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Obama Releases FY 2017 Budget: [HHS] drug pricing, PrEP, HCV in HIV+
 
 
  HHS Press Release:
http://www.hhs.gov/sites/default/files/fy2017-budget-factsheet.pdf
 
Budget pdf
 
https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/budget.pdf
 
Obama Releases FY 2017 Budget
 
Includes plans to fight the opioid epidemic, eliminate cancer, and expand Medicaid

 
"the proposed budget addresses the high cost of prescription drugs. Notably, it gives HHS authority to require drug manufacturers to make public their research and development costs, and it reduces the length of exclusivity for brand-name biologic drugs, to 7 years from the current 12. Such strategies aim to increase patient access to generic drugs.
 
Bob Laschewski, president of the right-leaning Health Policy and Strategy Associates, based in Alexandria, Va., said he does not foresee any of the proposed changes happening in the next budget session.
 
"This is an election year. Nothing gets done. They'll just do a momentum budget." President Obama revealed his eighth and final White House budget on Tuesday, sketching out plans for spending priorities in fiscal year 2017. In the healthcare realm, the president's budget included few surprises, but a cut in funding for the CDC left some research and policy advocates dismayed.
 
The $6.98 billion request for the CDC represents a marked decrease from the nearly $7.2 billion the president proposed in FY 2016.
 
CDC's funding also took a $194 million dive, and the FDA's budget for drug review was basically "flat-funded" she said.
 
"We're concerned that we're not providing sustained and predictable funding for the NIH budget."
 
"You always hear people announce the president's budget [in his final year] as dead on arrival. The important thing is that these proposals are on the table, they can pop up over the course of the year in unexpected ways."
 
She noted, however, that improvements in transparency of drug pricing could be implemented in 2016 without legislation. There were also certain proposals, such as changes to the Cadillac tax, that the current Congress might actually legislate, she said.
 
Pearson said she does not expect the incentives for Medicaid to be passed, noting that more spending on the Affordable Care Act is unlikely under this Congress.
 
"Specifically, the nearly $18 billion in Medicare cuts the administration has proposed would severely impede the ability of teaching hospitals to treat the most vulnerable patients with the most complex conditions, illness, and injuries
 
see article in full below
 
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Obama Proposes Drug-Price Curbing Measures, Medicare Advantage Bid Program
 
February 09, 2016
 
https://healthpolicynewsstand.com/content/obama-proposes-drug-price-curbing-measures-medicare-advantage-bid-program
 
The president's 2017 budget proposes a handful of major new CMS policies, including several aimed at reducing drug prices. The budget calls for letting CMS partner with states to negotiate down drug prices, making drug makers disclose discounts and research-and-development costs, requiring drug wholesalers to report wholesale acquisition costs, requiriing evidence development for Part D drugs, creating a Medicare Advantage bidding program, eliminating surprise out-of-network charges in commercial plans, and giving Puerto Rico and other territories $30 billion more in Medicaid funding. The budget also includes health care proposals the administration previewed in the weeks leading up to the budget. Among them are the so-called "moonshot" initiative to cure cancer, a three-year full federal match to states that expand Medicaid, adjustments to the tax on high-cost health plans and an investment in drug-abuse treatment.
 
The budget includes net projected Medicare savings of $419.4 billion over 10 years.
 
"Most notably, the Budget saves $77.2 billion by reforming Medicare Advantage payments to improve efficiency and achieve sustainability of the program," the HHS Budget In Brief states. "Other proposals increase the value of Medicare payments to providers and address the rising costs of pharmaceuticals."
 
The president estimates that Medicaid drug negotiation would save $5.8 billion over a decade. Currently, states are allowed to negotiate supplemental drug rebate, but CMS is not allowed to facilitate negotiation with drug makers. The proposal would allow CMS and state Medicaid programs to partner with a private sector contractor to negotiate supplemental rebates.
 
"That will help them get more leverage than any one state individually," acting CMS Administrator Andy Slavitt said.
 
The budget also proposes that CMS collect wholesale acquisition costs for Medicaid-covered drugs, which the budget states would ensure accurate reporting of average manufacturer prices. This measure is not expected to reduce spending, according to budget documents.
 
The budget also includes a drug "transparency" policy that health insurers have been pushing, and Democrats on the Senate health committee have said they want to include similar disclosure policies in the upper chamber's counterpart to the House-passed 21st Century Cures legislation. Insurers, who are already are subject to medical loss ratios that limit profits and require them to disclose what they spend on benefits and quality improvement programs, say it's only fair that drug companies at least be subject to a similar level of transparency. Drug makers oppose the transparency proposal.
 
"Reported transparency information may provide insight into the price of a drug as compared to the value it brings to the health care system," the budget states.
 
However, the measure is not projected to reduce Medicare spending, Republicans oppose it, and even some people who support measures to control drug prices, such as Institute for Clinical and Economic Review President Steven Pearson, doubt transparency policy will do much to bring down prices.
 
Another drug proposal without budget impact: using coverage with evidence development in Part D. The proposal is modeled in part after the coverage with evidence development process in Parts A and Part B. The policy is designed to allow Medicare to more quickly cover products as CMS collects evidence to determine whether to continue coverage, but many say the agency uses the policy just as often to restrict coverage of expensive products and services. The budget proposal would be aimed at expensive Part D drugs.
 
"For certain identified drugs, manufacturers will be required to undertake further clinical trials and data collection to support use in the Medicare population, and for any relevant subpopulations identified by CMS," the Budget In Brief states. "Part D plans will be able to use this evidence to improve their clinical treatment guidelines and negotiations with manufacturers. The proposal helps to ensure that the coverage and use of new high-cost drugs are based on evidence of effectiveness for specific populations." Drug makers oppose the president's proposals to lower drug prices. Biotechnology Innovation Organization President and CEO Jim Greenwood said the budget includes proposals that run counter to the administration's new initiative to cure cancer.
 
"We oppose cuts or changes to Medicare Parts B and D, which are both working well to ensure patient access to life-changing and life-saving therapies," Greenwood "We should not disrupt these successful programs by making arbitrary changes that will put at risk patient access to necessary medicines."
 
Outside the drug pricing arena, the president's proposed Medicare Advantage bidding program is estimated to cut Medicare spending by $77.2 billion over a decade. The idea is to calculate an adjusted benchmark, against which plans are paid, as the lesser of the current law's fee-for-service benchmark or the average Medicare Advantage plan bid plus a 5 percent "buffer" to protect beneficiary rebates. This would allow CMS to use plan bids to set the benchmark. The budget says the bidding program would reward plans for lowering their bids by allowing them to keep 100 percent of the difference between their bid and the benchmark. The budget also calls for standardizing quality bonus payments across counties by removing the doubling of the quality bonus payment, which is only available in certain areas, and by lifting the cap on benchmarks for plans that are entitled to receive a quality bonus payment.
 
"This proposal prepares for the future of Medicare by reforming Medicare Advantage payments to improve efficiency and sustainability of the program for all Medicare beneficiaries," the Budget In Brief states.
 
However, industry opposes the proposal, Medicare Advantage is popular with seniors, and plans lately have successfully partnered with beneficiaries to help them beat back proposals they dislike.
 
"Millions of seniors depend on Medicare Advantage, yet, the Administration's latest budget proposal would directly undermine the care and programs that are proven to work and improve beneficiaries' health," AHIP President and CEO Marilyn Tavenner said in a prepared statement. "This is not the time to cut Medicare Advantage. It's the time to protect and strengthen it."
 
The budget also includes a transparency measure for health plans. The proposal calls for standardizing billing documents and eliminating surprise out-of-network charges for privately insured patients receiving care at in-network facility. Surprise out-of-network charges occur when patients go to in-network hospitals, but are cared for by out-of-network providers. When this happens, providers charge patients the out-of-network cost sharing and bill them for unpaid balances. The budget proposes requires hospitals and physicians to ensure that patients don't receiving treatment from out-of-network providers when they visit in-network hospitals.
 
"Hospitals would have to take reasonable steps to match individual patients with providers that are considered in-network for their plan," the Budget In Brief states. "Furthermore, all physicians who regularly provide services in hospitals would be required to accept an appropriate in-network rate as payment-in-full. Thus, if the hospital failed to match a patient to an in-network provider, the patient would still be protected from surprise out-of-network charges.
 
The measure has no budget impact. -- John Wilkerson
 
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Obama Releases FY 2017 Budget
 
Feb 9 2016
 
Includes plans to fight the opioid epidemic, eliminate cancer, and expand Medicaid
 
WASHINGTON -- President Obama revealed his eighth and final White House budget on Tuesday, sketching out plans for spending priorities in fiscal year 2017. In the healthcare realm, the president's budget included few surprises, but a cut in funding for the CDC left some research and policy advocates dismayed.
 
The $6.98 billion request for the CDC represents a marked decrease from the nearly $7.2 billion the president proposed in FY 2016.
 
Almost exactly one-quarter of the president's $4.1-trillion proposal for the entire government is destined for the Centers for Medicare and Medicaid Services -- up about $30 billion from FY 2016 -- most of it for the entitlement programs CMS oversees.
 
Approximately $82.8 billion is marked as discretionary funding for the Department of Health and Human Services, according to an HHS press release, in addition to mandatory investments aimed at expanding mental health services, fighting the nation's opioid and heroin epidemic, and accelerating research on cancer and other diseases.
 
The budget also includes $33.1 billion to support biomedical research at the National Institutes of Health, an increase of $825 million over FY 2016 and $5.1 billion for the FDA, $358.3 million more than FY 2016.
 
The plan also introduces new sweeteners for states to expand Medicaid and refinements to the controversial "Cadillac" tax on high-cost employer-sponsored plans.
 
Reforms targeting Medicare, Medicaid, and other health services are estimated to save about $375 billion over the next 10 years, according to a press release from HHS. While a proposal in the president's last year in office is unlikely to pass -- particularly with the opposing party running Congress -- it underscores Obama's vision for the future and may still influence policy in years ahead.
 
Here are a few of the budget's key health-focused elements:
 
• $559 million to continue the initiative to fight the opioid epidemic by expanding the efforts of the Health and Human Services Department and the Department of Justice
 
• $877 million to prevent, detect and reduce the number of deaths from antibiotic resistant bacteria
 
• $755 million to continue the "cancer moonshot" through investments in the National Institutes of Health and the FDA
 
• $500 million in new funding over 2 years to increase the capacity of the behavioral health workforce and improve access to care for those with serious mental illness
 
• $380 million towards the National Health Service Corps to expand the primary care workforce
 
• $300 million for the NIH to continue its Precision Medicine Initiative to hasten research on therapies tailored to individual patients
 
• $195 million for the NIH to continue its BRAIN initiative on neurologic and psychiatric conditions
 
• $20 million for a new pilot program to expand access to pre-exposure prophylaxis (PrEP) for individuals at high risk for HIV infection
 
States that have not expanded their Medicaid programs would be able to have the federal government bear the full cost of expansion for 3 full years, regardless of when expansion occurs. (As the Affordable Care Act now stands, the federal government currently only bears such costs through 2016.) The budget also provides "targeted policies" to help states access lower drug prices using a "Federal-State Medicaid negotiating pool" for high-cost drugs.
 
With regard to the "Cadillac" excise tax, the budget would change the benchmarks for when it would apply: to whichever is higher, the current law threshold or the average premium for a "gold" plan in that state's exchange marketplace. The goal of such a change is to prevent employers from having to bear a higher cost burden solely because they operate in a high-cost region.
 
The new budget continues the multi-year "cancer moonshot" program announced during Obama's State of the Union in January, which increases collaboration of scientists in public and private sectors and significantly expands research on cancer immunotherapies. The program earmarks $680 million for NIH and another $75 million for the FDA in 2017. And the proposed budget addresses the high cost of prescription drugs. Notably, it gives HHS authority to require drug manufacturers to make public their research and development costs, and it reduces the length of exclusivity for brand-name biologic drugs, to 7 years from the current 12. Such strategies aim to increase patient access to generic drugs. In other efforts to make drugs more affordable, the proposal increases discounts for brand-name drugs for seniors trapped in the Medicare coverage gap by raising manufacturer rebates from 50% to 75% in 2018, and aligns rebates for low-income Medicare Part D beneficiaries with those given to Medicaid beneficiaries.
 
It also provides Indian Health Services with $6.6 billion -- $402 million more than the FY 2016 budget -- to reduce health disparities, particularly in the realm of behavioral health.
 
Bob Laschewski, president of the right-leaning Health Policy and Strategy Associates, based in Alexandria, Va., said he does not foresee any of the proposed changes happening in the next budget session.
 
"This is an election year. Nothing gets done. They'll just do a momentum budget." But Edwin Park, JD, of the left-leaning Center on Budget and Policy Priorities, told MedPage Today, "You always hear people announce the president's budget [in his final year] as dead on arrival. The important thing is that these proposals are on the table, they can pop up over the course of the year in unexpected ways."
 
For instance, if a health bill drives up Medicare or Medicaid costs, Congress may look to the budget for offsets.
 
Park added that while his group endorses the proposed 3-year 100% federal match rate for any state that chooses to expand Medicaid at anytime, he said it doesn't seem likely to happen this year.
 
"I think the budget is a helpful starting point for a Democratic agenda" if a Democratic president takes office in 2017, said Caroline Pearson of Avalere Health, based here.
 
She noted, however, that improvements in transparency of drug pricing could be implemented in 2016 without legislation. There were also certain proposals, such as changes to the Cadillac tax, that the current Congress might actually legislate, she said.
 
"Given that the Cadillac tax was already so unpopular and delayed by Congress, this would create some modifications to rationalize it," she said.
 
Pearson said she does not expect the incentives for Medicaid to be passed, noting that more spending on the Affordable Care Act is unlikely under this Congress.
 
Suzanne Ffolkes, of Research!America, a nonprofit focused on public education, said the organization appreciates the recent funding that the president has proposed to battle the Zika virus, she added, "We're concerned that we're not providing sustained and predictable funding for the NIH budget."
 
Once the $1.8 billion in mandatory funding is subtracted, the base budget actually drops to $31.3 billion, which is less than the FY 2016 funding, she explained in an email. CDC's funding also took a $194 million dive, and the FDA's budget for drug review was basically "flat-funded" she said.
 
"We had expected robust increases for all the federal health agencies to maintain the momentum we're seeing from medical research, but that is not evident in the president's budget."
 
The Association of American Medical Colleges was also disappointed with features of the FY 2017 budget, particularly the cuts to fund training at academic medical centers.
 
"Specifically, the nearly $18 billion in Medicare cuts the administration has proposed would severely impede the ability of teaching hospitals to treat the most vulnerable patients with the most complex conditions, illness, and injuries ... Reducing funding to teaching hospitals not only will hinder patient access to services typically unavailable elsewhere but also will limit opportunities for new doctors to train in an environment of discovery, innovation, and cutting edge care that will benefit them no matter where they practice," the association noted in a press release.
 
"The AAMC also is disappointed that the administration's proposed cap on Public Service Loan Forgiveness would all but exclude medical students, overlooking the already vulnerable patients served by physicians working in nonprofit settings."
 
The Republican-led Congress broke with tradition by not inviting Shaun Donovan, the White House Budget director, to present the budget proposal this week.
 
White House spokesperson Josh Earnest told reporters at a press briefing on Monday that Republicans in Congress were "taking a page from Donald Trump's play book and ducking the tough questions."
 
The new budget is not expected to be passed, though Congress may choose to endorse portions of the proposal without agreeing to the entire package.

 
 
 
 
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