Medicaid serves nearly one in five Americans, including many with chronic conditions, and purchases about 10% of total prescription medications dispensed in the U.S.[1] From 2013 to 2016, Medicaid’s nationwide drug spending increased almost 50%, from $22.4 billion to $33.4 billion.[2] Medicaid programs consume an increasing percentage of state budgets and threaten to overtake funding for other programs like education and infrastructure.[3] In 2018, the National Association of State Budget Officers (NASBO) estimated that Medicaid accounted for nearly 30% of total state spending and is the fastest growing component of …

By: Leah S. Gray, Student Fellow Happy March! This month we take a look at articles that examine 1) state health system reform efforts, 2) protections against surprise medical bills, 3) effects of market concentration on cost and quality, and 4) ways to control rising costs for health care and pharmaceuticals.   States are taking the lead in health system reform While the federal health policy debate has remained rather stagnant, states have stepped up protect their citizens from rising health care costs. North Carolina is poised to make rapid, unprecedented …

February has been a busy month for state attorneys general from coast to coast, as AGs from Pennsylvania and California assert their authorities to regulate transactions in the healthcare provider market. On the drug pricing front, we follow up on the latest action in the nationwide litigation against the now infamous generic drug price fixing scheme that, fueled by increased media attention, has rallied state, federal, and private forces across the country.   Pennsylvania AG Sues Payer-Provider for Restrictive Network Access     In an effort to regulate Pennsylvania’s provider and …

By: Leah S. Gray, Student Fellow On his first day as the Governor of California, Gavin Newsom made his first steps towards carrying out his health care campaign promise of universal health care.  Additionally, two parts of his plan look like a direct rebuke of the Trump administration, as Newsom hopes to ensure health coverage for undocumented young people and impose the individual mandate, which Congress attempted to repeal, in California.  He also used his first executive orders to work towards lowering the cost of prescription drugs and to create California’s …

On Thursday, January 31, 2019, the Trump Administration announced a proposed rule to eliminate rebates from drug manufacturers to pharmacy benefit managers (PBMs) in the Medicaid managed care and Medicare Part D programs. The proposed rule accomplishes this aim by removing safe-harbor protection[1] under the federal Anti-Kickback Statute (AKS)[2] for these rebates. In addition, the administration proposed new safe-harbor protections for rebates and other price reductions that will reduce the cost-sharing for patients when they purchase prescriptions and protect some flat PBM service fees (i.e. fees that are not tied …

As California begins its 2019-2020 legislative cycle, we look back at the 2017-2018 bills that will affect California health care costs and markets. Previously, we mentioned that last session’s health care bills coalesced around four themes: targeting high costs of prescription drugs, attempting to implement single payer, regulating competition, and limiting high health costs. In Part 1 of our review, we covered how the legislature banned pharmacy gag clauses and limited out of pocket expenses but failed to implement single payer. This time, we’ll look at 2017-2018 bills that sought …

By: Jake Winton, Student Fellow The times of healthcare, as Nobel laureate Bob Dylan would say – are a changin’.[1]  With annual U.S. health spending quickly approaching $4 trillion[2] and on track to be 20% of GDP[3] by 2026, we are in desperate need of change.  While most of the recent chatter around healthcare spending focused on regulatory reforms or reducing benefits offered by health plans, these discussions neglect one of the most effective levers of change – technology innovation.  Enter Amazon, a customer-centric delivery system that conquers industries by cutting …

Happy 2019! In this New Years issue, we recap the final litigation and enforcement moments of 2018. In antitrust litigation, we look closer at a major developing lawsuit that brings anticompetitive generic drug pricing practices into the national spotlight. Also, two federal appeals courts weighed in on antitrust litigation in the commercial health insurance and pharmaceutical industries, respectively. In enforcement action, we discuss the final mega merger of 2018 and what its approval means for the healthcare market.   Massive Antitrust Lawsuit Keeps Snowballing Toward Judgment Day for Generic Drugmakers …

At the end of 2018, California’s Department of Managed Health Care (DMHC) released the first Prescription Drug Cost Transparency Report covering the cost of prescriptions in 2017.  The legislature directed DMHC to write this report as part of the provisions of SB 17, which was passed by the legislature in 2017.  For more information on SB-17, see The Source’s previous coverage when SB 17 passed, of regulations promulgated by DMHC, and of the lawsuit filed by PhRMA over the law.  In this post, we review the report compiled by DMHC …

After considering 5,617 bills and resolutions, the two year California legislative cycle has come to a conclusion. As health care costs become more scrutinized, more bills than ever have emerged to target these costs. While not all of those bills passed, a significant amount of bills that did pass as well as the notable bills that failed coalesce around four themes: targeting high costs of prescription drugs, working towards a single payer system, regulating competition, and limiting high health costs. This post will focus on the first two themes: high …