The Impact of Policy and Politics on Health and Drug Pricing

Jessica Miller

December 2016, Vol 7, No 11 - Health Policy


Washington, DC—A panel discussion on health and drug politics took place at the Sixth Annual Conference of the Association for Value-Based Cancer Care. The expert panel included Kavita Patel, MD, Johns Hopkins Medicine, Baltimore; Dan Todd, Principal of Todd Strategy, Washington, DC; and Liz Fowler, Vice President, Global Health Policy, Johnson & Johnson. The panel discussed what is working in healthcare, what is not, and where cancer care fits into it all.

According to Dr Patel, the healthcare industry is doing a lot right, especially the acceptance and use of technology. As a practicing physician, Dr Patel knows that although most electronic health record systems are not perfect, they have less safety concerns than when everything was done with a pen and paper.

Technology is also crucial in supporting and making other physicians aware of “our delivery system reform culture,” said Dr Patel.

“I have yet to meet a physician, even in a rural part of a state, who hasn’t heard of an ACO [accountable care organization], or at least heard about some of these concepts, even if they’re not a part of them themselves,” she said.

It is not just physicians who are taking note of the Centers for Medicare & Medicaid Services (CMS) initiatives; payers are as well. “I’ve watched now private payers trying not necessarily to mimic or mirror but…trying to match or align what public payers are doing,” Dr Patel said. “Despite some of the pricing distortions…I think payers and providers are starting to sense that there’s a shift of some kind,” she added.

So the question remains—will cancer care come out on a positive note with that shift?

“I’m hopeful that we will,” said Dr Patel. “I’ve never seen oncology more fired up about conversations around oncology, medical homes, or oncology accountable care organizations. Right now, a lot of that is just words. I think the key is going to be to fast forward 2, 3, 5 years, and see if we’ve made a measurable difference,” she added.

According to Ms Fowler, however, a measurable difference has already been made in healthcare.

“I think one of the most important trends is that our uninsured rate is now below 9% for the first time in this nation’s history,” Ms Fowler said. “I think that’s really significant….That’s a real accomplishment, and something we should all be proud of.”

Although more people may have health insurance, the coverage they have leaves much to be desired. “I’m very concerned about some of the out-of-pocket spending, out-of-pocket costs, the very high deductibles that represent a real barrier for patients. I think that’s something to pay attention to,” she said.

Nevertheless, the passage of the Affordable Care Act into law is an accomplishment, despite its shortcomings, Mr Todd said.

“If you’ve looked at the last Congress, which hasn’t had terribly great successes, but you did have a delivery system reform bill that came out of the Congress that was unanimously voted out of the Finance Committee, nearly unanimously voted out of the…Energy and Commerce Committee, and taken to the floor of both chambers and passed in a huge bipartisan manner,” he said.

“When you think about the scar tissue of the Affordable Care Act and the debates around it, the fact that Congress could get around to doing something together on focusing on some of these issues that are awfully sticky and coming to agreement is a testament to the leadership that they set forward with,” Mr Todd added.

Congress’s Impact on Healthcare

Political involvement in healthcare is only going to increase, as evidenced by the surge of political leaders criticizing the excessive executive authority of the Center for Medicare & Medicaid Innovation (CMMI), Mr Todd said.

In the past several years, CMS has announced several innovative programs and models, but not all are well-received by healthcare stakeholders. A prime example of this is the Medicare Part B Drug Payment Model, which is “a mandatory program impacting more than 90% of the country with very little buy-in,” said Mr Todd.

When this model was announced, the overwhelming majority of comments from healthcare stakeholders were negative, said Ms Fowler.

“The unfortunate thing is that, at the heart of it, getting to better value is something that everyone can support,” she said.

Many companies and individuals want to move toward value-based care but believe that CMS should pull back and rethink its ideas. “It almost feels like it’s set the movement back a little bit rather than pushing it forward….Trying to go too far too fast with a mandatory program was not going to be in the cards,” said Ms Fowler.

CMS is now facing backlash amidst calls to reel back its authority.

“As a result, you now have very active discussions within political leadership on the Republican side about the excessive executive authority of the CMMI,” said Mr Todd. “Typically, in my experience, Medicare gets into trouble when they make process fouls, because Congress knows that they can’t really get into a debate about the right price of a technology. They can’t get into a debate about what the right clinical evidence is. They sure as heck can talk about process and good government.”

Increasing Role of Congress

Congress’s involvement in drug pricing is only going to increase, Ms Fowler agreed, especially as the conversation turns from policy to politics. But, given the complexity of the problem, there is no easy answer.

“People are raising issues about the price of drugs when they are launched, but also the price of drugs when they increase. The price of drugs at the end of a life cycle, areas where there aren’t enough suppliers and not enough of an incentive to stay in that particular area. It’s a complex problem,” Ms Fowler said.

Complex problems do not do well in Congress, where they often look for simple answers, she said. “I suspect it’s going to be a very difficult year. We are anticipating that,” Ms Fowler added.

“We’re going to have to find a way to balance that new desire for therapies and new drugs with a desire to make sure that people can afford them,” said Dr Patel. “Part of that is on the coverage side, and then part of that is going to be on whatever Congress comes up with,” she added.

The way the proposed Medicare Part B demo is ultimately handled will affect the role Congress takes, said Dr Patel. “I think that there is going to be reason to believe that this executive action, or administrative action, will be a little bit more of the precedent setter, that either pushes Congress to do more, or potentially offers us a backlash, where Congress says, ‘You’ve overreached and overstepped, and now we need to step in and do something that’s a little bit more palatable,’” she said.