This Week in Managed Care: July 13, 2018

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This week, the top managed care stories included additional moves by the Trump administration to unravel the Affordable Care Act; Pfizer canceled a round of drug price increases after speaking to the president; advocates for 340B sound the alarm on efforts to reform the program.


The Trump administration continues to unravel the Affordable Care Act, Pfizer cancels a round of drug prices, and advocates for the 340B program sound the alarm.

Welcome to This Week in Managed Care, I’m Laura Joszt.

Chipping Away at the ACA

CMS this week withdrew funding for 2 more pieces of the Affordable Care Act, including 1 that health insurers say could disrupt the market.

Citing a recent federal court decision, CMS halted collections and payments under the risk adjustment program, which helps balance out losses among insurers who take on high-risk patients. The move canceled payments for 2017, which will halt transfers totaling $10.4 billion.

CMS Administrator Seema Verma said the administration had no choice. “We were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold. CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.”

An industry group, America’s Health Insurance Plans, said the move would increase uncertainty in the market and may reduce coverage options. And the Blue Cross Blue Shield Association called on the administration to reinstate the 2017 payment transfers.

CMS followed up the news with a decision to cut funding for groups that help consumers select appropriate coverage under the ACA. Saying the navigator program must “evolve,” CMS Administrator Seema Verma said that only $10 million will be available for grants to nonprofits that employ navigators.

That’s down from $36 million for the 2018 plan year, and $63 million from the 2017 plan year, when enrollment began during President Obama’s final months in office. CMS said last year, navigators did not enroll as many consumers as private agents and brokers.

But Congressman Frank Pallone, D-New Jersey, ranking member of the House Energy and Commerce Committee, said, “The Trump administration is once again attempting to sabotage the ACA at any cost, regardless of its impact on the American people.”

Reversing Course of Price Increases

The drug manufacturer Pfizer has put a round of price increases on hold after President Donald Trump criticized the price hikes and then spoke with Pfizer CEO Ian Read.

The company said it would pause the price increases to give time for Trump and HHS Secretary Alex Azar to move ahead on their plan to reduce drug prices, which was announced in May. However, the price hikes will take effect at the end of the year if no plan emerges.

President Trump had threatened action against Pfizer in a Tweet on Monday, which prompted the phone call with the drug maker.

340B Reform

An advocacy group reports that legislation to reform the 340B program would cause more than half of the nation’s disproportionate share hospitals to lose eligibility for the discount drug program. The group 340B Health said that every eligible hospital in five states—Idaho, North Dakota, South Dakota, Utah, and Vermont—would lose access to the program. 340B requires drug manufacturers to sell products at a discount to qualifying hospitals and clinics that serve high numbers of Medicaid and low-income Medicare patients.

But critics of 340B, including the Community Oncology Association, say the program has been abused when these hospitals buy up clinics and apply the discount program to patients outside Medicaid.

Read the full article.

Diabetes Value-Based Contract

Value-based contracts are becoming more common for newer diabetes drugs, including empagliflozin, the SGLT2 inhibitor sold as Jardiance. This week, Highmark Health announced a value-based contract with Boehringer Ingelheim that covers empagliflozin and related combination therapies.

Previously, Boehringer Ingelheim announced a contract with Prime Therapeutics, which manages pharmacy benefits for several members of the Blue Cross Blue Shield Association. A spokeswoman for the drug maker said the new contract will evaluate the combined pharmacy and medical costs for patients in commercial plans who take empagliflozin.

Emerging Managed Care Researchers

Finally, there’s still time to nominate a young investigator for the Seema S. Sonnad Emerging Leader in Managed Care Research Award.

Learn more and nominate someone.

For all of us at the Managed Markets News Network, I’m Laura Joszt. Thanks for joining us.