Oct 3, 2016
Washington Healthcare Update
This Week: Congress funds the government until Dec. 9.
House of Representatives
3. State Activities
4. Regulations Open for Comment
Continuing Resolution Passes: Funds Zika and Opioid Legislation
On Sept. 28, Congress passed a Continuing Resolution to fund the government through Dec. 9. The resolution includes $1.1 billion in funding for Zika
vaccine development and mosquito control, as well as $37 million to fund the opioid legislation signed into law on July 22. The breakthrough came after
a deal was reached with House lawmakers to hold a vote on including funding for Flint, MI, in a separate water resources bill. Democrats blocked the CR
a day earlier over objections that the funding bill did not include funding for Flint. The Senate passed the legislation 72-26 and the House passed the
House of Representatives
Ways and Means Republicans Work on Home Health Appeals Settlement Relief
Representatives Tom Price (R-GA) and Greg Walden (R-OR) are working on a home health bill that could pave the way for a settlement to address the
issues raised by the fact that providers cannot get a timely appeal when Medicare claims are denied. The Centers for Medicare and Medicaid Services
(CMS) says it is exploring all options to reduce the appeals backlog, but has not ruled out settlements similar to the one it reached last year with
hospitals, for other health care sectors.
To reduce the backlog, CMS executed settlements with hospitals over their appeals last year. As of last month CMS says the agency executed settlements
with over 2,000 hospitals over 346,000 claims. CMS has paid providers about $1.47 billion.
House Approves Mental Health First Aid Act
On Sept. 27, House lawmakers approved the
Mental Health First Aid Act under
suspension of the rules. The bipartisan measure, which had 36 Democrats and 11 Republicans as cosponsors, passed by voice vote. The bill authorizes $20
million in grants to train people how to assist a person experiencing a mental health crisis. Critics say the bill takes resources away from addressing the
behavioral provider shortage. The training program is administered by the National Council for Behavioral Health. The Senate companion bill has a
bipartisan collection of 18 cosponsors. It has been referred to the Committee on Health, Education, Labor and Pensions in that chamber.
179 House Members Tell CMS to Cease All CMMI Initiatives
“CMS’s Innovation Center should cease all current and future mandatory initiatives,” 179 House members wrote in a Sept. 29 letter to CMS acting
administrator Andy Slavitt and Deputy Administrator Patrick Conway.
The letter, which was led by Reps. Tom Price (R-GA), Charles Boustany (R-LA) and Erik Paulson (R-MN), says the innovation center should impose the limits
on its experimental models and only gradually expand them following dialogue with participants.
Medicare is forcing new models without consulting with the doctors, hospitals and patients who must participate in them, the lawmakers say. Medicare’s
knee- and hip-replacement bundle model, Part B drug payment plan and forthcoming cardiac bundled-care model are all examples of forcing doctors to
participate without consent.
“As a result, Medicare providers and their patients are blindly being forced into high-risk government-dictated reforms with unknown impacts,” the letter
Republicans on Capitol Hill are already working on legislation to stop the rollout of Medicare’s Part B drug payment plan should the Obama administration
finalize the rule later this year.
Right to Try Act Blocked in the Senate
On Sept. 28, Sen. Ron Johnson (R-WI) failed to get his right-to-try law through the Senate by unanimous consent. Minority Leader Harry Reid (D-NV) objected
to passing the bill without its going through the formal committee process.
The Trickett Wendler Right to Try Act of 2016 (S. 2912) would prevent the
federal government from interfering in state right-to-try laws. Approved in 32 states, the laws allow patients, health care providers and drug
manufacturers to give terminally ill patients experimental drugs and devices that have passed Phase I of the FDA approval process and remain in clinical
trials but are not yet on pharmacy shelves.
The bill would also exempt drug companies, distributors, prescribers and those possessing the drug from any liability regarding the treatment. FDA would
also be prohibited from using the experience of patients using a product under right-to-try to adversely impact approval of the treatment.
Johnson’s bill has 42 cosponsors including two Democrats, Sens. Joe Manchin (D-WV) and Joe Donnelly (D-IN). In the 32 states that have passed right-to-try
laws, the issue has been very bipartisan with more than 97 percent of lawmakers supporting the measures.
The libertarian Goldwater Institute, which has pushed the laws, said at least 78 patients have been treated under the state laws. Bioethicists worry the
laws offer patients false hopes, as drug companies are not obligated to provide requested treatment and FDA and the pharmaceutical industry have not been
supportive of the state laws.
HHS Secretary Burwell Calls for Authority to Negotiate Drug Prices
On Sept. 29, HHS Secretary Sylvia Mathews Burwell called on Congress to give the department the power to negotiate drug prices when asked to comment on
the controversy around the skyrocketing cost of EpiPens.
The cost of an EpiPen two-pack has increased from $100 in 2007—when Mylan acquired the product—to over $600 this year, causing public discontent and
prompting congressional investigations. Burwell did not address the EpiPen case specifically, but noted that FDA approved more generic drugs last year
than any other year in its history.
Insurers Ask CMS for Interim Final Rule on Third-Party Steering of Patients
As a response to a request for information by CMS, the health insurance industry has called for the agency to immediately issue an interim final rule that
prohibits third-party entities from steering consumers out of Medicare or Medicaid and into private plans or otherwise attempting to glean higher
reimbursements for certain providers by paying premiums for high-cost patients.
AHIP also asks CMS to collect information from stakeholders on the growing use of drug discount cards, copay cards and related programs.
Last month, CMS issued a request for information seeking advice on how premium assistance programs offered by nonprofits affect insurers. CMS raised
particular concern that third parties might be inappropriately targeting high-cost patients eligible for Medicare or Medicaid and steering them into
private coverage. The same day it issued the RFI, CMS sent letters to all Medicare-approved dialysis facilities warning it was considering civil monetary
penalties or other actions, including allowing plans to limit payment on dialysis services, to rein in any bad actors.
AHIP says its members have seen a significant increase in steering over the past three years.
While much of the activity has been around dialysis clinics, AHIP says it also extends to other providers and entities, including drug copay programs and
AHIP proposes that an interim rule should do the following:
Prohibit direct and indirect premium payments by providers to entities in which the provider has a financial interest by using CMS’s broad rulemaking
authority under Medicare and Medicaid.
Confirm that certain third-party payments are prohibited under the Civil Monetary Penalties law.
Consider health care providers out of compliance with conditions of coverage if they fail to provide information to consumers on their full range of
Interpret Medicare private contracting requirements in ways that discourage intentional steerage between markets.
Clarify plan authority to reject certain third-party payments and establish that federal rules supersede state guidance.
Revise guaranteed availability and renewability requirements for Medicare-eligible individuals to say that issuers are not required to sell policies to
Modify individual market rules to prevent inappropriate steering of Medicaid enrollees to marketplace coverage.
Increase transparency of third-party payments.
Utilize additional regulatory and operational tools to address third-party payments.
The Blue Cross Blue Shield Association made similar recommendations. Blue Shield of California proposed the criteria include:
“The assistance is provided on the basis of the insured’s financial need.
“The assistance is provided for the full plan year.
“The institution/organization is not a healthcare provider.
“The institution/organization is not financially interested.”
CMS Issues Final Rule for Long-Term Care Facilities
On Sept. 28, CMS finalized the first major policy changes in 25 years for long-term care facilities participating in Medicaid and Medicare. The final rule
is intended to reduce unnecessary hospital readmissions and infections, and improve quality and safety measures. The new requirements will affect the
roughly 1.5 million residents at more than 15,000 long-term care facilities across the country.
The rule requires that facility staff members are properly trained to care for residents with dementia in order to prevent elder abuse and requires
facilities to base staffing levels, in part, on the health of the residents. The rule also gives more responsibility to dietitians and therapy providers
when state licensing laws allow, and it prohibits the use of pre-dispute binding arbitration agreements. The agency proposed the rule last year and it
received nearly 10,000 public comments.
For more information, click here.
CMS, Vermont Negotiate All-Payer Waiver Model
On Sept. 28, Vermont released an all-payer waiver model agreement negotiated with federal officials specifying that the state will seek to limit health
care cost growth to 3.5 percent per capita. The agreement seeks to improve care delivery and contain health care cost growth across Medicare, Medicaid and
As part of the waiver, Vermont is set to launch a state-specific accountable care organization initiative at the start of 2019. Under the initial terms,
state officials said Vermont would receive around $51 million in total Medicare funding between 2017 and 2022, including a $9.5 million one-time investment
in 2017 partly to build ACO infrastructure.
The waiver also sets a Medicare-specific cost growth target as 0.2 percent less than the national trend. It outlines several statewide measures for
improving health outcomes and quality, including reducing deaths related to drug overdoses and suicide, and ensuring the vast majority of adults have a
primary care provider. The agreement still has to be signed by CMS and Vermont officials before it is considered final. The state will have three public
forums on the waiver in the next few weeks.
HHS Secretary Burwell Announces New Campaign to Enroll Young Adults into Obamacare
On Sept. 27, HHS Secretary Sylvia Mathews Burwell
the Obama administration is launching new initiatives to reach young adults during the next open enrollment period and to encourage them to sign up for
CMS will conduct outreach utilizing Twitch, a social video platform and community for gamers. Twitch currently attracts close to 10 million daily users
who, on average, spend 106 minutes per person per day on the site. Twitch’s core demographic also has above average uninsured rates.
Burwell made the comments at a White House summit on boosting young adult enrollment in the exchanges. Getting younger, healthier Americans to sign up
for coverage is seen as crucial to stabilizing premiums on the exchanges. About 28 percent of Obamacare enrollees who signed up for coverage through
HealthCare.gov this year were between the ages of 18 and 34.
CMS will also work with Tumblr to reach out to young adults. Burwell added that the administration will announce more outreach strategies as well as
consumer tools, including new mobile technology to make it easier to shop for a plan on a cellphone or tablet.
Open enrollment begins Nov. 1.
CMS Save the Date for Rural Health Solutions Summitt
On Oct. 19, CMS will be holding its Rural Health Solutions Summit at CMS headquarters in Baltimore, MD, from 9 a.m.–4 p.m. CMS leadership, the CMS
Rural Health Council and stakeholders from all sectors of the health care industry will be engaging in in-depth discussions about ways to improve
access to care in rural America and supporting innovation in care delivery.
3. State Activities
Alabama: Cut to Medicaid Primary Care Bump Will Be Restored
Alabama Gov. Robert Bentley recently announced that the Medicaid pay bump to primary care physicians will be restored because of new Medicaid funding. The
$15 million pay increase will be reinstated on Oct. 1. Officials have also requested an eight-month extension for the state’s Medicaid waiver that sets up
regional care organizations. The new effective date would be July 2017.
Arkansas: Arkansas Lawmakers Approved Mental Health Medicaid Cap
An Arkansas legislative committee has preliminarily approved a proposal to limit Medicaid coverage for mental health services, despite concern from some
providers that it could disrupt patient care. The plan would cap Medicaid coverage for group psychotherapy to an hour a day instead of 90 minutes and would
limit the number of hour-long sessions to 25 per year, per person. The state’s Medicaid inspector general proposed the cap and said Arkansas Medicaid was
billed for group therapy significantly more than other states. Some providers argue the change could disrupt their practices so much that they would be
forced to close.
Kansas: Kansas Has Spent Over $2 Million Fighting Medicaid Application Backlog
Kansas has spent $2.3 million fighting a Medicaid application backlog that was caused partly by the Department of Health’s electronic eligibility system,
according to a state audit. The increase in spending was due to an increase in staffing to help cut the backlog from a high of 14,000 several months ago to
about 1,700 applications that have been lingering for more than 45 days.
Tennessee: Task Force Sent CMS Medicaid Expansion Plan Measurement
On Sept. 26, a legislative task force developing a phased-in Medicaid expansion plan sent CMS potential measurements to be used to go from the first phase
to a broader phase 2 expansion. The two-phase “3-Star Health Insurance Pilot” would initially target low-income individuals with behavioral health issues,
as well as uninsured veterans. The second phase would make the program available to all qualifying Tennesseans up to 138 percent of the federal poverty
level. That is, if certain metrics were met. Task force Chairman Cameron Sexton said lawmakers will begin fleshing out details on the plan’s health savings
accounts and cost-sharing levels.
Vermont: Report Finds Medicaid Pays for Almost 70 Percent of Buprenorphine Prescriptions
A new IMS report
on utilization trends of buprenorphine—a medication used to treat opioid addiction—finds that Medicaid funding pays for 68 percent of Vermont’s total
prescriptions, the highest in the country and much higher than the national average of 24 percent. The report also found that there are 34.3 buprenorphine
prescriptions for every 100 opioid prescriptions in Vermont, more than six times the national average. Other states with the highest share of buprenorphine
prescriptions funded by Medicaid include Connecticut, Kentucky, Massachusetts, Ohio, Rhode Island and West Virginia (all of which are Medicaid expansion
4. Regulations Open for Comment
IRS, Treasury Release Proposed Rule on QHP Benchmarks
The IRS and Treasury Department, in a proposed rule released July 6, proposed to
alter how qualified health plan (QHP) benchmarks are determined so that they
account for the costs of pediatric dental benefits. If finalized, the rule would
go into effect for the 2019 plan year.
Although pediatric dental care is one of the 10 “essential health benefits” that
plans are required to cover under the Affordable Care Act (ACA), several plans
do not include such coverage, and consumers instead buy stand-alone dental
products. Meanwhile, the marketplace determines the amount of tax credits a
family can receive to cover the cost of coverage based on the second-cheapest
However, as the proposed rule said, “because qualified health plans that do not
offer pediatric dental benefits tend to be cheaper than qualified health plans
that cover all ten essential health benefits, the second lowest-cost silver plan
(and therefore the premium tax credit) for taxpayers purchasing coverage through
a Marketplace in which stand-alone dental plans are offered is likely to not
account for the cost of obtaining pediatric dental coverage.”
Treasury and IRS added that the existing rules “frustrate” the goal of making
all essential health benefits affordable to those receiving premium tax credits,
so the administration wants to update its interpretation to ensure all 10
services are addressed.
“Consistent with this interpretation, the proposed regulations provide that for
taxable years beginning after December 31, 2018, if an Exchange offers one or
more silver-level qualified health plans that do not cover pediatric dental
benefits, the applicable benchmark plan is determined by ranking (1) the
premiums for the silver-level qualified health plans that include pediatric
dental benefits offered by the Exchange and (2) the aggregate of the premiums
for the silver-level qualified health plans offered by the Exchange that do not
include pediatric dental benefits plus the portion of the premium allocable to
pediatric dental benefits for stand-alone dental plans offered by the Exchange,”
the proposal said.
The rule aims to create the ranking by adding the premium for the lowest-cost
silver plan that does not include a pediatric dental benefit to the premium for
the cheapest stand-alone dental plan, and the premium for the second-cheapest
silver plan without pediatric dental benefits to that of the second-lowest
stand-alone dental plan. The second-cheapest amount from this combined ranking
would be the taxpayer’s applicable benchmark plan premium, the rule said.
CMS Releases Proposed Mandatory Bundled Payment Program
On July 25, CMS proposed new models to mandate bundled payments for cardiac
care. This is the agency’s second program requiring providers to accept set
payments for an episode of care. CMS also proposed extending its existing
mandatory bundled payment initiative for hip replacements to other hip
CMS clarified that under the new Medicare physician payment system starting in
2018, both mandatory bundled payment models could qualify as Advanced
Alternative Payment Models, which would allow participating physicians to be
excluded from a new proposed quality reporting program and instead receive a
lump-sum payment from Medicare.
The agency also announced a new initiative to encourage hospitals to increase
cardiac rehabilitation, in hopes of improving patient outcomes and reducing
To see the proposed rule,
click here. CMS will accept comments on the proposed rule until 5 p.m. on
IRS Publishes Draft Regulations on Reporting of Catastrophic Health Coverage
The Internal Revenue Service (IRS) published new
draft health coverage reporting regulations
in the Federal Register on Aug. 2. The new draft regulations call for the health
insurers that sell catastrophic medical insurance to report any catastrophic
coverage they have provided to the enrollees and the IRS on Form 1095-B. The
rule would first apply to the coverage in effect in 2017—issuers would then send
out the first catastrophic plan 1095-B forms in early 2018.
Catastrophic plans are higher-deductible, lower-value plans that insurers can
sell to people under 30, and to people of any age who earn too much to qualify
for ACA exchange plan premium subsidies. The new draft regulations also call for
the government agencies that offer Basic Health Plans—which are similar to
managed Medicaid programs for people who earn too much to qualify for
Medicaid—to report Basic Health Plan coverage to the IRS.
A third piece of the draft regulations clarifies that an employer providing two
or more types of coverage that come under the minimum essential coverage rules
would just have to report the richest form of coverage.
Comments on the draft regulations are due by Oct. 3.
HHS Proposes Updates to Title X Rules
On Sept. 2, HHS
proposed to preclude Title X grant recipients from using criteria in
their selection of family planning providers that are unrelated to the
ability to deliver services effectively.
Since 2011, 13 states have attempted to restrict participation by family
planning providers in Title X based on factors unrelated to their ability to
provide services. The Title X program provides funding for certain family
planning services, including STD screening and treatment, but funding is not
used to pay for abortions. Although Planned Parenthood is not mentioned by
name in the proposed rule, it has often been the subject of defunding
actions by states and Congress.
In the proposed rule, HHS said the effects already felt by the restrictions
in many states justify the department’s rulemaking. HHS said grant
recipients that do not provide services directly would also be required to
follow the updated standards when choosing subrecipients.
HHS also proposed that a tiered structure governing how funds are
distributed would not be allowed unless it can be proven that a
provider in a top tier delivers Title X services more effectively than a
lower-tier provider. According to the Guttmacher Institute, a research
organization that supports reproductive rights, four states have a priority
system for distributing family planning funds, which often disadvantages
family planning centers.
CMS Proposes Changes to Risk Adjustment in 2018 Marketplace Rules
On Aug. 29, CMS issued the proposed annual Notice of Benefit and Payment
Parameters for 2018, which outlines additional steps to strengthen the
Health Insurance Marketplace. CMS is issuing this rule earlier in the
calendar year in order to provide more certainty to the Marketplace as it
continues to mature.
Beginning in 2017, the proposed policies will take steps to strengthen the
risk adjustment program. First, the rule proposes updates beginning in 2017
to better reflect the risk associated with enrollees who are not enrolled
for a full 12 months. Second, beginning in 2018, the rule proposes to use
prescription drug utilization data to improve the predictive ability of
CMS’s risk adjustment models. Third, also beginning in 2018, the rule
proposes to establish transfers that will help to better spread the risk of
high-cost enrollees, a change that would improve the risk-sharing benefits
of the program.
In addition to the improvements to risk adjustment, the proposed rule
contains other provisions to improve the Marketplace consumer experience and
strengthen the individual and small group markets as a whole. The proposed
rule would give consumers additional tools for assessing the networks of
competing plans; broaden availability of this year’s new standardized plan
options by accommodating state cost-sharing rules; and create consumer
protections for consumers enrolling through the direct enrollment channel.
The proposed rule would also create multiple child age bands that address
instances in which consumers could face large premium changes after turning
age 21; amend the guaranteed renewability regulations to provide additional
flexibility for issuers to remain in an insurance market in certain
situations; and codify several special enrollment periods that are already
available to consumers in order to ensure the rules are clear and to limit
abuse. It also seeks information on a number of suggestions offered by
issuers, consumers, providers and others on further improving the risk pool,
such as additional changes to special enrollment period policies or
outreach; clarifying coordination of benefit rules between Medicare,
Medicaid and the Marketplace; and providing greater certainty on the amount
of user fee revenue spent on education and outreach.
To see the proposed rule,
GAO: State Resources Vary for Helping Beneficiaries in Medicaid Fee-for-Service
On Sept. 29, GAO released a report finding that state
resources vary widely for helping beneficiaries find providers in Medicaid fee-for-service. Millions of Medicaid beneficiaries are in fee-for-service
arrangements, in which states pay health care providers per service—if those providers participate in Medicaid. GAO looked at the resources available to
help beneficiaries find participating health care providers. The 23 states reviewed had four common types of resources: searchable provider directories,
provider lists, helplines and handbooks. These resources had different amounts of information and states differed in how they adapted resources to meet
beneficiary needs, according to the report.
GAO: HHS Misusing Obamacare Funds
According to a new GAO report, the Obama administration is illegally sending payments to health insurers instead of to the federal Treasury as Obamacare
requires. The report states that HHS is “required to collect and deposit amounts for the Treasury, regardless of whether its collections fall short of the
amounts specified in statute for reinsurance payments.”
GAO’s report focuses on how the government handles fees paid by insurers for Obamacare’s reinsurance program, which collects money from all health plans to
help insurers cover the cost of sicker patients in the health care law’s exchanges.
In 2014, the industry-funded reinsurance program was supposed to provide $10 billion to insurers and $2 billion to the federal Treasury. But when total
collections from insurers amounted to only $9.7 billion, HHS opted to funnel all the money toward insurers. The agency paid insurers $7.9 billion in claims
for 2014, the first year of exchange coverage, and held over the remaining $1.7 billion for future payments.
HHS told the GAO that its funding decision was within its discretion under the Affordable Care Act. But the GAO ruled otherwise, finding that the statute
clearly requires that the Treasury get a share of the funds.
To see the full report, click here.
GAO: Report Finds Agencies Involved in Indirect Cost Rate-Setting Process for NIH Biomedical Research Need to Improve Controls
In a new report, GAO found that research organizations involved in the indirect cost rate-setting process need to improve controls. There are three
agencies that set indirect cost rates for federal financial assistance funded by NIH: HHS’s Cost Allocation Services (CAS), NIH’s Division of Financial
Advisory Services (NIH-DFAS) and the Department of Defense’s (DOD) Office of Naval Research (ONR). GAO found that while the three agencies had designed
controls for setting indirect cost rates, deficiencies in the design of some of these controls could result in the waste of federal resources. GAO
identified those deficiencies in its report.
GAO: HHS Needs to Strengthen Guidance and Oversight for EHRs
A new GAO report found that HHS needs to strengthen security and privacy guidance and oversight for electronic health information. Breaches to electronic
health information—involving over 113 million records in 2015—can have serious adverse impacts such as identity theft, fraud and disruption of health care
services, according to GAO. The report outlined recommendations for HHS, including that HHS update its guidance for protecting electronic health
information to address key security elements, improve technical assistance it provides to covered entities, follow up on corrective actions and establish
metrics for gauging the effectiveness of its audit program.
To see the full report, click here.
Hillary Clinton Lays Out Health Care Priorities in NEJM
The New England Journal of Medicine
- Improve—not repeal—the Affordable Care Act. This includes expanding Medicaid to hold-out states, allowing Americans aged 55 and older to buy into
Medicare and creating a public option plan in every state.
- Ensure greater affordability for all Americans. For example, creating a refundable tax credit of up to $5,000 per family for excessive out-of-pocket
- Achieve improved health and health care in an integrated fashion. For example, boosting access to primary and mental health care services.
- Secure true innovations in diagnosing, treating and curing disease. This includes specific investments to fight Alzheimer’s and HIV/AIDS.
Read Clinton’s essay heree.
Donald Trump did not respond to NEJM’s questions.
Kaiser Poll: 77 Percent of People Think Drug Costs Are Unreasonable
According to a new Kaiser Family Foundation poll, 77 percent of people say prescription drug costs are unreasonable—up from 72 percent a year ago. More
than 70 percent of respondents said they support a host of changes sharply opposed by the industry, including: the importation of drugs from Canada,
Medicare’s negotiating prices and requirements that drug companies publicly report how they set their prices.
However, most individuals said their prescriptions were still affordable. About four in 10 people taking four or more medicines reported difficulty paying
for them, compared to 19 percent of people taking fewer than four. Fifty-three percent said a presidential candidate’s plan to address prescription drug
prices would be very important to their vote, while more—61 percent—would give a similar weight to the cost of health insurance premiums. Only 30 percent
rated the Zika outbreak as very important compared to 45 percent for the opioid epidemic.
Additionally, fewer and fewer people think prescriptions drugs make lives better. In 2008, it was 78 percent, Kaiser said; last year it was 62 percent and
that dropped to 56 percent in the new poll. Only 26 percent of respondents in the Kaiser poll were aware that the rate of uninsured was at an all-time low,
while one-fifth believed it was at an all-time high. About 50 percent believed it was the same as it has been. Thirty-eight percent of Democrats knew about
the historically low rate of uninsured people, versus just 17 percent of Republicans and 27 percent of independents.
To see the poll, click here.
Goldman Sachs Report Finds Many Drugmakers Reliant on Price Hikes
Many drug companies are reliant on big price increases to boost their financial performance, according to a new Goldman Sachs analysis of more than 12
drugmakers’ price hikes over the past five years.
Horizon Pharma and Jazz Pharmaceuticals were at the top of that list, with around 60 percent of their sales driven by price increases over five years. They
were followed by Concordia, which relied on price increases for just over 50 percent of its sales growth. Abbvie and Pfizer followed at 19 percent and 17
percent, respectively. At the opposite end of the spectrum was Eli Lilly, Celgene and Gilead. Only 1 percent of Lilly’s sales were driven by large price
hikes, and none of Celgene’s or Gilead’s sales were driven by price increases.
The drugs relying on price increases tended to be older products that were nearing the end of their patent protection. The report concluded that the drug
industry should “take the lead in adopting more rational pricing and greater transparency to reduce political risk.” The report also recommends companies
show more restraint in setting prices of new drugs.
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Charlie Iovino, Vice
Caroline Perrin, Research Assistant
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