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Masschusetts Wants to Limit Drugs Medicaid Buys; Will Big Pharma Let Trump Approve?

Dusty Johnson says he doesn’t want food stamps to pay for pop. If he can justify limiting SNAP payments to more necessary beverages, would he support limiting Medicaid payments to more medically necessary drugs?

Massachusetts is spending 40% of its state budget on Medicaid and the Children’s Health Insurance Program. Massachusetts would like to bring that spending down by excluding some drugs from Medicaid coverage:

Currently, state Medicaid programs are required to cover almost all drugs that have received Food and Drug Administration approval, including multiple drugs from different manufacturers used for the same purpose and in the same category. In exchange, manufacturers must discount those drugs — typically based on a set percentage of the list price, specified by federal law. The idea is Medicaid’s vulnerable beneficiaries get medications they need and the state doesn’t go broke paying for them.

As drug prices soar, states say, those fractional rebates no longer suffice to defray the burden of rising costs.

…State officials contend that the current Medicaid rebate system may encourage drug price inflation, since a set percentage of a higher price yields a greater profit. Also, the legal requirement to cover most prescriptions leaves little wiggle room to negotiate a better price.

So, Massachusetts wants to go a different route, requesting a federal exemption known as a Section 1115 waiver, which is meant to let states test ways of improving Medicaid. It wants to pick which drugs it covers based on most beneficiaries’ medical needs and which medicines demonstrate the highest rates of cost effectiveness.

It says it will be able to negotiate better prices as a result, saving public dollars while maintaining patients’ access to needed therapies [Shefali Luthra, “Massachusetts Grabs Spotlight by Proposing New Twist on Medicaid Drug Coverage,” Kaiser Health News, 2017.11.21].

The savings, says the MassHealth Section 1115 waiver request, would come from buying fewer drugs in greater volume: “For each therapeutic class, the sate could offer manufacturers an essentially guaranteed volume in exchange for a larger rebate” [p. 8]. The waiver request also notes that Medicare Part D and commercial plans have adopted similar “closed formularies.”

MassHealth filed this waiver request last September. The Trump Administration has yet to say yea or nay. What might stop Trump’s HHS from approving this state experiment in cutting health care costs? Well, as surely as our Coca-Cola bottlers will protest Dusty’s SNAP-can’t-buy-pop plan, Trump’s pals in Big Pharma will protest any limits on government spending on their products:

The federal government has sent mixed messages on whether or not it’ll approve Massachusetts’ waiver. [CMS chief Seema] Verma has promised to give states more flexibility than was granted under the Obama administration. But some observers think it’s unlikely she’ll approve this waiver in its current form, arguing that the Trump administration is friendlier to pharmaceutical interests. Alex Azar, the current Health and Human Services secretary, is a former pharma executive [Mattie Quinn, “States Want Control over Drug Prices. Will the Feds Give It to Them?Governing, 2017.05.05].

MassHealth’s request for a closed drug formulary tests whether the Trump Administration means what it says about flexibility for states or whether their bottom line is still the corporate bottom line.

14 Comments

  1. Roger Cornelius 2018-05-08 09:42

    One thing about Trump, even in his chaos, he has become predictable.
    After the Parkland murders Trump tried giving the NRA some tough love and told us how he was going to take them on. On Friday he was making love to the NRA in Dallas with a babbling and incoherent speech.
    Trump taking on big pharma is nothing more then his fake saber rattling..

  2. Donald Pay 2018-05-08 09:58

    From the NY Times article sited by Jason: “…During the presidential campaign, Mr. Trump embraced positions on this issue long held by Democrats — and long opposed by his party and the pharmaceutical industry. He said, for example, that Medicare officials should negotiate prices with drug manufacturers, and that consumers should be allowed to import prescription drugs from Canada and certain other countries where brand-name drug prices are generally lower than in the United States….”

    Roger has the general idea from several movies we’ve all seen before. Trump will propose something, probably with a lot of fanfare. The Republicans will slow walk the proposal. Trump won’t push it. It will be dead by Labor Day, just in time for Republicans to rake in more money from the swamp.

    If Democrats turn over the House and Senate, some watered down do-nothing measure may have a chance for passage in a lame duck session after the election.

  3. Jason 2018-05-08 12:29

    3 Democrats did the industry’s bidding last night.

    https://www.huffingtonpost.com/entry/democrats-rush-to-prove-trump-right-on-big-pharma_us_5877edd4e4b0b3c7a7b05c29

    From 1998-2012, pharmaceutical companies and health products have led the political lobbying charge in the US by spending over $2 billion over the period. Their total lobbying spend in 2011 alone was $241,481,544.

    Right now it about an even split between Repubs and Dems.

    http://www.drugsdb.com/blog/big-pharma-political-contributions.html

  4. Roger Cornelius 2018-05-08 12:43

    Huffington Post article is old news, the article is dated 01/13/17.

  5. Jason 2018-05-08 12:53

    Tell us what has changed since then Roger?

    I bet you won’t.

    BTW, that should say 13.

  6. Porter Lansing 2018-05-08 13:09

    Good catch, Roger. Jason/KM’s links aren’t even worth reading (for me) anymore. He/She continually makes errors and then wants someone else to “Explain to me where I’m wrong.”
    Provide the blog with worthwhile material. Your cred is shred!!

  7. Roger Cornelius 2018-05-08 13:19

    Porter,
    Thanks, if you ever noticed I never provide any links, I have nothing against others that do it, but if someone wants to challenge “my opinion” they can google to disprove me.
    Also, I never plagiarize the work of authors, they deserve to be given credit for their work, forgetting to use ‘quote’ marks is no excuse.

  8. Jason 2018-05-08 21:28

    Cory and the rest of the Democrats.

    Are you going to back Trump’s push for lower drug prices?

    Are you willing to call your Democrat Representatives to ask them to back Trump?

  9. Roger Cornelius 2018-05-08 21:35

    Trump is all talk, he’ll never push back against big pharma.
    Calling Noem, Rounds, and Thune is a waste of time, they already sold out to big pharma.

  10. Jason 2018-05-08 21:39

    Roger,

    13 Democrats sold out to big pharma. That’s a stone cold Senate vote fact.

  11. Roger Cornelius 2018-05-08 21:46

    It must be an absolute fact that no republicans, including Trump, did not sell out to big pharma.

  12. Roger Cornelius 2018-05-08 22:47

    Listen up nitwit, why do you find it necessary to insert yourself in my comment, it had nothing to do with you, you aren’t that relevant.

    My comment remains the same, “It must be an absolute fact that no republicans, including Trump, did not sell out to big pharma”.

    There, the comment didn’t have anything to do with you, it is a comment.

    Don’t claim any kind of false victory because of your lack of reading comprehension skills.

    What the hell, are you in the 4th grade?

  13. Jason 2018-05-08 23:02

    Roger,

    I am smarter than you. Just because you can’t understand it is not my problem.

    I do feel sorry for you.

Comments are closed.