Panel 2: Post Election: What’s Changed and What Endures?

Mark Samuels:
Good afternoon and welcome to our panel, What’s Changed and What Endures. Post the election of Donald Trump as the 47th President of the United States, as well as Republican House and Senate wins. Today on the day the Senate vote for Majority Leader, this panel will explore the evolving healthcare landscape in the wake of the election and its impact on the policy community.
As Claire mentioned, my name’s Mark Samuels and I am CEO of ADVI Health, and more importantly, an Alliance board member. And I’m happy to introduce our panel. Our experts from across the healthcare industry will provide insights into what the health policy community can expect from the new administration and from Congress.
What key issues will remain central? What shifts in policy priorities, policy positions are likely to shape the next phase of healthcare reform? No matter the point of view of our panel or our audience, I expect the discourse to remain vibrant. And all involved in policy and adjacent regulatory reform to remain very active.
We had the good fortune to expect significant policy reform from both presidential candidates this election cycle and this lame duck period will be no exception. I hope when we’re finished, those attending will gain perspective on both opportunities and challenges of the policy horizon from multiple points of view within the healthcare spectrum. As well as areas of change and consistency in the health policy environment for philanthropy, healthcare providers, industry when it all comes down to health policy.
Let me introduce the panel from left to right. Rachel Newsom is Senior Vice President for Federal and State Health Policy at the Commonwealth Fund, working closely with policymakers at the state and federal level. Miss Newsom is responsible for developing and implementing the fund’s national policy strategy for improving health performance. Ensuring the work of the fund and its grantees informs the policy process in both the legislative and executive branches of state and federal government.
Rachel has 15 years prior experience working in health policy across federal, state, and local levels, including as an LA for Senator Maria Cantwell. Rachel’s on the board of one of my favorite organizations, the Winston Health Policy Fellowship.
John O’Brien. As many know a good friend, John O’Brien, currently serves as president and CEO of the National Pharmaceutical Council, where he leads research on pharmaceutical value, access, and coverage. His role in encompasses overseeing NPC’s policy research partnerships and developing NPC’s strategic vision.
Dr. O’Brien’s career spans private, academic, and governmental sectors. He previously served as senior advisor to the US Secretary of Health and Human Services and is deputy assistant secretary for policy. He held senior policy roles in the life science and managed care sectors, including at Carefirst BlueCross BlueShield. Was a career official at CMS during the Obama Administration and served as a health policy fellow in the US Senate.
And lastly, Adam Colborn, Associate Vice President of Congressional Affairs at the Academy of Managed Care Pharmacy. He leads AMCP’s direct federal congressional lobbying efforts and manages its grassroots advocacy and state policy work. Since joining AMCP in March, Adam led the successful effort to pass the preapproval information exchange, AMCP’s longstanding top federal priority, and launched AMCP’s Facts and Figures Report, Access, Affordability, and outcome, the Value of Managed Care Pharmacy before that.
Adam worked in the public policy division of the Alzheimer’s Association, advocating on behalf of people living with Alzheimer’s disease and dementia. Adam began his policy career working on a municipal transportation policy in his home state of Illinois.
And with that, let me join the panel and start asking questions. So good. John, you’re at the end. I’ll start with you. There’s an assumption that after every election there are shifts and changes in the policy landscape. But a lot of that landscape will stay the same, probably more than the average voter realizes.
With your organization’s priority areas, where do you think, what do you think will stay the same? What do you think will differ? And are there areas of health policy you’re monitoring or anticipating significant change?
John O’Brien:
That’s a great question and before I answer it, I have to thank the Alliance for allowing me to be a part of this great panel. It’s a little-known fact that 24 years ago when I was a pharmacy resident, I used to play basketball with Ed Howard. And it was through Ed that I got to learn the important work of the Alliance and met Mike O’Grady, my first ASPE, and Fish Brown from KP, a whole bunch of others that really helped me become the policy professional I am today. So I’m very grateful to the Alliance for their support.
But look, in addition to the jobs that you described in the intro, I’m also a pharmacist and I spend a lot of time being a caregiver. And it’s all of those roles that led me to NPC where I get to work with a great team of researchers who are really trying to answer some important health policy questions.
So the one thing that I hope will change is that we have a healthcare system that views prescription medicines as an arbitrage opportunity, something to extract money from. As opposed to a really important type of innovation that’s used to treat patients and help them get well, stay healthy, and ultimately avoid higher healthcare cost settings.
The one thing that I think is already changing is the recognition that our system that relies on pharmacy benefit managers, isn’t working for patients. About half of what we call drug spending in the United States is actually going to someone other than the company that researchers develops and ultimately helps the patient get access to the medicine. And I really wish that that actually helped patients where it mattered most, which is in their out-of-pocket costs at the pharmacy counter.
And I think the one thing that’ll never change in Washington is that personnel is policy. And here we are after another election on another panel like this, thinking about who’s going to get the big jobs and what that’s going to mean for our jobs. But if you’ve been in this town long enough, you understand that change happens and the ability to do good research to help inform good policy is what we are here to do.
Mark Samuels:
Great. Adam, why don’t you follow up? You might have something to say about John’s pharmacy comments and other things.
Adam Colborn:
Well, so I think to answer what stays the same, probably almost everything. I think when it’s easy to think about the big landmark changes that happen, those sort of happen all at once or in a relatively condensed timeframe. But for the most part, it takes a long time to pass any piece of legislation. Healthcare is no different.
We are looking at possibly the smallest house majority that any Congress will ever start with in the history of the United States at this number of representatives. It’s looking like it’ll either be a majority of 222 or 221. 22 would tie the record, 21 would set it.
And we are already dealing with a very narrow majority and we’re not seeing a lot of legislation pass even where there’s bipartisan agreement. There’s been a lot of bipartisan interests on PBM reform, but I think when you look at what is the exact right solution, it’s much harder to come to some sort of governing consensus around that.
I think we have seen members of Congress say that they are interested. Congressman Brett Guthrie, who is today possibly being elected as the Chair of the Energy and Commerce committee, has expressed a desire to focus on PBMs again in 2025, even if something happens in lame duck. So I think there’s a possibility that we see a renewed effort there.
I don’t know how significant those changes will be. There’s sometimes what’s called the Nothing Ever Happens camp of politics, and I fall a little bit into that. Things happen but slower than everyone wants. And so I think that’s a question mark for me on how much will happen.
But yeah, I definitely think change is in the air. I don’t know if 2025 is the best opportunity for it in the healthcare space. We’ve had Republicans say that tax reform is their top priority, and so that could eat up a lot of next year and leave relatively little breathing room for healthcare.
Mark Samuels:
Rachel, do you agree that the more things change, the more they stay the same?
Rachel Newsom:
I think so.
Mark Samuels:
And so therefore not much will happen? Or?
Rachel Newsom:
Well, I don’t know. So first of all, let me just add my thanks to the Alliance. Thanks for having us. Thanks for doing this. I think we’ve all had some time to absorb a little bit what the last week has unfolded.
But the Commonwealth Fund has been around for 105 years. We’ve been through 24 elections as an organization. And all through that, our mandate has been creating the evidence, creating the research, creating the analysis that could then drive and inform policy. So there’s been lots of conversations around what is the value of evidence? What is the value of information?
And I have to believe, I think all of us have to believe in order to do our jobs, that there’s still an appetite for that. That there’s still a need for it. How we talk about it, what we do with it could differ and our tactics could and should differ.
But I think this balance of when you look at DC and you look at the healthcare policy community in general, you see two things. You see a lot of passion and a lot of issues that people are really passionate about. And you see a lot of entrenched interest and a lot of money.
And so you put those two things together and of course you’re going to have struggles moving things over the finish line, but to me that’s an indication that people feel very strongly about these issues. No one gets into this for the glamour, the fame, and the money, I don’t think. It’s about things that our people are really passionate about.
And so as a foundation, we’re sitting in a very privileged position. We have an endowment, we don’t have members, we don’t have to raise money. And so we’re really asking that same question that we’ve been asking for the past 105 years, what areas need potential solutions or some accelerant? Where sometimes the governments get stuck or there’s other work that needs to be done to help inform those efforts. And I don’t see that going anywhere.
Mark Samuels:
Do you feel like if there was a genie in the back of the room and you had the opportunity to change maybe one thing, is it cost of healthcare? Is it value? Is it quality? Does quality drive? So the same, I was at a panel this morning and the speaker asked the same question of all of us. So I’m going to ask the question here.
Rachel Newsom:
So we kind of look at access, affordability, equity. I mean, I think costs are a big driver and it’s a lot of the reasons that you can’t go more expansive on coverage, so for sure. One of the things that I’m going to be really focused on is thinking about, and I think us as an organization, making sure we fully understand the impacts of policy change on which populations are going to be impacted, right?
We say we want to expand affordability. Affordability for who? And is it going to be at the expense of someone else? So again, all we can do is really generate that information, ask those questions. And so yes, absolutely cost is critical. And from my perspective, it’s controlling those costs so you can make sure that you’re getting more people access to care.
Mark Samuels:
All right. Adam, same question.
Adam Colborn:
Yeah, I think the cost question is, at least at the political level, the end-all, be-all. And I think when we talk about access and affordability, they’re not separate issues. Affordability is access. I think when we talk about cost, it’s easy to overlook some of the nuance of those conversations. Like 90% of prescriptions are generic and that drives, I don’t know, 15% of spending.
So when we talk about affordability, I think sometimes the mainstream conversation can miss the mark, at least what keeps my members up at night. Which are the high-cost therapies, orphan drugs that have extremely high price tags but are potentially curative. That’s a really difficult conundrum to solve, especially if you’re a Medicaid program and you may not be well positioned to absorb the cost of a therapy that doesn’t work if it has highly individualized outcomes.
There’s some legislation out there that would try to fix that. The Medicaid BBPs for Patients Act, Congressman Guthrie and Congresswoman Eshoo is one that we like a lot. But I think as we look towards the future, I think it’s new treatments that are going to drive a lot of the conversation around cost on the prescription drug side.
It’s cell and gene therapies. The CRISPR therapies for sickle cell that are going to get an increasing large percent of the conversation, which is right, because this is new and we sort of don’t know what to do about it yet.
I will say on the one asterisk on all the remarks, is that hospital spending is still a much larger portion of healthcare spending. And so it’s very easy to focus on the prescription drug side, but it’s part of a larger conversation that I think we’re all looking for the answers.
Mark Samuels:
John, I would think your members have had some discussion on this topic.
John O’Brien:
Yeah. And I think given where we are right now, it’s important to stir choice and competition into the affordability, access, and equity conversation as well. Because look, the most recent high-cost drug that became curative for hepatitis C was the subject of congressional hearings about why this price tag?
And within a year, year and a half of the launch of that product, we had one competitor, then another competitor. We saw a 40% decrease. Then now I think for one seventh of the published list price, we’re essentially treating hepatitis or curing hepatitis C. And, in spite of the low cost to private plans and Medicaid agencies, there are still people that need this medicine and should be using it and aren’t able to get it.
So I think it’s important to remember that the cost that we see today as a result of competition and choice in the marketplace, ultimately bring costs down. We sometimes forget when we’re doing a value assessment that it’s not the launch price that should endure in the health technology assessment, but that it’s a dynamically priced environment. And these prices ultimately go down and society gets to benefit from that innovation at a much lower cost.
Mark Samuels:
So, Adam, you’re welcoming a new Illinois lawmaker that is coming to Washington like you did years ago. And they’re asking, “What healthcare areas would you want to prioritize getting up to speed on first?” And are there any issues that you see as more relevant to their time, first time on the hill? What’s your answer out of the box?
Adam Colborn:
Well, if they’re coming in at the beginning of 2025, we’ve already talked about PBM reform, that seems like it’ll continue to be an issue. The other two issues that I would say probably are 340B and drug patents, which are both very weedy topics.
Everything in healthcare is super complicated. It’s almost impossible to avoid getting into the weeds on anything. But I think those are both issues that have been increasingly mainstream. They seem like fairly niche issues that over the last couple of years have grown pretty substantially in at least how much attention they’re getting from policymakers, if not necessarily news media.
I think there’s a lot of dueling opinions on 340B, for example. There’s some folks who want to keep it as is, they feel it’s working correctly. There are other folks who think that it is not fulfilling its original design. And it’s an extremely complicated issue once you get down to child sites and contract pharmacies and working with HRSA and lawsuits. J&J introducing their new rebate thing and then getting sued by HRSA and then counter suing. It just goes on and on.
So I would say 340B is one to keep an eye on. And then patent reform, I think is another one I’ve heard from a couple of offices on the hill. That after Congress is satisfied with what they’ve done on PBMs, or gives up depending on how things go, patent reform is the next sort of piece of low-hanging fruit.
And I think that if we look at July, there was the, I don’t know, Access to Affordable Prescriptions Act, Access to Prescriptions for Patients Act, I think is the name of it. That passed the Senate unanimously that would limit the number of patents that… It’s sort of an interesting bill. It wouldn’t limit the number of patents you can have on a single drug, but it would limit the number that you can assert in a enforcement challenge, which is I think an interesting approach.
But that passed the Senate unanimously in July and it hasn’t moved at all in the House. But I don’t think that that bill’s sponsors are just going to give up then throw in the towel and move on. I think that has some legs once there is breathing room for healthcare.
Mark Samuels:
If you’re advising this said staffer on 340B, is the issue and the understanding from sort of the top down, is it matter who’s in the seat at HRSA? Or is it really a matter from the bottom up? Getting the hospitals and others to a room and not letting them out until there’s something?
Adam Colborn:
I don’t know, maybe the middle, maybe it’s like middle out. I think the stakeholders who are impacted by 340B feel very strongly about it, and they’re all fairly persuasive voices. I don’t know that HRSA will be particularly interested in making big changes.
I think it’s going to happen in Congress. This is going to be something that some members of Congress feel they need to do something about. I mean, even within Congress, there’s competing opinion on, and everyone frames it as supporting 340B. No one is saying that they want to attack 340B at all.
But you’ve got sort of the reformers who want to do things like create a definition of a patient which doesn’t exist currently. They want to pass savings along to the patient. It was originally a program designed to protect hospital finances, not patient finances. And so that’s coming under increased scrutiny by critics.
But I think there are a lot of hospitals who say, “Whoa, if you start passing all of our savings on that, our finances are going under.” And especially if you’re a rural hospital, then they’re worried about being able to stay open. And often in a rural community, hospitals are sort of your only healthcare option.
I don’t know that there is… I don’t have a good prediction for which direction 340B will go in the future. But yeah, if I was advising a new staffer, I would say, “Find a different job.” But if they rejected that advice, I would tell them that, “This is going to be very emotional subject. So whatever you decide on, just be prepared that the people who disagree with you are going to do so very strongly.”
Mark Samuels:
Great. John, same question.
John O’Brien:
About 340B?
Mark Samuels:
No, if you were advising a new-
John O’Brien:
Because, boy, do I have some ideas on that one.
Mark Samuels:
I know. That’s your second topic.
John O’Brien:
No, look, it feels like just yesterday that I was racing to get to the back of a conference room on the hill to A, get a box lunch, and B, get some education at an Alliance event. And I used to carry around a cheat sheet that I made after an event that described the different sources of coverage. Like what is Medicare? What is Medicaid? Now what is the individual market? What is employer sponsored insurance?
And how do all those different programs work? And what percent are they of healthcare spending? What percent of that or prescription drug spending? So what I would advise a new staffer is to really understand that our system is not just one system, it’s multiple systems. And you have to understand the incentives in those systems because those incentives really drive purchasing and behavior. And I think there’s nowhere more true than for prescription drugs.
And I think we all want people to have lower costs at the pharmacy counter. I think if you look at the Inflation Reduction Act, you can say, “Wow, that $2,000 out-of-pocket cap is a godsend for people who never…” 15 years ago, we never really thought we’d have people who’d be paying 5% of their gross drug costs forever.
But when I look at the drug price negotiation program, I look at that and say, “That kind of feels like a poorly designed policy to me.” Because the research that we are doing and the research that’s starting to come out says, “Look, there’s unintended consequences for drug development.” There’s going to be uncertain impact on patients. Many of these drugs were already available today for a copay. And now because of the way that the incentives are changing, we’re not sure if that’s going to remain true or not. Or if there’ll be new utilization management kicked into that program.
And then on top of that, we have the October 2nd letter from the Congressional Budget Office that said, “Hey, what do you know? This program’s probably going to cost a lot more in 2025 than we originally anticipated.” So when I look at the unintended consequences, the uncertain impact on patients, the impact on drug development, and now really not as much savings and potentially more costs, I kind of wonder if it’s worth it.
And then if you understand how all of those incentives work, you begin to understand that the IRA is just sort of the latest cut into an industry that uses that’s revenue to do research and development to generate new innovation. And when you start to layer the IRA on top of 340B and the growth of the Medicaid Drug Rebate program. And whether or not stacking was going to happen or not, and the 50 plus percent growths to net we see in a commercial market, I start to wonder how many more cuts can we make into this industry before we hit an artery?
So again, to be able to get into those weeds, you really have to begin with understanding how all of the different sources of coverage work.
Mark Samuels:
Rachel, let me ask. John made a comment, which is a great unsolicited commercial for the Alliance, and I would agree as a board member and a participant. But let me ask you then two questions. Where would you look for advice and information as advising a new staff person? And then what issue would you think are a priority for them to understand?
Rachel Newsom:
Yeah, thank you. Obviously straight to the Alliance, straight to the Commonwealth Fund. Easy first steps. No, I think that’s really important. I think coming in, and you mentioned the Winston Fellowship, that’s one of the first things we talked to fellows about, is really being able to understand where is the person you’re sitting across from coming from? Not just geographically, but what is keeping them up at night?
What are their issues? Who are their members? Who’s their constituency? So even to answer your question about how I advise a staffer, I would say, “What is your member passionate about? What gets them riled up?” I worked for a couple of different members on the hill, and one was really strong on Medicaid and moms and kids and more of the touchy-feely stuff. And the next one was a business woman, who that is not the language that she spoke.
And we did the same issues in both offices, but we had to frame them differently and talk about them differently. So I think it’s a good reminder, I think, for people who are new. That you can stick true to your values and your issues and your mission and have some flexibility built in about how you talk about it and how you kind of move forward on that.
So I totally agree with John. Learning the basics, making sure you’ve got some go-to resources that are objective. That you understand who’s funding that. But I would also spend a little bit of time on process. If you aren’t familiar with the reconciliation process, today’s the day to start learning how to exercise.
Mark Samuels:
Day one.
Rachel Newsom:
You might get two chances to do it next year, who knows? But there are arcane processes that will be playing out. It may be fast, it may be slow. It’ll be fast and slow at the same time probably. But I think that is a really important piece.
People have asked what will be different about 2025 versus 2017 going into this? And I think one of the big differences is that I don’t think this administration’s coming in feeling like they’ve got a mandate to do something large on healthcare. We’ve not heard about the repeal and replace, and that’s depending on how you feel about those policies, that’s both a blessing and a curse, right?
Because I think what is going to happen instead is a lot of different small policy changes and issues that a lot of people are going to be having to keep track of. So get focused and get strategic. And get really clear what it is that you care about or your boss cares about or your constituents care about, and then use that as your filter, right?
Because there’s going to be a lot going on. There’s going to be a lot of chatter, a lot of noise. And sometimes the hardest thing to figure out is what not to do and what not to pay attention to. And that takes time. But getting familiar with that and the processes I think are important.
Mark Samuels:
Let me start with you on another question. And this one comes, so we solicited input in doing these questions for the panel. It just happens that these questions are great given everybody’s experience.
So you’ve been in DC a while, you talked about the different members you worked for. What has changed in your opinion in the policy environment since when you started working to today? If anything, I suppose? And then what are your predictions? Granted not January 20th yet, but in terms of what you see in the future.
Rachel Newsom:
I mean, I think we’ve all heard, “Oh, back in my day, people, we all gathered around the campfire together and played guitar. Democrats, Republicans, and it was such a better time.” I mean, I do think there’s an element of, we all know. We can see how the population and just the constituency has shifted.
And so when I came here, we had a lot of folks in the middle in both parties, that were moderate and they really wanted, it was that group that was really coming together to talk about solutions. We know this is not the time for those rational conversations and it’s going to sort itself out.
This whole past year was not about rational policy conversations when you’re going into an election. So some of those cycles I think will always repeat themselves. As you get closer to an election, you’re kind of out of the ability to really have thoughtful conversation.
But I do think one of the things, and again, I’ll go back to the need for evidence and information that is trustworthy. And what we’re thinking about is at the fund, is identifying a set of things where we can have a proactive strategy and proactive issues to engage that are both short-term and long-term.
We worked on a big coverage expansion initiative under the Bush Administration. We knew there was not a political appetite or will to do that then. And then the window opened and it was ready to go. So waiting for those windows to open and then doing the work, it takes foundations a while to mobilize. That’s not really a good strategy.
So we need a blend of short-term, long-term, both proactive, and also the ability to be strategic and responsive. That’s always been the case. I think it’ll be really important now. Same and different, so there you go.
Mark Samuels:
You left Alzheimer’s, we just talked about that.
Adam Colborn:
Yeah.
Mark Samuels:
Right before coverage expansion and proliferation of the Alzheimer’s drugs that are out there now. But sort of the same question to you, other than that, what’s changed from your time to today?
Adam Colborn:
Well, so I moved to DC 10 years ago when the ACA’s major provisions went into effect in 2014. And I actually don’t think things have changed that much. And maybe they’ve changed rhetorically, but I don’t know that they’ve changed substantively.
The ACA, the IRA was an extremely partisan fight. The ACA was an extremely partisan fight. The MMA in 2003 was an extremely partisan fight passed by one vote in the house.
Mark Samuels:
Yeah, ASP.
Adam Colborn:
Yeah. In ’93, Hillary Clinton’s Universal Health Card plan totally failed. And so I don’t know that it’s really changed in this area that much. People have extremely strong opinions on healthcare in ways that they don’t on other issues. And I think that will always make every sort of landmark piece of legislation a very difficult hill to climb.
I mean, I agree that we’ll see small areas, sort of niche issues where there can be bipartisan agreement. We talked about PBM reform already, that appears to have some amount of bipartisan agreement. Patent reform. There’s lots of sort of niche areas where things could get done, but that was true 20 years ago as it is today.
So I don’t know that things have changed tremendously in the political side, but what I will say has changed is the treatment, that that is tremendously new. CRISPR was like science fiction 20-some years ago. No one was like, it was not something that I think a lot of people were thinking about going to their hospital and getting treatment about. And now it’s something that treats sickle cell. So I think that’s the biggest change is on the innovation front.
Mark Samuels:
John?
John O’Brien:
Well, plus one for bipartisanship, which I haven’t seen a good bipartisan seersucker gathering in a while. But I-
Rachel Newsom:
It’s been a while. It’s been a while. We’re due, I think.
John O’Brien:
I do. I do think that it exists at the staff level. I was just at a Halloween party and there was a former Republican staffer that said, “How’s Ashley?” Because my partner Ashley worked for a Democrat during the ACA, and like her boss and her boss, they were besties and they did stuff together. And even a decade later, that relationship still exists.
And we see that with Conor Sheehey and Polly Webster and other bipartisan dynamic duos on the hill. And that’s really important to the policy process. Though I do laugh about the statistics on how long has it been since there’s been regular order? Or do these staffers even know what that means?
But the one thing that I think hasn’t changed, and it’s important that it doesn’t, is that good policy begins with good evidence. And look, that’s why I’m happy to be at a research organization. We don’t lobby. I’ll know people in the next administration. I knew people in the past administration. And I hope they continue to find our research valuable.
The one answer that I didn’t give to your last question was that I would certainly tell that policymaker or staffer that if they went to NPCNow.org and signed up for our newsletter or followed us on LinkedIn, they’d be able to get a lot of this good research. About everything from our latest research on the IRA or PBMs or how we need as much innovation and coverage and reimbursement as we do innovation in the labs.
Because we can’t pay for gene therapies with the same system that we use to try to cover blood pressure and cholesterol drugs. So the science is moving faster, the policy isn’t necessarily keeping up with it, and we need really good research to inform that policy.
Mark Samuels:
Do you feel, and all of you would be good to answer this question, just given where you’re at now. Are there any states or public-private partnerships, you talked about partnership, that are creatively addressing some of these policy issues we’re talking about that federal policymakers should be following or potentially emulating?
John O’Brien:
It’s funny that you asked that question.
Mark Samuels:
Other than getting access to your website.
John O’Brien:
No. Look, it’s funny that you asked that question today because like many of you, I was up late reviewing my comments on the notice of benefits and payment parameters proposed rule. And look, I’m encouraged that there are 20 or some states that have policy on the book that requires that cost-sharing applied towards the patient’s deductible or to their out-of-pocket spending.
And I really applaud people like Carl Schmid and other strong patient voices out there that are calling on CMS to replicate what some of these states are doing, right? We need the tri-agency rulemaking to come out and say when we’re talking about the self-funded or the large group plans. That they need to be really clear that these co-payment adjustment programs are causing patients to have higher out-of-pocket costs.
It’s reducing their access to medicine, it’s decreasing their adherence, and there’s a lot of equity issues associated with that as well. So again, I do believe, as Justice Brandeis said, that states are laboratories of democracy and kudos to the states that are working on out-of-pocket access for patients.
Mark Samuels:
Great. Rachel, I don’t know if you want to answer. So you certainly have grantees and partnerships.
Rachel Newsom:
We do. And I would just agree it depends on the topic that you’re talking about, but we haven’t talked a lot about behavioral health. I mean, behavioral health is an area where it’s a perfect storm. You see the data and the trends going the wrong direction. There’s political pressure at the state level as well as at the federal level. And it really is an issue that kind of cuts across and through all parties.
Everybody knows someone that’s impacted. And there’s a tremendous amount of opportunity to really leverage to either build on bipartisan pieces that have been moving and have somewhat stalled. But also just to think about how we take something that’s passed as a policy and really help states implement it and learn from each other. So I’m really encouraged things like that. Things like the 12-month postpartum extension. I mean even in states that haven’t expanded Medicaid, you can see across the country the difference that that policy has made.
So it’s very easy to say, “Oh, X, Y and Z is going to happen, and blue states and red states this.” The reality is when you get under the hood and you look at what states and these state officials are doing, there’s still a tremendous amount of commitment to these issues. And so I do think and hope that we’ll be able to really explore that. Help support states maintain some of the innovations that they’ve put into place, but also make sure those lessons are brought forward to the federal government because there’s a lot that we can take and share.
Adam Colborn:
So I guess I’ll open with a little caveat that creative and effective are not necessarily synonyms, but there are things that I think states are doing that are, everyone should be paying attention to. One of the big ones that we’re watching at AMCP are the white label generics that some state programs or states have authorized.
So CalRx in California is the big one. They’ve partnered with Civica Rx to do a couple of insulin biosimilars. And there was another issue that they were on that I forget what the other product was, but they’re sort of the furthest along on that. Texas, Maine, and Washington State I think have all introduced similar or passed similar laws that would sort of create these Medicaid and other state programs, state-run programs, white label generics.
So I think that is something that a lot of other states will be monitoring. I think Michigan had toyed with the proposal. I don’t remember what became of it. But that’s a big one. And then the other one that we’re watching very closely is the prescription drug affordability boards.
Especially in those states that are authorized to set upper payment limits. So Colorado is, they’re the first one to test the water on that. They declared Enbrel unaffordable under their PDAB authority. And I don’t remember, there was supposed to be an update in September. I’m not sure what came of that. But obviously this is the subject of a lawsuit.
And I think not only does that lawsuit have big implications for what the states can do through a PDAB, but does that impact the Inflation Reduction Act? If the state can’t set a UPL, can Congress or can CMS set an MFP? And so I think it has potentially wide-reaching implications if it goes to the Supreme Court.
But those are sort of new ideas for us in America. So I’ll withhold judgment until we see how they turn out. But yeah, those are certainly things that I don’t know if Congress should replicate them necessarily. The white label thing seems like it belongs at the state level to me, but in a 50-state scope, at least something to watch and consider.
Mark Samuels:
Are you watching this?
John O’Brien:
I mean, look, it does seem peculiar to me that a state where the governor vetoed a PBM reform bill is trying to invest in an insulin manufacturing or labeling exercise, when insulin is essentially the poster child for the size of the rebate is so much larger than the cost of goods sold.
And I look at the PDAB issue. I think on one hand, I view state prescription drug affordability boards and their upper payment limits as intended to be the delivery vector for the MFPs and the Inflation Reduction Act. Because they weren’t able to get the parliamentarian to say that the commercial insurance could be included.
I’m concerned as a pharmacist though, that the agreement between a manufacturer and a wholesaler is probably signed outside of the state. And the pharmacy who’s subject to the upper payment limit is subject to that in the state. And what’s going to happen if state law says a health plan can’t pay more for this medicine which the pharmacy is acquiring at a different price? Is that going to lead to access issues for patients?
So I think our health affairs piece on PDAB’s explored those and a few other issues. But again, I commend the states for wanting to take action where they feel the federal government hasn’t. But I kind of go back to Bardach’s eightfold path. And it’s like, “Define the problem. What problem are we trying to solve?”
If we’re concerned about the out-of-pocket cost of insulin, where we know pharmacy benefit managers are really behind those discounts not reaching patients, why are we going to build an insulin manufacturing or labeling enterprise in their state?
Mark Samuels:
Yeah, it doesn’t quite get to the partnership part. The Alliance often orients its work around finding areas of bipartisan collaboration. And we have roughly six minutes left. We want to get a couple audience questions.
But just maybe in a couple sentences, you mentioned mental health. I don’t know if you think that’s an area that there might be bipartisan collaboration. And maybe past that, collaboration in the ecosystem with patient groups and physicians and others. Or are there others that Commonwealth is looking at?
Rachel Newsom:
I mean, I think that’s a promising area. We’ve certainly seen both sides in Congress be really committed to this issue, and I think it remains to be seen kind of how that ranks. I think we’ve talked about the tax bill being the primary area of focus.
So I think that behavioral health, mental health, addiction is an area that I think we could be pretty zoomed in on. We do a lot of work around primary care, the importance of primary care. When you look at our international comparisons and you see our spending here, you see other countries spending down, one of the big differentiators is our primary care system or lack thereof.
And so figuring out ways. Listen, everybody wants access for their constituents in their districts. How we get that and how we pay for it, there’s when we start to have the robust, exciting conversations. But everybody wants to know that those services are available.
And so thinking about how we can really prop up that infrastructure. Think about are there ways to bring pharmacists into that model, especially in rural areas. Again, I think those are places where you can come at it from a cost containment or a fraud, waste, and abuse perspective and still move your same issues forward.
Adam Colborn:
Yeah, I agree totally. I think the bipartisan issue can be a challenging one, but I think value-based care is sort of the future. And it’s been the future for 20-some years, but we’re closer to the future now.
Mark Samuels:
Yeah, well, big V little V.
Adam Colborn:
So I think we agree that we want care to be valuable or the price you pay to reflect the value you receive in some way. And I think that’s something that requires not just bipartisan agreement, but as you said, the entire ecosystem. So it requires payers, manufacturers, patient advocacy groups, researchers of all stripes.
John O’Brien:
Plus one for health professionals and pharmacists practicing at the top of their license to achieve value-based care. And when I think about value, I am thinking about the National Alliance of Healthcare Purchasers recent employer survey on prescription benefits. Where they found that employers who are pursuing more of a value-informed formulary are spending about three times less than those are looking for a formulary that delivers them a big rebate guarantee at the end of the year.
And I think that might may be why their work says that there’s a lot of employers who are thinking about a different PBM next year. So I’m looking at PBM reform as an issue that’s kind of not just become bipartisan, but has started to become really important to employers as well. And I think they’re asking a lot of questions.
We did some research looking at the role of employer benefits consultants. And how much more likely someone is in choosing a rebate guarantee driven arrangement if the employer benefits consultant is the loudest voice in the room. I didn’t expect Mark Cuban to tweet our AJMC paper, but it was nice to see.
And yet at the same time, I think employers are asking more questions about how do we pay for all kinds of healthcare? And again, I think prescription medicines is one area where it’s easy for them to drill in on.
Mark Samuels:
Great. We have maybe two minutes, minute and a half. Are there audience questions for any of the panelists? If so, just stand up or come out. If not, I’m going to ask him another question. Go ahead.
Speaker 5:
[inaudible 00:48:50]. So you talked about PBM reforms maybe in ’24, probably back in 2025. That’s a big area, right? A lot of provisions. So what provisions do you think are most likely to become law if this moves?
John O’Brien:
Well, I’ll just say that I don’t know what’s likely. I know what I wish for, and what I wish for is that we recognize that many will say that PBMs play an important role in negotiating with manufacturers. And unfortunately, the fruits of those negotiations though aren’t reaching the patient.
So is there a way to de-link the way that pharmacy benefit managers are paid from the price of the drug? Because there’s pretty clear evidence that shows, at the very least, a correlation between the growth in formulary exclusions, the growth in list price, and the growth in what patients pay out of pocket. So if we can change the way that that model works so that patients benefit more at the pharmacy counter, that would be my wish.
Adam Colborn:
So yeah, I’ll start by saying that PBMs play an important role in negotiating prices with manufacturers.
John O’Brien:
I knew someone would say it.
Adam Colborn:
But to answer the question more specifically, what I think is most likely to pass is transparency. But the sticking point there is transparency to whom? Is it transparency to the patient, to the consumer? Or is it transparency to the employer who is actually the person or the entity purchasing the health coverage?
So there are some unresolved questions there. I think in practice, whatever does pass will be a little column A, little column B. But I think transparency is where people feel like they can move most easily.
Mark Samuels:
Great. Thank you so much. No, you want to answer it?
Rachel Newsom:
I think PBMs has had its day in the sun.
Mark Samuels:
All right.
Rachel Newsom:
I don’t think, I don’t have anything to add to PBMs. So I’m good.
Mark Samuels:
All right. I think we’re good. We have time for one more question. All right. Anybody else? No? There we go. Sure.
Monica:
Can I speak up? All right. Thank you. Hi, I’m Monica. I am a representative of the Ministry of Health in the Netherlands. We’re a pretty small country, but we have been looking into your healthcare system with intense interest.
Rachel Newsom:
Sorry.
Monica:
Yeah. No, no, no, no. Don’t be. Don’t be. Because we have an all in order as well. Because we had recent elections, we now saw that actually our perception of what the public considered to be healthcare and health has been changing.
And health policy therefore does not reflect what they find interesting or how they want to see what comes or derives from healthcare or health. Do you see that change as well? Can you reflect a little bit on what you think about the change of this perception?
Rachel Newsom:
Thank you, Monica. I’m happy to take this non-PBM question. So I think that’s a really important point. And one of the other things you see when you look at international comparisons, everyone knows the US spends more on healthcare. When you fold in other social related programs, housing, leave, child care, which a lot of other countries do when they’re kind of looking at this kind of social well-being and the supportive policies, we are down towards the bottom, right?
So that is one area where I think when you ask someone here what you think about the healthcare system, they’re thinking about what’s happening in their doctor’s office or their ability to get into that office or their ability to pay for something at the pharmacy counter. And I think other countries do have a broader aperture and way of thinking about that. And so I think that that is definitely an area that separates us from our peers. But yeah, thank you for the question.
Mark Samuels:
Great. Thank you so much. Appreciate it. Great panel.