Drug Pricing Debate Gets an F



Last week’s Senate Finance Committee hearing on drug pricing featuring seven pharmaceutical executives earned major headlines but is not expected to result in change. The Administration’s Drug Blueprint has been met with mixed reviews as to its feasibility or potential effectiveness. Several 2020 Presidential Candidates have highlighted the issue, but no proposal has energized the public.

As a patient advocate, I am grateful for the attention on access and affordability of medications for patients while always cognizant that a sustainable solution (not just a slogan) also ensures that we incentivize the continued development of new medications. However, the failure to ask the right questions and acknowledge the full array of interrelated issues involved is why I grade the drug pricing debate so far an F.

What would make for a more productive conversation?

1. Focus on total healthcare costs to achieve actual health

Healthcare history has shown that when one part of the system is reigned in the overall spend stays the same or continues to increase. Only discussing the cost of pharmaceuticals without calculating if they result in net savings or expenses may not lower costs to patients or the system or leave either healthier. Focusing only on out-of-pocket costs or one program will also predictably result in another program, plan, payer, or person picking up the costs. Alternative payment models for bundles or episodes of care and better leveraging payer data to identify optimal allocation of healthcare dollars in ways that make people healthier are paths to more meaningful long-term solutions.

2. Fewer middlemen not fewer choices

Greater transparency has shined a light on rebates to PBMs in exchange for formulary placement and market share resulting in companies wealthier than those that produce medications or provide care, and which create byzantine barriers to patients trying to access the medications doctors prescribe. Reward parts of the healthcare system that provide value to patients.

3. Foreign governments can’t do our job

Trying to outsource difficult conversations, determinations of value, and tailoring policy for the United States by using International Reference Pricing is an abdication of our responsibility. It ignores the realities of healthcare as a major economic sector, job creator, and factor in American global leadership in education, research, and innovation.

4. Fair prices may be higher for some, lower for others, but eventually must fall

What is a fair price for medications that cure disease, restore function, or relieve pain in the context of our overall health and healthcare spending at the individual, employer/payer, state, and national levels? What is a fair price if early research is conducted by the government? What is a fair price after research and development costs have been recouped? Fair to patients, to payers, to the country, and to the companies and investors taking the risk of drug development.  That is a far more interesting and complex conversation than the one we are having.


Donna R. Cryer, JD
President & CEO
Global Liver Institute


OPTN New Liver Distribution Policy Request for Comment

OPTN invites public comments on policy and bylaws proposals, Comments on their policy proposal on “expedited placement of livers” are being accepted until March 22, 2019. Check out the OPTN site to review the proposed policy and to record comments.

Survey to Improve the ClinicalTrials.gov Website

The National Library of Medicine (NLM) is working with Health Literacy Media (HLM), a Missouri-based nonprofit organization, to use a survey to learn how to improve educational information about clinical trials on the ClinicalTrials.gov website. To take the 15 minute survey, click this link by March 8th

AASLD/FDA DILI Conference (May 7-8, 2019)

Registration is open for the AASLD and FDA sponsored drug-induced liver injury (DILI) conference in Hyattsville, MD. All new drugs are evaluated for their effects on the liver.

This event will investigate current methods to assess and evaluate DILI risk in evolving therapies. Submit your abstracts: the deadline is March 15. A limited number of travel awards will be available. Register - early registration discounts end April 10.



New Director of Policy starts at GLI

GLI welcomes Andrew Scott as Policy Director. Focusing on issues of concern to liver patients and the liver community, Andrew undertakes proactive legislative and regulatory initiatives, which prioritize patient first care. He is a consensus builder and able to integrate multiple perspectives, while presenting parties with creative strategies that meet patient interests and other stakeholder objectives.

Andrew built a strong foundation in policy, marketing, stakeholder engagement/advocacy, government affairs, and pharmaceuticals as an integral part of Cullari Communications Global, and the Endo Pharmaceuticals Government Affairs team. A California native, Andrew is a graduate of Johns Hopkins University with a major in public health.

Apply for GLI’s Advanced Advocacy Academy (A3) Class of 2019

Applications for GLI’s Advanced Advocacy Academy (A3) Class of 2019 are now open! A3 2019 will offer liver patients, caregivers, and professionals the opportunity to learn from experts in the fields of drug development, state and federal legislation, media and communications, and liver health and disease. If you or someone you know is interested in attending, visit the A3 website to learn more and to apply.

GLI Submits Two Letters that Protect Liver Health Patients

This past month GLI submitted two letters to the Centers for Disease Control and Prevention (CDC), and the Centers for Medicare and Medicaid Services (CMS).

CDC Letter:

In GLI and the NASH Council’s letter to the Centers for Disease Control and Prevention, we expressed concern with the current ICD-10-CM coding, specifically, that the current ICD-10-CM coding structure exists solely for hepatic fibrosis and cirrhosis, but does not distinguish patients with different stages of fibrosis. Revisions to the coding are necessary to enable liver fibrosis to be classified more accurately and more consistently with current clinical perspectives and documentation, particularly in the context of nonalcoholic steatohepatitis (NASH).

CMS Letter:

Along with other like-minded patient organizations, GLI has signed on to a letter prepared for CMS with the goal of drawing attention to the nation’s massive transplant waiting list and low organ recovery numbers. There are currently 115,000 people on the waiting list for organ transplants in the United States, and hundreds of thousands more who are likely to need transplants in the near future. A positive initial step to remedy this issue is for CMS to substitute the metrics by which Organ Procurement Organizations are evaluated for a new verifiable metric that is not open to self-reported interpretation. By making this change we expect an increase in the number of organs recovered and a  decrease in the number of patients waitlisted. See first article under National News below. Note: at newsletter publication, the letter had not yet been finalized and sent. GLI will share it when it is sent.


Washington Post Continues Series on Organ Transplant System:

  • Dr. Joshua Mezrich, associate professor of surgery at the University of Wisconsin School of Medicine and Public Health, provided his view to the Washington Post about issues with the metrics used to decide which patients receive transplants.

  • Currently each patient is listed on the transplant waitlist by name, age, weight, diagnosis and MELD score.

  • What is the MELD score?

    • The MELD score is a number, based entirely on lab values, that predicts how bad a liver is and correlates with how likely the patient is to die waiting for a transplant.

    • A score of 15 is where transplant surgeons start to consider transplantation, and 40 means a 90 percent chance of dying within three months.

    • MELD doesn’t account for age, suffering, hospital admissions, cause of liver failure or potential to overcome that cause after transplant.  

  • In addition to the MELD-based allocation system, livers are allocated based on where the transplant center is to reduce travel times for organs and to incentivize local procurement.

  • Dr. Mezrich believes that a better liver transplant system would favor patients with primary liver disease, who represent only about 10 percent to 15 percent. The rest could then be allocated based on the MELD system, regardless of distances. Read more about Dr. Mezrich and this issue in The Washington Post article.

Report Focuses Concern on the Future of Rural Hospitals

  • According to a recent Navigant report, an estimated 430 rural hospitals - roughly 1 in 5 - are in danger of closing unless their financial outlooks improve.

  • Dozens of rural hospitals have already closed nationwide this decade. About two-thirds of rural hospitals now at high risk of shuttering are considered essential to their localities for several reasons: They serve vulnerable populations, are geographically isolated and employ a sizeable share of residents.


The Administration

The Administration Unveils Proposed rule to Change Drug-Rebate System

  • On January 31st HHS proposed a rule that would upend the rebate system. It would ban rebates tied to a percentage of list price that drug makers pay to Medicare Part D plans, Medicaid managed care, and pharmacy benefit managers by taking away the long-standing exemption for rebates in anti-kickback law.

  • Critics of the proposed rule point out that it would raise premiums and likely increase government spending. However, the proposed rule repeatedly states that its effects are uncertain and depend on the behavior of drug makers, insurers and pharmacy benefit managers.

  • Though the policy’s stated goal is to lower out-of-pocket costs for consumers and reduce government spending, the CMS Actuary predicted that most beneficiaries would pay more overall.

  • How this could impact you:

    • Seniors with high drug costs would get the most benefit, but monthly premiums would increase an estimated $3 to $5.

    • The Administration estimated that 30 percent of Part D beneficiaries would have high enough drug costs that their savings from the rule would outweigh their premium increases.

The United States Congress

Bipartisan Living Donor Protection Act to Protect Organ Donors

  • The Living Donor Protection Act would protect living organ donors and promote organ donation in three ways:

    • Prohibits life, disability, and long term care insurance companies from denying or limiting coverage and from charging higher premiums for living organ donors

    • Amends the Family and Medical Leave Act of 1993 to specifically include living organ donation as a serious health condition for private and civil service employees

    • Directs HHS to update their materials on live organ donation to reflect these new protections and encourage more individuals to consider donating an organ

  • The bill has support from numerous groups that advocate on behalf of organ transplantation, including endorsements by American Association of Kidney Patients, American Society of Transplant Surgeons, American Society of Transplantation, National Kidney Foundation, American Society of Nephrology,  and Renal Physicians Association.

  • To learn more, click here.

 Senate Finance Committee Investigates Insulin Price Increases

  • Bipartisan Senate Finance Committee leaders launched a probe on February 22nd into the rising cost of insulin, requesting information from drugmakers Eli Lilly, Novo Nordisk and Sanofi.

  • This probe was timed to come ahead of the full committee hearing on Tuesday February 26, in which seven drug industry executives, including Sanofi's CEO, testified on drug pricing.

  • The letters asked the following questions:

    • How do you determine list and net prices of the medicines?

    • Where are your medicines are placed on Part D formularies?

    • How do rebates to pharmacy benefit managers affect this placement?

    • How much do you spend on research and development, production, marketing and advertising of insulin?

    • What are your revenues and gross margins from the drug?

    • Also how does your company fund patient assistance programs?

  • To learn more, click here.

  • Note: At newletter publication, Lilly announced it would offer a half-priced version of its top-selling insulin.

Legislation Would Permit ACA Subsidies To Buy Into Medicare

  • This past month new legislation was unveiled that would enable any American between 50-64 to purchase the same benefits given to an individual enrolled in Medicare, including Parts A, B, and D, as well as the ability to enroll in a Medicare Advantage plan.

  • This age group would also be eligible for the same tax credits and cost-sharing subsidies that they would receive if they were enrolled in an ACA health insurance plan.

    • Rather than a mandatory, Medicare for All type-proposal, a Medicare Buy-In would be optional under most proposals and only allow older Americans coming up on Medicare eligibility -- ages 50-64 or 55-64, depending on the proposal -- to buy into the Medicare program.

  • To learn more, click here.

  • How this could impact you:

    • Proponents of the legislation say that it would help many older and pre-retirement Americans, who tend to have more health care needs, obtain affordable care and also would provide cheaper insurance for younger, healthier people on the exchanges. But, industry groups, including hospitals and insurers, oppose the concept and warn that it could negatively affect physician payments and the Medicare Trust Fund.

Capitol Hill hearing on “Strengthening our Healthcare System: Legislation to Reverse ACA Sabotage and Ensure Pre-Existing Conditions Protections”

  • On Wednesday, February 13th, the Subcommittee on Health of the Committee on Energy and Commerce held a legislative hearing focused on the recent changes to the Affordable Care Act.

  • The bills discussed during the hearing included:

    • H.R. 986, the “Protecting Americans with Preexisting Conditions Act of 2019”, would require the Trump Administration to rescind Section 1332 guidance of the ACA promulgated in October of 2018;

    • H.R. 987, the “Marketing and Outreach Restoration to Empower Health Education Act of 2019” or the “MORE Health Education Act,” will restore outreach and enrollment funding to assist consumers in signing up for health care, which has been slashed by the Trump Administration; and

    • H.R. 1010, To provide that the rule entitled “Short-Term, Limited Duration Insurance” shall have no force or effect, will reverse the Trump Administration’s expansion of short-term, limited-duration insurance plans.

    • H.R.  1143, the “Educating Consumers on the Risks of Short-Term Plans Act of 2019,” would require short-term, limited duration insurance (STLDI) to disclose the risks of STLDI to prospective consumers, including disclosure that STLDI may not cover preexisting conditions, may not cover the costs of medical services, and that coverage may be rescinded if the individual seeks treatment for a preexisting condition.

  • Now that Democrats control the House of Representatives, they are eager to question GOP changes to the ACA, even if their legislation will likely stall in the Republican Senate.

  • To learn more, click here.

  • How this could impact you:

  • GLI will actively monitor any updates or changes to the ACA.

    • A top priority GLI is to protect pre-existing condition coverage within the ACA.

Department of Health and Human Services (HHS)

HHS Secretary Alex Azar Makes Conflicting Remarks about Step Therapy

  • This past month during the American Medical Association’s Advocacy Conference in Washington, Secretary Alex Azar said HHS is exploring a crack down on a practice insurance plans use to make a patient start over on step therapy if they switch plans.

  • However, his comments come as HHS is proposing to permit Medicare Advantage plans to apply step therapy and prior authorization to drugs sold in Medicare Part B and Part D.

  • Despite his concerns about insurers making patients retry failed drugs when they switch plans, Azar defended the use of step therapy in the six protected classes.

  • To learn more, read Secretary Azar’s full speech here.

  • How this could impact you:

    • GLI stands with many other patient advocacy organizations that oppose the use of step therapy.

    • Step therapy can be a tool that hinders patient access.

National Institutes Of Health (NIH)

New NIH Clinical trial to track the outcomes of HIV Liver transplantation

  • This past month NIH approved a clinical trial to track outcomes of liver transplantation from HIV-positive donors to HIV-positive recipients.

  • This is the first large-scale clinical trial to study liver transplantation between people with HIV at U.S. clinical centers.

  • While organ transplants between donors and recipients with HIV have been successfully completed in South Africa since 2008, such transplants were illegal in the United States until the passage of the HIV Organ Policy Equity (HOPE) Act in 2013.

  • The new study will track the clinical outcomes of 80 liver transplants. All transplant recipients in the study will be living with HIV; 40 of them will receive livers from deceased donors who had HIV, and 40 will receive livers from HIV-negative deceased donors serving as the control group.

  • To learn more, click here.

 Centers for Medicare and Medicaid Services (CMS)

HIV Patients Join Other Patient Organizations in Disapproval of CMS Proposed Rule Change

  • The proposed rule, “Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses,” has the important aim of lowering drug expenditures for higher-cost conditions by increasing negotiating power.

  • However, this proposed rule would weaken the six protected classes to such an extent that the classes could no longer be considered truly “protected.”

  • This past month many HIV patient organizations signed on in support of protecting the 6 protected drug classes.

  • How this could impact you:

    • Last year GLI signed on with other patient advocacy organizations against this CMS proposal.

    • What are the 6 protected classes?

      • The Centers for Medicare and Medicaid Services (CMS) acknowledged that, in some cases, Medicare beneficiaries may need access to more than two different drugs within a therapeutic class.

      • In response to this, CMS identified six “categories and classes of clinical concern,” commonly known as the “six protected classes,” and required Part D plans to cover “all or substantially all drugs” within each of the classes.

      • These six protected classes include: anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals, and immunosuppressants. The antineoplastics category includes many oral chemotherapy drugs.

      • By removing coverage this rule change could have a clear negative impact on liver patients and could promote Step therapy within Medicare Part D.

CMS Details Supplemental Benefits For Chronically Ill Enrollees in 2020

  • On Wednesday January 30th, CMS proposed in a draft call letter how Medicare Advantage (MA) plans could submit new supplemental benefits specifically for chronically ill enrollees in their 2020 bids.

  • In last year’s call letter, CMS began to allow MA plans to offer supplemental benefits, which are benefits not offered under original Medicare, including adult day care, support for caregivers, in-home supports, home safety modifications and more. It did not add services that deal with social determinants of health.

  • In this new draft letter CMS proposed that MA plans will be able to offer separate supplemental benefits (SSBCI) to chronically ill enrollees.

  • In response to the release of this letter, more than 300 House lawmakers signed and sent CMS a letter praising Medicare Advantage.  They also urged the agency to do as much as possible to build on the broader category of supplemental benefits the agency authorized last year and to give MA plans enough time to evaluate and implement substantive program changes.

  • How this could impact you:

  • Chronically ill patients represent a significant population in the liver health space.

    • With this new announcement CMS would define an enrollee as chronically ill if they meet all 3 of the following criteria:

      • Have one or more comorbid and medically complex chronic conditions that are life threatening or significantly limit the overall health or function of the enrollee

      • Have a high risk of hospitalization or other adverse health outcomes

      • Require intensive care coordination



California Legislature Introduces Bill to Expand Medi-Cal Coverage to Low-income Seniors

  • California legislature recently introduced a bill that would expand eligibility for no-cost Medi-Cal to low-income seniors and people with disabilities.

  • CA AB715 (19R) by Assemblyman Joaquin Arambula (D-Kingsburg) would raise the income limit for free Medi-Cal available through the state's "Aged, Blind and Disabled" program to 138 percent of federal poverty level, equal to $16,754 in annual income.


 Maryland Lawmakers Propose a Change to the Individual Mandate

  • MD HB814 (19R) , would require most state residents to have health insurance or pay the same penalty, now repealed by Congress, as the Affordable Care Act required nationwide.

  • But the legislators would add an intriguing way around the fee. Residents who do not have insurance could check a box on their state tax return indicating that they'd like to learn whether they are eligible for a plan that costs less per year than the penalty they'd have to pay. If they check it and then buy insurance on the state exchange during a special open enrollment period, they would be absolved of the penalty. (If they were to refuse, they would pay the penalty, with interest, the following year.)


Kentucky Joins Other States in Targeting PBMs

  • Pharmacy benefit managers (PBMs) took in $123 million more from Kentucky Medicaid plans than they paid to pharmacies that dispensed the drugs, according to a report from the state's health department.

  • The report examined spread pricing — the difference between what a PBM reimburses drugstores and what it charges health plan clients. Critics argue that PBMs are unfairly profiting from the gap, and several states are looking into the issue.

 State Medicaid Expansion and the Governors Association Winter Meeting

  • One of the main discussion points during the Governors Association winter meeting that occured during this past month was Medicaid expansion.

  • Governors continue  to be split largely along party lines over whether to expand Medicaid or block the expansion within their states.

  • However, many eyes are on Utah, and how the Administration will respond to their limited Medicaid expansion plan.

Utah will ask the Trump Administration for permission to implement unprecedented restrictions on the health coverage program for the poor, while insuring about 60,000 fewer people than an expansion under the ACA would have — and initially costing the state tens of millions of dollars more.


Mechanisms of Disparities in Chronic Liver Diseases and Cancer (R21). Funding available from NIH. Application deadlines: April 4th, 2019.

Epidemiologic Research on Emerging Risk Factors and Liver Cancer Susceptibility. Funding available from NIH Application Deadlines: May 7th, 2021.



Congressman Jerrold Nadler (D-10-NY), Chairman of the House Judiciary Committee, Member of the Congressional Diabetes Caucus, Bipartisan Disabilities Caucus, and more. Also Congressman Nadler is the lead sponsor of the Living Donor Protection Act to Protect Organ Donors.


Step Therapy: Step therapy is the practice that requires patients to first try a cheaper drug and then move on to often more expensive treatment options only after the initial treatment fails.