Modernizing Medicare Part D

12:00 p.m. – 12:10 p.m.        Welcome and Introductions

• Sarah J. Dash, MPH

President and Chief Executive Officer, Alliance for Health Policy, @allhealthpolicy

• Mark Miller, Ph.D.

Executive Vice President of Health Care, Arnold Ventures, @Arnold_Ventures

12:10 p.m. – 12:45 p.m.        Panelist Opening Remarks

• Leigh Purvis, MPA

Director, Health Services Research, AARP Public Policy Institute, @leighdrugwonk

• Tara O’Neill Hayes, MSPPM

Deputy Director of Health Care Policy, American Action Forum, @TKO_Hayes

• Tricia Neuman, Sc.D.

Senior Vice President and Director, Program on Medicare Policy,
Kaiser Family Foundation, @tricia_neuman

• Chris Sloan

Associate Principal, Avalere Health, @chrisavalere

12:45 p.m. – 1:30 p.m.          Question and Answer Session

(This is an unedited transcript. For accurate quotes and presentations, please refer to the full-event video.) SARAH DASH:  We’re going to go ahead and get started.  The Alliance is a non-partisan organization, as many of you know.  We’re dedicated to advancing knowledge and understanding of health policy and our mission is to foster informed policy through non-partisan education.  Over the last year the Alliance has hosted close to a dozen panels about issues related to prescription drug prices and through each event, in case it wasn’t clear before, it is becoming increasingly clear that the prescription drug market and prescription drug coverage are convoluted and the mechanisms of the institutions involved are often opaque.   And at the center of this system remain many patients who struggle to afford the medications that they need.   There are a number of congressional proposals related to this topic.  Today we’re going to focus particularly on the Medicare Part D program.  There are numerous proposals, they are evolving, so we are going to do our best today to give you the lay of the land as it currently stands.  I know you’re used to hearing me say it; the Alliance does not advocate for any policy or regulatory solutions.  We are also agnostic as to the correct spelling of “donut”; we’ll be getting into that later.  So we want to orient you to the different components of the proposals, so whatever happens with the legislative process and the politics, which are sort of out there and we’ll leave for others to deal with today.  But whatever happens, the concepts remain the same, so hopefully we’ll give you more of a grounding that you need for going forward.   I’d like to thank Arnold Ventures for supporting today’s briefing, and I’d like to invite Mark Miller, who is Executive Vice President of Healthcare, to make some welcome remarks to you all.  Thanks, Mark.   MARK MILLER:  I’ll be brief.  Just so know, Arnold Ventures is a philanthropy, take on complex problems, education, criminal justice, healthcare, that type of thing.  We sponsor research, develop policy, we do education things like this through the alliance.   A few years ago when we really got involved in drugs, I would have tried to motivate this conversation by saying we’re going to spend seven and a half trillion dollars on drugs over the next decade, 30 percent of people can’t fill a script because it costs too much.  American voters, whether they’re Republican or Democrat are highly activated on this issue, want a change and would like to see a change.  Today, I think it’s actually easier to motivate it.  In both the House and the Senate, you have passed legislation curbing anti-competitive activities like pay-for-delay, so there’s standing legislation separately in the houses on that.  In both the House and the Senate, there is legislation pending on reforming Medicare Part D’s risk structure, which will be discussed today.  There’s legislation in both the House and Senate, limiting price increases in Part D, which will be discussed today, and then in the House you have legislation on negotiation, which is out there.  So I think, actually, you and the Congress are a historic moment and I think there’s a lot that can happen here today that will inform that.  And so I’d like to thank Sarah for putting this together, I appreciate it.   SARAH DASH:  Thanks, Mark.  Great, well thank you.  We have a terrific panel today.  Before I introduce them, let me just briefly cover a couple of housekeeping notes.  First of all, it’s like 150 degrees in here.  They are turning the heat down, just so you know.  Please stick with us.  And thank you for bearing with us.  You can join today’s conversation on Twitter at the hashtag #allhealthlive.  This is an on-the-record briefing.  And in your packed of handouts, you’ll find a blue evaluation form — you’re used to me saying this by now, but please fill it out before you leave and hand it to the registration desk.  And you have a green question card on your chair, so be thinking of questions throughout the presentations and then we’ll give you a chance to ask your questions during the discussion session either through the cards or we’ll have mics.   With that, let me introduce our terrific panelists and you can find their full bios in your folder.  First I am very pleased to introduced Leigh Purvis, who is the Director of Health Services Research in AARP’s Public Policy Institute.  Leigh leads the Institute’s work on prescription drug pricing, biologic drugs, and prescription drug coverage.  She’s the co-author of the Public Policy Institute’s annual RX Price Watch Report, a prescription drug price tracker tool heavily used by older Americans.   Next, we have Tara O’Neill Hayes.  Tara is Deputy Director of Healthcare Policy at the American Action Forum, where she focuses on health insurances costs and coverage, Medicare and Medicaid, drug pricing and reimbursement, and the budgetary impacts of healthcare programs.  Prior to joining the American Action Forum, Tara was a legislative assistant in the U.S. House of Representatives for various members and from her home state of South Carolina.   Next, we’ll hear from Tricia Neuman.  Tricia is Senior Vice President and Director of the Medicare Policy Project at the Kaiser Family Foundation.  She’s a highly regarded Medicare expert, currently working on issues related to health reform proposals, including Medicare for All, and other proposals to expand access to public coverage and prescription drug cost.  She’s also a guest lecturer at Harvard’s Kennedy School of Government, Johns Hopkins, and Georgetown.   Finally, and last but certainly not least, we are pleased to have with us Chris Sloan.  Chris is an Associate Principle at Avalere, where he advises a number of clients, including pharmaceutical manufacturers, health plans, providers, and patient groups on key policy issues, facing the healthcare industry.  His expertise includes prescription drug pricing, economic and population impact of policy, ACA, generic drugs, and biosimilars.  So wealth of expertise here, and we know in the room as well, so we’re excited to have all of you get us started.  So Leigh, why don’t you kick it off?   LEIGH PURVIS:   Thanks.  I’m going to try to do a little bit of level setting for those of you who perhaps are not immersed in Part D every day, and also give you a better idea of where beneficiaries stand, in looking at this program.   So Medicare Part D has actually been around for quite a while.  It was created by the MMA, but actually implemented in 2006.  It is voluntary.  Beneficiaries have the option of enrolling.  However, you may also know that there is a late enrollment penalty.  So for Medicare beneficiaries who do not have coverage for prescription drugs, if they choose not to enroll in Medicare Part D, they will be forced to pay a late enrollment penalty.  Another important part of the program is Extra Help, which provides a lot of financial assistance for people who have low incomes and low assets.  There are a lot of beneficiaries that are qualified for Extra Help and it’s incredibly important, given the costs associated with the program.   So how does Part D pay for prescription drugs?  Medicare itself pays for a subsidy that covers about 75 percent of the expected cost.  It comes in two forms.  One is a direct subsidy that can help reduce premiums, the other is reinsurance.  And that is for spending that occurs in catastrophic coverage, when someone’s prescription drug costs exceed a certain threshold.  The enrollees are responsible for the remaining costs through premiums and they also pay cost sharing that can differ, but is required by the plan.  One thing that is important to note kind of for the following conversation is that Medicare is not allowed to negotiate with drug manufacturers.  Medicare Part D plans can negotiate, however, there are a lot of Medicare Part D plans on the market and there’s an economy of scale at play here.  Medicare representing all beneficiaries would have a lot more negotiating clout in an individual plan.   So how does coverage work?  There are basically two types of plans out there:  One is a stand-alone prescription drug plan and they just cover prescription drug benefits.  Those are PDPs.  There are also Medicare Advantage plans that include prescription drug coverage, those are shorthand MAPDs. The plans do have certain requirements that they have to meet, but there is a lot of variation in terms of what premiums are charged, what type of cost-sharing is required and which drugs are covered and how.  The benefit itself is also complicated.  There are a number of different phases, the deductible, initial coverage phase, coverage gap phase, and catastrophic coverage.  Those benefits move with spending.  I get the easy part of the day, which is explaining what the benefit used to look like.  So in 2006, this is the Medicare Part D benefit.  You can see there’s a deductible within the initial coverage phase.  The enrollee is responsible for 25 percent, plan pays 75 percent.  And then there was a coverage gap, when the enrollee was responsible for 100 percent of their cost, until their out-of-pocket costs reached a certain threshold, which in 2006 was $3600.  After that time, they entered what is known as catastrophic coverage and it’s important to note, this is not a hard cap on cost.  You’ll see that the enrollee is still responsible for five percent of their cost.  So you can have enrollees who are technically in catastrophic coverage, who are still paying a fair amount of money for their prescription drugs.   The question here:  Is Part D a success?  Absolutely.  From the beneficiary perspective, Part D is great.  The reality is, there is now prescription drug coverage for Medicare enrollees that did not exist before.  And you can see that kind of in the enrollment numbers.  As of now, about 75 percent of eligible Medicare beneficiaries are enrolled in Medicare Part D.  they are also extremely happy with that coverage.  The vast majority of them have very high satisfaction both with Medicare Part D program and with the plans that they are enrolled in.  What’s interesting about that is, you know, they may be a little bit too satisfied with that coverage.  A lot of the Part D was premised on the idea that enrollees would switch plans and that would increase competition because plans would be competing for their coverage.  However, most of the numbers that we’ve seen so far indicate less than 15 percent of enrollees are actually changing plans, which means that competition that we were expecting, really is not taking place.  And from the beneficiary side, what’s important to keep in mind is by not switching, a lot of them are actually paying a lot more for their Part D coverage than they potentially could from a plan that would offer similar coverage but potentially with lower premium, lower cost sharing.  So it’s not to their benefit to stay with those plans year after year.   Something else to keep in mind is, even though everything looks rosy for the beneficiary perspective, the reason that we’re here today is that there are definitely some signs of challenges ahead.  Part of that challenge are the spending numbers.  I’m sure you all have seen all of these at this point.  Part D spending has accelerated dramatically since the program was implemented in 2006.  A large part of that is spending in that catastrophic portion of the program, where we’re seeing people who are effectively blowing through the benefit.  And what’s important to keep in mind about that catastrophic portion of the program, is that Medicare is responsible for 80 percent of the costs there.  So we’re seeing more and more beneficiaries taking high cost drugs, or having high prescription drug spending, and that’s leading to more and more spending in that catastrophic portion of the program.  You can see the trustees are projecting that the re-insurance payments will account for nearly 80 percent of those subsidy payments that I mentioned at the beginning, by 2027.  So that’s a drastic change in how the spending is being spread out through the benefit.  I think the important thing to keep in mind is what is driving that increased spending in catastrophic, is prescription drug prices.  Part D covers prescription drugs.  What we were seeing is the result of what we were seeing in the underlying prescription drug market in terms of high and growing prescription drug prices.   Something else to keep in mind, especially from the beneficiary perspective, is that a lot of you are probably seeing announcements that the basic premium is declining.  It’s been holding steady.  The important thing to keep in mind is that is an average and when you look at where people are actually enrolled, what plans actually have high enrollment, the average is actually closer to $40 per month and even that average masks a great deal of variation.  When you look at the popular plans, you can see that there are premiums that range from yes, around $30, but there are some plans that have premiums that exceed $100.  So what beneficiaries are actually experiencing is very different from the averages you’ve been seeing.  The other thing to keep in mind, is premiums have been growing pretty quickly.  A lot of these popular plans have premiums that have doubled or even tripled since 2006.   We’re also seeing a market change in cost-sharing under Part D.  A lot of Part D plans are using co-insurance, which is where you’re charged a percentage of the drug’s price, as opposed to a flat co-pay.  And sometimes you’ll see plans that have co-insurance for all tiers within their formularies.  So every single drug is subject to co-insurance.  Medicare Part D does limit how much cost sharing you can charge to run $100 for a co-pay and 50 percent co-insurance.  So if you think about some of the prices we’re seeing out there, that can add up to a lot of money very quickly, and we’re seeing more and more plans using those maximums.  As I mentioned earlier, enrollees are responsible for some cost-sharing, even when they’re in catastrophic coverage.  About one million enrollees who don’t receive the low income subsidy, reached catastrophic, which is twice the number than entered in 2007.  Again, going back to that five percent cost-sharing, if you’re on a high priced drug, there are some beneficiaries who have seen cost-sharing that exceeded $10,000 for their Part D drugs alone.  That’s before you’re talking about premiums, or other healthcare costs; which when you consider the fact that the median income for a Medicare beneficiary is just over $26,000, obviously is not financially sustainable.   In terms of the future, I do think that the numbers we’re seeing under the Medicare Part D program and part of the reason we’re here today, is that the current trends are simply not sustainable.  The other thing to keep in mind is this is not something that affects Medicare beneficiaries.  It’s affecting everyone in this room.  Medicare is a taxpayer funded program.  This is an important issue for absolutely everyone.  From AARP’s perspective, we are very mindful of the beneficiary impact, and what we’re looking at, going back to the relatively low and fixed incomes in comparison to increasing premiums and increasing cost-sharing is simply not something that can work for the long term.  And again, from our perspective again, Part D, great program, very happy it’s here, but the reality is, we’re reaching a point where the access and affordability that came with that program may not be able to continue until we changed.  Thank you very much.   SARAH DASH:   Thanks, Leigh.  Tara?   TARA O’NEILL HAYES:  So I’m going to skip through the first couple of my slides because Leigh has already gone over that.  What the benefit structure used to look like, and then the ACA started closing the coverage gap in 2010 by requiring primarily manufacturers for brand-name drugs and biosimilars to start paying a rebate in the coverage gap.  That was 50 percent of the cost were going to be covered by — or are covered by drug manufacturers.  One other thing that the ACA did was include a provision to temporarily slow the growth rate of the catastrophic coverage threshold.  So you can see in the chart here, the dotted line is what that threshold would have been if this provision was not included.  The red, solid line is what it actually was.  That ends — that temporary slow down ends next year, so you see the lines converge again in 2020.  But one thing I want you to take away from this, is that that change was part of, yes, we have new drugs that have come to market, and yes, we have had price increases, and the drugs themselves are becoming more expensive, but also this is another factor that has contributed to more people reaching the catastrophic phase and they are doing so after a less spending then otherwise would have been required.  And then with the manufacturer rebates provided and the coverage gap, those also count towards the beneficiary’s out-of-pocket costs in terms of what’s determining when a beneficiary reaches the catastrophic phase.  So those two things also contributed to more costs occurring in the catastrophic phase.   And in this chart, you can see the impact of that.  This is — the black at the bottom of the chart is the direct premium subsidy provided by the government, and then the darker gray at the top is the reinsurance subsidy provided by the government.  So you can see, after the ACA, the components of the subsidy has significantly shifted.  It’s basically been flipped on its head.  The premium subsidy is much smaller and the reinsurance subsidy is increasing dramatically.   Then last year, Congress passed the BBA, which included another change to the Part D benefit design, increasing the drug manufacturer coverage gap rebates from 50 percent to 70 percent.  And they took that extra 20 percent that the manufacturers are paying, and instead of reduced the amount that beneficiaries would have had to pay, they reduced the plan liability.  So that means that plans in the coverage gap are now responsible for only five percent of the cost for brand-name drugs or biosimilars.  They are still responsible for 75 percent of cost, I guess, that’s next year, technically — we’re still closing the coverage gap, so next year they’ll be responsible for 75 percent for generic drugs, but they’ve only got the five percent here for brand-names and biosimilars.   A couple things to take away from this:  One, reducing plan liability.  Plan liability is essentially what your premiums are going to be.  And so by reducing plan liability, you’re able to reduce premiums.  And in fact, next year, the average premium, as Leigh mentioned, is going to be $30.  That’s equal to what it was in 2008; 12 years ago.  As costs increase, there’s two ways that those costs get paid:  Premium and out-of-pocket costs.  And so if premiums are what they were in 2008, obviously out-of-pocket costs have had to rise significantly, which is why we’re all sitting here today, it’s why we’re having so many hearings, it’s why you hear the outrage.  Those out-of-pocket costs are really high because those premiums have been kind of kept artificially low.   Another consequence with this 75 percent liability for generics versus five percent for brand-names and biosimilars, is that it only in an plan’s financial interest for the beneficiary to take a generic drug in the coverage gap, if that generic is more than 15 times less expensive than the brand-name drug, which is obviously not something that we want to be encouraging.  We need people to take generic drugs in order to help hold down costs for the market at large.  And to encourage generic manufacturers to develop generics, right?  So we don’t want that incentive in the system.   And then lastly, because the mandatory rebates in the coverage gap are in that fixed amount of spending, so the light blue part that you see here, there is a fixed amount of dollars that are subject to the mandatory rebate.  That means there’s a maximum amount of rebate that will have to be paid by a manufacturer.  And so in 2020, that maximum rebate is $3,698 and that rebate will paid by a drug that costs $9,303 or more.  So the same rebate will be paid by a $9,300 drug, versus a $100,000 drug.  That’s making it much more punitive to lower cost drugs, which I don’t think is really what we’re going for here.   So what AF did in proposing a restructuring of the benefit, we sought to eliminate or at least significantly reduce some of these perverse incentives.  So to go over some of the highlights, one of the most important things is moving that mandatory rebate from the coverage gap into the catastrophic phase.  And let me just explain why we set it at 9 percent.  I know that’s a funky number.  So we hired Milliman, an actuarial firm, to do analysis, and they found that nine percent in catastrophic would be budget neutral for the industry over the ten year window — they looked at 2020 to 2029, for the industry as a whole, relative to that 70 percent in the coverage gap.  Then 20 percent, that is what MedPack had proposed years ago and it was — everyone had kind of seemed to agree was appropriate, reducing the government reinsurance liability to 20 percent.  And so then the plans are left with that remaining 71 percent.   So a couple things that changing this does:  one, by moving the rebate into the catastrophic phase, it ensures that the amount of the rebate increases as the price of the drug increases, which has two benefits:  one, it puts pressure on launch prices and also provides a disincentive for raising prices.  With the insurers having significantly more liability, both in the initial coverage phase and in catastrophic coverage, they should have more incentive to help control costs.  And then finally, the out-of-pocket cap for beneficiaries provides real financial protection for beneficiaries, that is much needed. Then we have the Senate Finance proposal.  It’s similar in concept to our plan, obviously the numbers are different, and I won’t run through all of them, you can see them yourself.  But two significant differences:  the prescription liability they set at 20 percent in catastrophic for manufacturers, which is of course more than double the nine percent that Milliman had found to be budget neutral.  So that means it’s going to double the impact for pharmaceutical manufacturers, if this were adopted.  And then one thing that I really like that they did is they hold plan’s liability for 60 percent in catastrophic for both brands and generics.  So now plans have the same incentives throughout — or the same liability throughout the benefit for brands versus generics, so you’ve eliminated that disparity where a plan might actually prefer that a patient take a brand-name drug.   Lastly, we have H.R. 3, or Speaker Pelosi’s Plan, as it’s often referred to.  It sets a significantly lower out-of-pocket cap and the also significantly increases the manufacturer liability.  So it’s now gone from 20 percent in the finance proposal to 30 percent in catastrophic here.  But then also 10 percent for all spending in the initial coverage phase.  So above the deductible.  So our analysis has found that the hit to manufacturers is 3.6 times greater than what we proposed in ours.  So it’s obviously going to have significant presence there.  And then they also maintain this disparity in insurer liability between generics and the brand-name drugs.   Next, I’m going to quickly run through a couple of these slides.  This is just showing the maximum rebate under each of the plans that would be paid for a drug based on the given price.  And it shows also the percentage of the rebate as a percentage of the drug’s price.  And so you can see, they all have reversed this so it’s not more punitive to lower cost drugs anymore, it does, under each of them, increase as the price of the drug increases.   This is an example, I’m also going to skip past, of just liability for a $30,000 drug, so you can see the differences.  And then this is the last one I want to spend just a minute on.  So I did some analysis of the plans and let me just provide some caveats here.  So this is based on the 2017 data on the CMS drug spending dashboard.   I made some assumptions about how utilization and prices would change from 2017 to 2022 and based on those assumptions, I calculated the number of drugs for which the average spending per beneficiary in a year — for just that drug alone, if they took no other drugs, just that drug, would trigger the rebate requirement.  So that is obviously a much lower price point under the Pelosi plan, because they would have to start paying rebates after the deducible.  So $485 is what we estimate the deductible will be in 2022.  And then I looked at the minimum amount of rebates that would be required just from those drugs alone.  That’s obviously a lower bound of all of the rebates that will be paid.  So these are just the drugs that their cost alone requires a rebate.  This is how much we estimate would be collected under each of the plans.  So you can see the impact under H.R. 3, Pelosi’s Plan, is significantly higher than any of the others.   Then there is also a chart just showing the out-of-pocket costs based on various levels of drug spending.  Again, you can look at that on your own.  I’ll close by saying, all of these plans seek to put downward pressure on drug prices.  They seek to increase the incentives at the plans, the insurers, to control costs, but there are significant differences across the plans and those have significant impacts, obviously, and in my opinion, the greater the mandatory rebate, the more of a market distortion you are going to have.  So there’s a lot to consider there.  But I will leave it there and I look forward to your questions.  Thank you.   TRICIA NEUMAN :   That was a lot.  That was great.  Hi, everybody, I’m Tricia Neuman, I’m from the Kaiser Family Foundation.  For those of you who are not familiar with the Kaiser Family Foundation, we are a non-profit, non-grant making organization.  We are not affiliated with Kaiser Permanente.  So what are we?  That was a lot of “not’s”.  We are a source of information and analysis that feels important for informing the debate and we produce information on a broad range of health policy issues and our mission is to inform you and that’s what we do.   What I’m going to do this afternoon, is present a little bit of polling information that might be of interest to you and then I’m going to talk about the other proposals, since Tara did such a complete job talking about benefit redesign.   Mark mentioned earlier that there is actually a fair amount of agreement or some sources of agreement in that there’s now the provisions that have made it through H.R. 3, which have worked their way through three committees.  Now the Elijah Cummings Lower Drug Costs Now Act, named because he was such a strong advocate for something about drug prices, because he understood the extent to which it was a concern for his constituents and others.  That has now passed the Labor Committee, the Ways And Means Committee and the Energy in Commerce committees.  There are also provisions that have passed the Senate Finance Committee and also President Trump’s Administration has put forward proposals that would also deal with prescription drug pricing.  And believe it or not, there are common elements across these three — the House, the Senate, and the Administration, that could form the basis of a compromise and a negotiation if there was the political will to do that.   Speaking of political will, we do polling.  And we have run several options by the public, and what you can see here is there is strong support — really strong support across Democrats, Independents, and Republicans on almost any proposal you put in front of them to do something about prescription drug costs.  This is because this is a pocketbook issue people understand, that either they or someone they know is really upset about what they are paying out-of-pocket for their drug cost.  And if your next question is, “Well, what about people on Medicare, because they have Part D?”  Interestingly enough, you would see very similar results for older people.  However, the strong level of support can soften when people hear some of the arguments that the industry has put forward in opposition to proposals, like allowing the Secretary to negotiate drug prices.  What you could see here is support remains strong when they hear that people will save money, that the Federal Government will pay less, but that support weakens and opposition increases when they hear, “Well, this could lead to less R&D, research and development, and it could lead to less access for prescription drugs.”  So that is something to keep in mind, because these are clearly the arguments that are being used.   Looking across the House, Senate, and Trump Administration, I’m not going to talk about the top row, because again, Tara did a great job of that.  I’m going to focus a little bit on the second two rows, which are having the Secretary negotiate drug prices and inflation-based limits on drug prices.  I will say there’s another title that was added to the bill on the House side, which was Strengthening Protections for Low Income Beneficiaries.  That is a provision in H.R. 3 now, as passed by two committees — actually, three committees, though it’s not in the Senate Finance proposal and it’s not in the Trump Administration, and that would expand eligibility for low income benefits.   So let’s go to this issue of government negotiations.  For those of you who haven’t been around so long that you have gray hairs spewing somewhere, this issue of government negotiations have been around since there was debate about the drug benefit.  And particularly once the new drug law was enacted, there was a phrase that was put in the statutory language that’s called the non-interference clause.  And the non-interference clause basically says, “Thou shalt not negotiate with drug companies, Madam Secretary.”  And that’s really the law of the land.  And the thing is, there’s so many members of Congress who don’t understand that and have campaigned on this and say, it just makes no sense, why shouldn’t the government negotiate to bring lower prices to people?  Well, interestingly enough, they’ve asked CBO about this.  And every time they’ve asked CBO, hey, wouldn’t it be great if the secretary were to negotiate drug prices?  CBO has said, “No, not so much.  We don’t actually think it will do anything.”  And that was quite frustrating to members of Congress who were sure that that would actually do something.  So over the years, this has been something that has come back kind of over and over again, and this year for the first time after seeing the language in H.R. 3, CBO has said, hmm, maybe this could do something.  And really, it’s because all along, CBO was saying, you need teeth.  You need a penalty.  You need a motivation to get both the Secretary and drug companies to come to the table in order for a CBO to believe it will actually do something.  And in H.R. 3, there’s teeth and CBO has said, yes, there will be real savings.  So that is a significant change both in the drafting of the legislation and CBO’s response.   So how would the Secretary negotiate drug prices under H.R. 3?  What does that look like?  So if you look at the bill that’s been modified by the committees, they modify the non-interference clause, they don’t actually repeal it.  They give the Secretary the authority to negotiate for at least 25 drugs and now that has been upped — over time it will be 35 drugs.  Drugs for which there’s no market competition or — yeah.  This is based on drugs with the highest Medicare Part D spending.  So these are single source drugs.  Unique drugs with high spending.  There’s also now a new provision that was put in as the committees were considering the bill, that would add to the roster of drugs that could be negotiated.  Newly approved drugs with prices at or abo