With 71% of voters citing it as their foremost concern, healthcare was among the most pivotal issues of the 2018 midterm elections. But with a divided Congress—the Democrats in control of the House and the Republicans in control of the Senate—meaningful healthcare reform remains elusive despite being a top priority for both parties.

That said, both the legislative and executive branches seem particularly keen on addressing prescription drug prices. In May, President Trump announced, “Today, my administration is launching the most sweeping action in history to lower the price of prescription drugs for the American people.”

While bipartisan legislative action is unlikely, healthcare companies might well see significant regulatory changes from the Trump administration—including the Food and Drug Administration (FDA), the Department of Health and Human Services (HHS), and the Centers for Medicare and Medicaid Services (CMS)—in the months to come. What’s more, the administration will continue to enact pieces of the American Patients First blueprint, which was proposed earlier this year by HHS Secretary Alex Azar.

What follows is a brief rundown of what industry stakeholders can expect in 2019, and how healthcare organizations can prepare to best serve practitioners and their patients in the face of a shifting regulatory landscape.

Capitol Hill

The new chairman of the House Committee on Oversight and Government Reform, Elijah Cummings (D-MD), has voiced concerns about rising pharmaceutical pricing for years. In his new position, Cummings is one of only three committee chairpeople in the House with the authority to issue subpoenas without a committee vote or consultation with the ranking member, Jim Jordan (R-OH). Cummings has already suggested that he is prepared to serve drug companies with subpoenas in order to gain access to data on their research and development costs and direct-to-consumer (DTC) marketing spending.

House Democrats may be able to find common ground on the issue with the President. Should they work together, this unlikely coalition has the potential to enact an aggressive plan to lower costs—assuming Speaker of the House Nancy Pelosi (D-CA) wants to work with President Trump and the President can convince enough Senate Republicans to sign on.

In addition to drug pricing, the Affordable Care Act (ACA) was a ubiquitous topic on the campaign trail during the midterms, and will likely play an important role in a number of 2019 healthcare initiatives. Especially since the Democrats’ victory in the House is at least partially attributable to the party’s commitment to protecting insurance coverage for patients with pre-existing conditions, strengthening the ACA is likely to be a top priority for Speaker Pelosi.

Finally, there may be some work on “Medicare for All” legislation, but with the Republicans still in control of the Senate, such a staunchly progressive agenda—one that is controversial even within the Democratic Party—is unlikely to accumulate much momentum. That said, expect to hear some noise on this front as a number of Democratic Congresspeople position themselves for 2020 presidential runs.

Trump Administration

Unlike Congress, the executive branch has the authority to create (and change) agency regulations. For instance, HHS Secretary Azar recently proposed the American Patients First blueprint, a plan to bring down the cost of prescription drugs through a variety of measures. “Blueprint” has already impacted current healthcare policies in four key ways:

  1. Drug Dashboards: CMS plans to create a drug price dashboard which would publicize details on year-over-year drug pricing. This dashboard would also highlight the manufacturers who have raised their prices.
  2. Ban on Pharmacist Gag Clauses: This bill—passed in September—ends the gag order clauses that prohibited pharmacists from recommending out-of-pocket payment options to reduce patient costs.
  3. Calling Out Drug Manufacturers: A new policy allows the FDA to publicly identify companies that block patients from accessing generic drugs by refusing to provide samples of their branded products to generics manufacturers.
  4. DTC Advertising Changes: This initiative requires drug companies to include the drug list price in all DTC ads for products covered by Medicare and Medicaid. “We are proposing to require American drug companies, for the first time ever, to include in their TV advertising the list price of any drug paid for by Medicare or Medicaid,” said Azar. “Patients deserve to know what a given drug could cost when they’re being told about the benefits and risks it may have. They deserve to know if the drug company has pushed their prices to abusive levels. And they deserve to know this every time they see a drug advertised to them on TV.”

On the same day as Azar’s announcement, PhRMA announced new voluntary DTC policies for pharmaceutical television advertisers, and pledged to disclose the list prices for drugs on a website where contextual details like out-of-pocket costs and financial assistance could also be included.

Eli Lilly was among the first drug manufacturers to adopt this approach. In early January, it started running television ads for its injectable diabetes drug, Trulicity, that include a website—lillypricinginfo.com—and a toll-free telephone number through which consumers can access extensive information about drug list prices, out-of-pocket costs, and patient assistance programs. The company has announced plans to extend this approach to price disclosure to its psoriasis drug, Taltz, and its breast cancer drug, Verzenio, by the end of February.

Interestingly, Johnson & Johnson has adopted a more radical approach to price transparency. At the beginning of February, it announced it would deviate from PhRMA’s guidelines by including the list price of its blood thinner, Xarelto, at the end of the drug’s television spots.

And while it’s safe to assume that HHS’ proposed rule will be challenged on first amendment grounds, list price disclosure will very likely be required one way or another. As an industry, pharmaceutical marketers should be aware of what these federal regulations will look like, and work to establish transition plans in order to stay compliant.

Taken together, these “blueprint initiatives” promise to usher in a period of transformation in the healthcare industry. According to Azar, “Change is coming. You can be a part of the solution in bringing market-based, competitive ways of compensating for drugs and lowering patient out-of-pocket costs, or you can put your head in the sand and pretend change is not coming and you’ll get whatever comes at you.”

The contours of these changes will become clearer in July, when the FDA is expected to issue a “major statement” addressing how risk information is incorporated into drug labeling and DTC advertisements.

Finally, CMS is considering implementing an International Pricing Index (IPI) model in the spring. According to the agency, the IPI Model would take effect in spring 2020 and remain operative until the spring of 2025. Over the course of the model, CMS would monitor and evaluate the impact of the model on beneficiary access to drugs, program costs, and the quality of care for beneficiaries.

What Do the Changes Mean for Healthcare Companies?

While congressional initiatives will continue to receive the lion’s share of media attention, changes made by the executive branch will almost certainly be more consequential. Legislation that’s passed in a Democratic House is unlikely to survive a Republican Senate, and many of the bills that have been proposed—though lofty in their ambitions—lack the power to penalize noncompliance.

Regardless of these potential obstacles, it’s evident that the healthcare industry faces a period of considerable unpredictability. As such, healthcare and pharmaceutical companies would do well to watch closely—and develop compliance contingencies—as negotiations in Washington unfold. Only by being proactive about addressing and adapting to these changes will industry leaders be able to continue to provide high-quality services to their patients.

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