New year, new government leaders: What will health care legislation look like in 2021
A conversation with David Root, vice president, Prime Therapeutics government affairs
February 18, 2021
His team of seven monitors the legislative and regulatory landscape for Prime Therapeutics and our clients, both at a federal and state level.
We sat down with David Root to understand what challenges and opportunities face the health care industry in the coming year and learn how his team helps educate lawmakers.
How does Prime interact with federal regulators/legislators and how does Prime stay abreast of legislation and regulation across all 50 states?
Prime’s government affairs team works to develop relationships with all the legislators representing Prime states. We meet with them and their staff to understand their positions and discuss various issues with them. We provide feedback on their legislative ideas and offer them context and background with the hopes that they can then make informed decisions.
My team focuses on our footprint states, where our clients do business. We also connect with the government affairs teams at each our clients so we can collaborate on important issues. We stay abreast of issues that surface in other states by participating in Pharmaceutical Care Management Association (PCMA).
Regular meetings and communications with our clients are key. We also host an annual forum to bring all of our clients’ government affairs professionals together to learn, better understand the issues that jointly affect us, and discuss what we can do together on those topics.
What challenges and opportunities come with a new Biden administration and Democratic majorities in the House and Senate?
With a new congress, everything starts over in terms of legislation, and we’ll be tracking a number of issues. That said, we’re hoping for some ‘regulatory normalcy.
Some challenges we face include managing the changes in priorities between the two administrations. We were very pleased to see the point of sale (POS) rebate rule postponed to 2023 by the Biden administration. The original legislation was hastily developed and ignored several assessments that showed it would not lower drug prices for the vast majority of seniors. With work on 2022 Medicare bids in full swing, there wasn’t adequate time to work on this in a way that would serve the needs of Medicare members and our clients.
What legislative issues are concerning for the health insurance industry, and why?
We’re keeping an eye on topics like most-favored nation (paying no more than the lowest price manufacturers charge other countries for a drug), or an international pricing index (aligning Medicare Part B drug pricing more closely with international prices, allowing private-sector vendors to negotiate prices for drugs, take title to drugs, and compete for physician and hospital business; and changing the drug add-on payment amount), which wouldn’t result in a meaningful reduction of out-of-pocket costs for most seniors.
Direct government negotiation of drug prices in Medicare was proposed last year. The last proposal on that, H.R. 3, said the government would negotiate drug prices for Medicare, and the Commercial markets could use those prices as well.
One of the big issues we’ll be tracking and responding to is the impact of the recent Rutledge vs. PCMA ruling by the U.S. Supreme Court. The Court held that certain reimbursements to pharmacies can be regulated by states and employer plans are not protected from increased costs resulting from state regulation under Employee Retirement Income Security Act (ERISA) pre-emption. If states regulators require PBMs to reimburse pharmacies at each pharmacy’s acquisition cost, pharmacies will be incentivized to buy the most expensive product and not seek the best wholesale price. That will put tremendous upward pressure on drug costs for health plans and consumers.
What’s the biggest misperception state and federal legislators have about pharmacy benefit managers (PBMs)?
The biggest misperception is that PBMs are middlemen who add costs to the drug market but don’t add value.
The reality is exactly the opposite. PBMs deliver significant savings from drug pricing and the supply chain in a variety of ways. Prime channels those savings to our clients and the members they serve.
Our goal is working to improve their understanding that PBMs serve a good and beneficial purpose for the benefit of health plans, employers and consumers.
I always ask people, ‘If PBMs didn’t do what they say they do – which is to save money – why would employers and health plans pay us?’ Every day, employees across our company help people get the medicine they need to feel better and live well, while helping to control costs.
How did you become interested in government?
I’ve been involved with politics and legislation in various roles all my adult life. I actually think civic involvement should be part of everyone’s life, because we all have a vested interested in the process and the legislative decisions made locally at the state level, and federally in Washington D.C.
What future trends do you see affecting the health insurance and pharmaceutical industry?
One trend that will continue is how all health care stakeholders will come to grips with the cost of health care, specifically, consumer costs in health care and drug pricing. The only certain trend is that different people will continue to press different proposals to reduce costs. As always, the devil is in the details of those proposals. And that’s where our government affairs team plays a role – developing and promoting Prime’s solutions to the various problems that result in increased drug costs for consumers.
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