Tax benefits for nonprofit hospitals, employer healthcare costs, MDRP final rule, and more

October 1, 2024

Welcome to NPC This Week! We hope you'll join us each week for a look-ahead at the policy, research, and industry conversations that matter to the future of biopharmaceutical innovation. The DMs are open if you have suggestions — and please share with your network. - Michael Pratt and Devon Bortz

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Industry News

Tax Breaks for Nonprofit Hospitals: Nearly 3,000 nonprofit American hospitals received more than $37 billion in federal, state and local tax benefits in 2021, researchers from Texas Christian University and Johns Hopkins Bloomberg School of Public Health found. But the analysis, published in JAMA , showed that the tax benefit is highly concentrated among the largest hospitals with the greatest net incomes - with about half of the total tax benefit accrued to just 7% of the 2,927 nonprofit hospitals examined.

KFF Survey - Low IRA Awareness Among Voters: Most American voters continue to be unaware of the drug pricing provisions of the Inflation Reduction Act, with two-thirds of KFF’s survey respondents saying they are unaware of Medicare drug price negotiation.

Bloomberg - A Free Drug Experiment Bypasses the US Health System’s Secret Fees: “A top California health plan is set to offer one of the world’s biggest-selling drugs for free in a bid to show the medicine can reach Americans affordably without going through the middlemen that typically control its flow,” reports John Tozzi in Bloomberg .

“Blue Shield of California struck an unusual deal to buy a lower-cost version of Humira directly from a manufacturer, bypassing the giant pharmacy benefit managers that normally determine which maker’s drug will go to tens of millions Americans.” Read the full story .

Survey – Employers Expecting Rise in Healthcare Costs: Employers are expecting prescription drug costs to rise by an average of 8% next year, part of a trend of employers’ concern about overall healthcare costs .?

• Go Deeper: NPC has been conducting research relevant to employer decisions in healthcare. Research published in AJMC found that nearly two-thirds of employers with self-funded pharmacy benefits reported current rebate agreements for specialty drugs that include a rebate guarantee, calling into question the financial incentives of individuals recommending PBM contracting strategies.
• A 2024 IQVIA report on the costs of 340B to employers found that drug costs for self-insured employers and their workers were 4.2% higher than they otherwise would have been if the 340B program did not exist due to the loss of manufacturer rebates for drugs purchased through the 340B program. This corresponds to an annual increase of $5.2 billion in the cost of healthcare for self-insured employers and their workers.

ICYMI

CMS Publishes MDRP Rule: CMS published the final rule for the Medicaid Drug Rebate Program (MDRP), including measures to combat drug misclassification and to add identifiers related to the 340B program . The final rule did not include provisions to mandate “best price stacking” or an annual verification survey process.

• NPC Resources: NPC submitted a comment letter to CMS on the proposed rule in 2023 raising concerns with these and other provisions.?

Vertical Integration Stifling Competition, Small PBMs Say: Pink Sheet’s Sarah Karlin-Smith writes on how alternative benefit managers are finding it difficult to compete with vertically integrated health insurance/PBM companies who make the process of switching managers difficult for self-funded employers.

CMS Rule on Prior Authorization Incoming: InsideHealthPolicy’s Christian Robles reports that CMS plans to issue a spring 2025 rule , similar to January 2024’s Health Data, Technology, and Interoperability (HTI-1) rule, on electronic health record interoperability and prior authorization specific to prescription drugs after “overwhelming comments” from stakeholders.

NPC at #FierceBiotechSummit: On September 30th, NPC President and CEO John O'Brien was joined by Christie Bloomquist of Astellas Pharma, Andrew Kaplan of Takeda, and Joy Russell of Genentech, for a panel discussion on navigating the policy landscape during and after an election year.

Mark Your Calendar

October 7: Want to learn more about whether the Accelerated Approval Program is working as intended and how patient-centered research can estimate the program's risks and benefits? Tune in to NPC’s webinar on “Accelerated Approval and Patient Need: The Value of Patient Access” from 2:30 — 3:30 PM ET for an overview of recent research conducted by NPC (in AJMC ) and Johnson & Johnson (in JNCCN ) followed by a panel discussion. Speakers include John O’Brien, President and CEO of NPC, Julie Patterson, Senior Director of Research for NPC, Silas Martin, Head of Access and Policy Research at Johnson & Johnson, Bridget Doherty, Director of Access and Policy Research at Johnson & Johnson, Sue Peschin, President and CEO of the Alliance for Aging Research, Jeff Allen, President and CEO of Friends of Cancer Research, and Annie Kennedy, Chief of Policy, Advocacy, and Patient Engagement at the EveryLife Foundation for Rare Diseases. Register to attend NPC’s webinar here.

October 7: The NPC research team is thrilled to join the Washington Health Economics Symposium in Washington, DC. Join NPC Chief Science Officer Jonathan D. Campbell, PhD, Senior Director of Research Julie Patterson, PharmD, PhD, and Research Manager Hanke Zheng, PhD, MS, for their podium presentation “The Inflation Reduction Act and Drug Development: Early Signals of Impact on Post-Approval Clinical Trials.” Register here .

October 14-17: The NPC team is heading to Las Vegas for AMCP Nexus 2024! On October 15, NPC Chief Strategy Officer Kimberly Westrich will participate in a panel on “What You Need to Know About Copay Accumulators, Maximizers, and Alternative Funding Programs.” The session will take place from 8:30 – 9:45 AM PT and will include a deep dive into the regulation and potential employer implementation of accumulators, maximizers, and AFPs. Register for AMCP Nexus 2024 here.

October 15: The Cancer Support Community’s Cancer Policy Institute invites all to join their October 15th at 2:00 PM ET webinar “Utilization Management Roundtable on Step Therapy.” The roundtable will explore the need for step therapy reform as proposed by the Safe Step Act (H.R. 2630/S. 652). Learn more and register for the CSC webinar here .

October 16-18: The 14th Annual Association for Value-Based Cancer Care (AVBCC) Summit and Educational Program will take place in New York City (and virtually) this year from October 16-18, and NPC President and CEO John O’Brien is taking part in three panel discussions! Dr. O’Brien’s talks will focus on both the current status and the potential impact of the 2024 election on cancer care providers, patients, and the biotech industry at large. Learn more and register to attend the AVBCC Summit here.

October 22: NPC President and CEO John O’Brien will join Greg Daniel of Eli Lilly and Drs. Inma Hernandez and Sean D. Sullivan in an open ISPOR webinar on October 22nd at 10:00 AM ET titled “IRA Part III: Medicare’s Maximum Fair Prices for the First 10 Negotiated Drugs and Anticipated Cost Savings.” The discussion will focus on the Medicare MFPs and their impact on the Medicare Part D prescription drug budget. To learn more and register, visit here .

November 7: At the Galien Forum, NPC President and CEO John O’Brien will join a panel discussion on “BioPharma Pressure Points: PBMs, Pricing, Access, and the Global Supply Chain.” Joining Dr. O’Brien for the conversation: Ariel Katz, Co-Founder and CEO of H1, Daniel Mendelson, CEO of Morgan Health, JPMorgan Chase & Co., Janet Woodcock, Former Principal Deputy Commissioner of the U.S. FDA, and Ezekiel Emanuel, Vice Provost for Global Initiatives at the University of Pennsylvania. Learn more and register to attend the Galien Forum here.

November 18-20: Will you be at the National Alliance Annual Forum in Arlington, VA? If so, be sure to connect with the NPC team! First up, on November 18 from 2:15 – 3:45 PM, NPC Chief Strategy Officer Kimberly Westrich will be leading a PBM Misalignment Initiative workshop. The next day, November 19, from 11:30 AM – 12:25 PM, NPC President and CEO John O’Brien will join a panel discussion on “Unlocking Value: Building Trusted Tools to Assess High-Value Care.” Dr. O’Brien will speak alongside Sarah Emond, EVP & COO of ICER, Shawn Gremminger, President and CEO of the National Alliance of Healthcare Purchaser Coalitions, and Caroline Peterson, Executive Director of the Peterson Center on Healthcare. Learn more and register to attend the National Alliance Annual Forum here.