The House’s $1.9 trillion COVID-19 relief package will include a provision to lift the Medicaid drug rebate cap in 2023.

‍MACPAC has previously recommended Congress remove the Medicaid rebate cap, which goes into effect at 100% of the drug’s average manufacturer price (AMP). A MACPAC report from 2019, shows that removing the cap could save the Medicaid program between $15 and $20 billion over 10 years. However, the recommendation also warned that manufacturers may allocate less resources to drugs and research that would disproportionately benefit Medicaid beneficiaries. Similarly, a previous CBO score on Medicaid drug rebate caps estimated that they could reduce direct spending in the Medicaid program by $15.9 billion between 2021-2030. To read the full article, click here.

• To read the 2019 MACPAC report, click here.  

Senator Klobuchar introduced a piece of legislation that would increase competition and improve antitrust enforcement.

The Senator’s press release highlights five key components to her legislation: (1) increase enforcement resources; (2) strengthen prohibitions against anticompetitive mergers; (3) prevent harmful dominant firm conduct; (4) establish a division of the FTC to conduct market studies and merger retrospectives; and (5) implement additional reforms to enhance antitrust enforcement. While the bill does not specify the pharmaceutical industry, it is likely to be impacted if the bill is passed. Experts have noted that this bill could reduce the pharmaceutical industry’s ability to take advantage of generic manufacturers. To read the proposed bill, click here.

• To read the full press release, click here.

The Department of Justice officially switched the government’s position in California v. Texas, the Supreme Court case that could overturn key provisions of the ACA.

‍Among the effects of the ACA being overturned is even higher drug prices, particularly for seniors. Now that the DOJ has joined the House Democrats and 20 attorneys general, the support to overturn the ACA has shrunk to the GOP attorneys general and two Texans. To review the full DOJ letter, click here.

A federal appeals court has decided to rehear the skinny-labeling decision from October 2020.

‍The court decided to throw out the previous ruling and will rehear the argument later this month (February 23). Experts in the case are wary that the new hearing will look past the specific facts of the case and focus on skinny labels as a much broader policy issue. The previous argument from Teva Pharmaceuticals and the generic drug industry posed that the law suit, by GlaxoSmithKline, was an attempt to undermine the Congressional intent of the Hatch-Waxman Act. To read the court’s official order, click here.

• To read the full article on the decision, click here.

Researchers from Harvard University and UC Berkeley examined the impact that an increase in out-of-pocket costs for prescription drugs would have on Medicare beneficiaries.

‍They study found that with a 33.6% increase in out-of-pocket costs (which is equal to an 11.0 percentage point change in coinsurance or $10.40 increase per drug) caused a 22.6% drop in drug consumption, and eventually a 32.7% increase in monthly mortality. Not only does this apply to ‘low-value’ drugs, but patients who have the highest risk for heart attacks and strokes were also found to be withdrawing from filling their prescriptions when out-of-pocket costs increased. The researchers concluded that “cost-sharing schemes should be evaluated based on their overall impact on welfare” which differs from the price elasticity of demand. To read the full study, click here.

Matrix Global Advisors released a report that found the US can save $1.3 billion a year if the FDA were to approve as few as seven complex generics.

‍The report examines seven complex generics that already have applications pending with the FDA that Matric Global Advisors found reasonable to be approved by now, as they are already available in Canada and across Europe. To read the full report, click here.