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Radar On Market Access: Biden Administration's Drug-Pricing Moves May Be Limited

Posted by Leslie Small on Nov 17, 2020


As is the case for other flavors of health care reform, President-elect Joe Biden's chance of passing substantial, transformative drug-pricing legislation is now highly dependent upon whether Democrats can eke out a majority in the Senate. While that question won't be resolved until Georgia completes runoff elections in January, industry observers point out that there are still ways that a Biden administration can address drug pricing, AIS Health reported.

"A president can do a lot even with a divided Congress," says Stephanie Kennan, a member of McGuireWoods Consulting's federal public affairs group. "Part of how well something gets done…depends upon the skills of the president or those negotiating for him. With Biden perhaps having a better understanding of the Senate, having come from the Senate, [that] might help him."

During a webinar held on Nov. 5, Avalere Health experts highlighted restructuring the Medicare Part D benefit as an area of potential bipartisan compromise. "I see something like that packaged with the health care extenders that'll need to move in 2021," said Chris Sloan, an associate principal at the consulting firm.

Yet Kathryn Bakich, the National Health Compliance Practice Leader at Segal, says that adding an out-of-pocket cost cap in Part D could raise some concerns from employers. "The problem with that is for employer-sponsored plans that have a Part D program, that could make the value of that program less to them," she says.

In a Nov. 3 note to investors, Leerink SVB analyst Geoffrey Porges pointed out that using regulatory authority to rein in drug prices won't have as large of an impact as legislation would. "Drug pricing mechanisms implemented via executive order are likely to be limited to a small class of higher-priced drugs within Medicare and Medicaid, with expansion to the commercial side requiring congressional action," he wrote.

Porges also argued that regardless of who is in charge of the federal government, "the PBM system is likely to remain a target of future reforms."

Going forward, it's likely that "lawmakers will focus on the incentives governing formulary decisions and rebates in considering drug pricing reform, although the vehicle for this change is highly uncertain," he wrote.

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Topics: Industry Trends, Payer