any administration to dramatically change the Part B reimbursement scheme depends on its ability to obtain the consent of at least two of the three sectors that are affected by the prices of Part B drugs: drug companies, physicians and hospitals.

Any of these sectors alone might not have the political power to prevail, but the combined strength of any two is sufficient to overpower the president.

The Obama administration’s attempts to remodel Part B were scuppered by this reality when lobbyists for physicians, hospitals and biopharma created a groundswell of opposition that led to a revolt by members of Congress.

By contrast, President Trump and HHS Secretary Alex Azar have embraced the politics of vilifying big pharma, so the fate of their plan will be determined by their ability to bring on board physicians, especially oncologists and hospitals.

“The president’s @WhiteHouseCEA warns that socialist price controls are detrimental to the health and well-being of patients, while @HHSGov moves to impose these very same price controls on #Medicare and America’s seniors.”

Tweet from BIO

The outcome isn’t assured, however, even though Azar is offering doctors and hospitals a higher effective add-on payment. Initial comments from oncology associations raise questions about whether patient care should be subject to policy experiments.

Azar also is suggesting that U.S. prices for Part B drugs would remain higher than in other nations.

That’s not enough for BIO and PhRMA, which have already attacked the scheme as the importation of socialized medicine.

The plan would be launched through the CMS Center for Medicare and Medicaid Innovation, beginning with a pilot program in 2020. A CMMI pilot can be put it into effect without legislation, but Congress ultimately could block its implementation or mandate changes.

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The HHS plan is predicated on the notion that the government overpays for Medicare Part B drugs under a reimbursement system in which physicians and hospitals purchase...

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