Home

Importing Prescription Drugs Will Create More Problems than it Solves

September 11, 2019
12:03 pm

Several years ago, there was a significant push in Congress to allow wholesale importation of prescription drugs from other countries into the United States.  The Healthcare Leadership Council found itself in an opportune position to examine this idea, given that our membership includes not only pharmaceutical manufacturers and healthcare payers, but also the companies that would facilitate the distribution of these imported products.

We found that the promised cost savings from importation were an illusion.  When shipping, relabeling, storage, liability coverage and other costs were factored into the mix, the cost differential between medicines in this country and those from countries that employ government price controls was largely erased.  It has never been surprising that HHS Secretaries and FDA Commissioners from both Republican and Democratic presidential administrations over the years have attested that the risks connected with drug importation far exceeded any possible rewards.

But now the issue is back in a big way.  States – including Vermont, Colorado, and Florida – have passed legislation to set up their own drug importation programs, pending federal government approval, and the current administration has indicated a willingness to work with them in making this happen.  Also, Congress is once again considering importation legislation. This is troubling.

The only difference between the drug importation issue today and when we first examined it is that the dangers have exacerbated while the benefits have not.  There are certain facts that policymakers should keep in mind when contemplating the prospects of opening our borders to drugs from outside the U.S.

  • We already have a drug crisis in this country, much of it fueled by the proliferation of lethal fentanyl that is originating in other countries and finding its way here through our ports and via the international mail service.
  • The world is facing an enormous health challenge driven by the increase in counterfeit drugs. The World Health Organization has estimated that one in every 10 pharmaceutical products in low- and middle-income countries is falsified or substandard.  Opening our borders increases our exposure to this danger.
  • Since we first examined this issue, there has been an explosion in the number of online pharmacies.  According to the National Association of Boards of Pharmacy, there are over 35,000 online drug sellers and 96 percent of them are in violation of applicable laws.  Many of these operations are based in Canada, the nation often cited as the safe place from which to import drugs.
  • And just to dispense with the notion that importing drugs from Canada will drastically lower prices, the numbers simply don’t work.  Canada’s population is barely more than one-tenth that of the United States and our neighbors to the north have already been enduring problems with drug shortages.  The idea that Canada can provide a sufficient supply of prescription medications to meet American demands is ludicrous.

By all means, we should be having a national conversation on healthcare affordability and accessibility in the United States, seeking solutions that will ensure patients have access to the treatments they need while also maintaining an environment that incentivizes lifesaving medical innovation.  A serious discussion requires credible ideas, though, and drug importation doesn’t fit that bill.

Much to Applaud as Health Exchange Open Enrollment Season Begins

October 31, 2018
12:45 pm

The open enrollment season for the federal health insurance exchange begins tomorrow, November 1, and runs through December 15 for coverage that will become effective at the start of 2019.  Consumers will notice some significant improvements this year when they begin the process of selecting a health plan.

The most important of these is price.  Average premiums, as measured by the second-lowest-cost silver plans, will drop for the first time since the exchanges began in 2014.  The average 1.5 percent price reduction is a striking change from the average double-digit increases that have been seen in recent years and tells us that steps taken to stabilize the marketplace have had a positive effect.

I want to also credit Seema Verma and her team at the Centers for Medicare and Medicaid Services (CMS) for some important changes that have been made on the healthcare.gov website to assist consumers in finding the right health plan to fit their needs.

Among those changes are an improved interface (based on consumer input), an enhanced tool to help users search for local agents and brokers who can assist them in selecting and enrolling in a plan, and a “window shopping” function that allowed consumers to browse plans and prices even before open season began and without having to fill out an application.

Improvements like these are making the health insurance exchanges more of a consumer-focused system and the reduction in average premium prices is welcome news indeed for those of us who want to see the competitive marketplace succeed

Medicare Part D Facts Keep Getting in the Way of Politics

August 10, 2018
11:56 am
It’s campaign season, so that means we’re seeing an escalation in the number of politicians who insist that the federal government must involve itself in “negotiating” prices for the Medicare Part D prescription drug program.  (I put negotiating in quotations because it’s a misnomer to suggest that government negotiates in the understood sense of the world.  It is closer to reality to say that the feds set prices.)
The problem with this assertion regarding Medicare Part D is that the facts keep getting in the way.
Last week, the Centers for Medicare and Medicaid Services announced that average monthly premiums for Part D plans are expected to drop from $33.59 in 2018 to $32.50 in 2019.  This is the second consecutive year in which average premiums will have declined and follows several previous years in which premium levels remained relatively flat.   In other words, the inference that urgent action is needed to fundamentally change the Medicare Part D structure isn’t supported by any evidence that consumers are being harmed by the status quo.
In fact, the approach employed when Congress created the Medicare prescription drug program just over a decade ago remains just as viable today.  The best way to maintain affordability is to empower consumers to select from several competing drug plans on the basis of value.  Part D enrollees will naturally gravitate to the plans that cover the drugs their physicians prescribe and do so at affordable cost.
That’s not to say there aren’t actions that need to be taken regarding Part D.  For example, Congress needs to act expeditiously to address the “out of pocket cliff,” the forthcoming change in the out-of-pocket spending threshold that must be met in order to qualify for catastrophic coverage.  If not address, this “cliff” will cost beneficiaries several hundred dollars that many can’t afford.
On the whole, though, when politicians tell you this political season that we need a heavier government hand in Medicare Part D pricing, please be aware that the numbers don’t back up that claim.

Heroism Shouldn’t Be Discouraged By Legal Concerns

August 08, 2018
1:13 pm

There is legislation – the Pandemic and All-Hazards Preparedness Reauthorization Act – moving through the U.S. Senate right now that is essential in reauthorizing critical programs improving our public health infrastructure and response capabilities whenever an emergency occurs, last year’s hurricanes in Puerto Rico and the Gulf Coast still being all too fresh in our memories.  There is a provision in this measure that deserves highlighting.

The House of Representatives Energy and Commerce Committee included language from the Good Samaritan Health Professionals Act.  The Good Samaritan legislation essentially protects medical volunteers who offer their services during a large-scale disaster from lawsuits.  When a tornado, hurricane, or even a major pandemic strikes, we want physicians, nurses and other medical professionals to rush to the scene and provide their healing expertise to victims.  Due to inconsistencies in federal and state medical liability laws, though, these volunteers risk being turned away or having their assistance limited because of lawsuit concerns.

This legislation ensures that our priorities are in the right place – making sure that people in urgent circumstances receive the help they desperately need.  This legislation had bipartisan support in the House and we look forward to it receiving the same level of backing in the U.S. Senate.  The legislation must pass both houses before September 30.

Quantifying the Medicare Advantage advantage

July 25, 2018
2:51 pm

In the 15 years since its inception, the increase in popularity of Medicare Advantage (MA) – health coverage provided by private plans in contrast to traditional fee-for-service (FFS) Medicare – has been undeniable.  Roughly half of all Medicare-eligible seniors are enrolled in Medicare Advantage plan and that proportion keeps rising.

Now there is a new addition to the growing body of evidence that MA plans are not only serving their enrollees well, but is bringing greater overall value to the Medicare program than that generated by the FFS approach.

A newly-released study by Avalere Health, Medicare Advantage Achieves Better Health Outcomes and Lower Costs for Beneficiaries with Chronic Conditions Compared to Fee-for-Service Medicare, finds that Medicare Advantage is outperforming traditional FFS Medicare with higher rates of preventive screenings, fewer avoidable hospitalizations, and fewer emergency room visits.  In other words, healthier patients and significant dollar savings.

Overall, the Avalere study found that MA beneficiaries had 23 percent fewer emergency stays and 33 percent fewer emergency room visits than their peers in FFS coverage.  This wasn’t the result of MA plans enrolling healthier individuals at the outset.  Rather, the study found that a greater percentage of MA beneficiaries were in clinical and social risk categories that traditionally drive up costs in FFS Medicare.

Avalere found that MA outperformed FFS on a range of cost, utilization, and outcome metrics in caring for individuals with one or more chronic health conditions.  Among patients with diabetes, for example, those enrolled in MA experienced 73 percent fewer serious clinical complications than FFS beneficiaries.  And patients dually eligible for Medicare and Medicaid – who generally have more complicated and serious health conditions – had 49 percent fewer hospital visits and a 17 percent lower average-cost-per-beneficiary in MA plans.

Former Congresswoman Allyson Schwartz, president and CEO of the Better Medicare Alliance (of which the Healthcare Leadership Council is a member) said “this study adds to the growing body of evidence showing the ability of Medicare Advantage to align incentives to better manage the care for a high-need population with multiple chronic conditions.”  These patients, of course, account for the most significant portion of our country’s healthcare spending.

This study adds fuel to the argument that we can enhance healthcare quality and better contain spending through improved patient health when healthcare entities compete on the basis of value.