Tuesday Tidbits

David Ermer–Uncategorized–

OPM Acting Director Margaret Weichert held a press roundtable today about the agency reorganization. Govexec and the Federal Times have reported on this event. Moreover, Govexec has shared an OPM document explaining the reorganization and the underlying rationale therefor.  Acting Director Weichert will be presenting her case for reorganization to the House Oversight and Reform Committee next Tuesday May 21.

The Health Affairs blog discusses a bipartisan proposal to fix the surprise billing problem (“with the notable exception of ambulance service”) that the House Energy and Commerce Committee unveiled today. “The [proposed] legislation achieves this objective by combining the following three components:

  • Require the health plan to treat the out-of-network service as if it were in-network for purposes of enrollee cost-sharing, deductibles, and out-of-pocket limits;
  • Set a minimum payment amount that the health plan must pay to the out-of-network provider; and
  • Prohibit out-of-network providers from “balance billing” patients — that is, from billing the patient any amount above the patient’s in-network cost-sharing.
These components would apply to all types of commercial health plans, both insured and self-funded, including FEHB plans.
Fierce Healthcare discusses an American Hospital Association report on how hospitals can save millions by improving patient access to behavioral healthcare.  OPM raised this access issue in its call letter for 2020 benefit and rate proposals. FEHB plans should consider encouraging the use of hospitals that follow the AHA’s advice. 
On the Rx front —
  • The Wall Street Journal considers a price fixing lawsuit filed by over 40 state attorneys general against various generic drug manufacturers.  “the allegations highlight a basic health-care truth: All companies, including those charged with keeping spending in check, prosper when prices go up.” However, “sn industry trade group accurately pointed out Sunday that generic-drug prices have declined overall for years. What is more, total generic-drug spending is a fraction of overall drug costs and a rounding error in the context of total U.S. health spending.”
  • Fierce Pharma reports that AbbieVie, which manufactures the wildly successful specialty drug Humira, reached a settlement with the last of the biosimilar manufactuers that was preparing to bring a product to market fairly soon. 

Thanks to the latest settlement, AbbVie’s Humira looks safe in the U.S. until 2023, even as biosimilars have started eating away at the drug’s European sales. After the EU copycats launched last fall, AbbVie reported a 23% decline in first-quarter Humira sales outside of the U.S., to $1.23 billion. The drug’s U.S. sales grew 7% to $3.2 billion.

As of now, Amgen will have the first crack at Humira’s lucrative U.S. market. That company was the first to strike a patent settlement with AbbVie and secured a Jan. 31, 2023, launch date. On the other end of the spectrum, Pfizer late last year inked the seventh patent deal with AbbVie, agreeing to a Nov. 20, 2023, biosimilar rollout.  

  • Healthcare Dive reports that U.S. District Judge Richard Leon has ordered three days of hearings beginning June 4, 2019, to hear witnesses testifying about the impact of the CVS acquisition of Aetna on the Medicare Part D market. Judge “Leon is tasked with deciding whether the DOJ settlement is in the public interest under the Tunney Act, which gives courts the power to review DOJ decisions. He can’t sink the deal, but he can rule that the settlement didn’t go far enough to protect consumers.” 
Yesterday, the U.S. Labor Department issued guidance clarifying its March 2019 enforcement relief for so-called pathway 2 association health plans that were engaged in business before a federal district judge struck down pathway 2. That district court decision has been appealed to the U.S. Court of Appeals for the D.C. Circuit.