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Weekly Checkup

The Biden Administration’s Plan for Tackling Drug Prices

Earlier this month the Biden Administration released the president’s “Comprehensive Plan for Addressing High Drug Prices.” AAF’s Margaret Barnhorst wrote about the details here, but suffice it to say that both “comprehensive” and “plan” are extraordinarily generous terms to apply to the report. Still, the report itself does provide some useful insights into President Biden’s approach to drug prices and signals to Congress what his priorities are.

In April, President Biden addressed a joint session of Congress, laying out what at the time was being called his American Families Plan, which along with the American Jobs Plan, now serve as the bones of the reconciliation package moving through the House. At the time, I wrote in the Weekly Checkup that Biden’s decision to avoid endorsing specific drug pricing policies—like those included in Speaker Pelosi’s H.R. 3—gave cover to moderate Democrats who opposed extreme progressive drug policies and didn’t want to vote for them. The Biden Administration seems to have recognized this and is pivoting to curtail moderate Democratic opposition to H.R. 3’s policies as their inclusion in the reconciliation package has become increasingly tied to the rest of health policies that Democrats hope to enact.

The report explicitly calls on Congress to pass legislation allowing Medicare to negotiate drug prices, and apply those prices to the private health insurance market, in addition to government programs. The report also gives a nod to legislative efforts to cap beneficiary spending in Medicare Part D, penalize manufacturers that increase their prices faster than inflation, and equalize reimbursement for biologic drugs and biosimilars. But even as the president embraces progressive drug pricing policies, the report is light on details and steers clear of some of the most controversial issues such as reference pricing and the use of “march-in-rights.”

Much of the report is focused on calling for congressional action, but where it does touch on potential administrative actions it is similarly light on details. There are allusions to potential demonstration projects—using the Centers for Medicare and Medicaid Innovation Center—to test outcomes-based drug payments, reducing health disparities, and providing incentives for providers to prescribe “high-value therapies,” among other vague concepts. Overall, the report seems aimed at assuring progressives and the public at large that the president is really very serious about tackling drug prices, but there isn’t much in the way of concrete action or specific details here.

In 2016, then-candidate Trump shook up the drug pricing debate, endorsing a host of progressive policies, such as having Medicare negotiate drug prices and importation of foreign drugs. Ultimately, as president he couldn’t achieve any significant drug pricing reforms, and Democrats rode to power in 2020 at least in part on pledges to tackle drug prices—for real this time. But Democrats, like Republicans, only really agree that “something” should be done and are struggling to unify around a legislative package of reforms. The Biden Administration’s plan might be an effort to help bring lawmakers together, but it just isn’t substantive enough to function as more than fig leaf claim to have tried.

 

Chart Review: Median Costs for a COVID-19 Hospital Stay

Margaret Barnhorst, Health Care Policy Fellow

According to new data analysis from FAIR Health, the median billed charge for a COVID-19 hospital stay with complexities—those involving treatment in the intensive care unit or use of a ventilator— is $208,136. The “billed charge” is the amount that an uninsured patient or a patient in an out-of-network hospital would be charged for such a COVID-19 hospital stay. For patients with health care coverage, however, health insurance plans negotiate an “allowed amount” with in-network providers, which is a discounted price the providers have agreed to accept as full payment from the insurance plan (and the patient if any cost-sharing responsibilities apply). FAIR Health estimates that for private health insurance plans the median allowed amount for an in-network COVID-19 hospitalization with complexities is $70,098. For general COVID-19 hospitalizations without complexities the median billed charge is $54,262, and the estimated allowed amount for in-network private health insurance plans is $25,188.

These estimated allowed amounts for private plans are considerably higher than payout estimates for public insurers; before the recent surge in the Delta variant of COVID-19, various analyses estimated the Medicare fee-for-service for a COVID-19 hospitalization around $20,000. The Kaiser Family Foundation recently used this value to estimate that preventable COVID-19 hospitalizations for unvaccinated adults cost over $5 billion from June to August 2021; the new FAIR Health analysis of private health insurance payouts means this number may be even higher, however.

Source: FAIR Health

 

Tracking COVID-19 Cases and Vaccinations

Jackson Hammond, Health Care Policy Analyst

To track the progress in vaccinations, the Weekly Checkup will compile the most relevant statistics for the week, with the seven-day period ending on the Wednesday of each week.

Week Ending:

New COVID-19 Cases:
7-day average

Newly Fully Vaccinated:
7-Day Average

Daily Deaths:
7-Day Average

22-Sep-21

121,532

237,021

1,556

15-Sep-21

146,684

339,901

1,545

8-Sep-21

143,098

316,337

1,422

1-Sep-21

160,200

382,111

1,483

25-Aug-21

153,919

357,318

1,291

18-Aug-21

142,836

306,498

1,037

11-Aug-21

123,759

244,107

782

4-Aug-21

100,614

216,592

537

28-Jul-21

70,847

209,396

375

21-Jul-21

45,086

227,563

278

14-Jul-21

29,417

248,316

234

7-Jul-21

16,165

244,052

196

30-Jun-21

13,926

324,196

234

23-Jun-21

11,967

409,532

253

16-Jun-21

12,361

630,538

293

9-Jun-21

15,309

734,936

357

2-Jun-21

14,999

527,261

389

26-May-21

22,266

827,381

445

19-May-21

27,909

1,071,181

520

12-May-21

34,875

1,283,711

557

5-May-21

45,476

1,482,285

587

28-Apr-21

52,024

1,518,050

619

21-Apr-21

61,012

1,537,671

632

14-Apr-21

68,635

1,792,705

640

7-Apr-21

64,584

1,618,895

621

31-Mar-21

64,411

1,402,152

702

24-Mar-21

57,294

986,647

737

17-Mar-21

53,668

1,044,186

860

10-Mar-21

54,216

974,733

1,121

3-Mar-21

61,017

933,795

1,357

24-Feb-21

64,931

858,719

1,727

17-Feb-21

73,547

756,240

1,911

10-Feb-21

100,645

714,619

2,358

3-Feb-21

129,501

493,712

2,725

27-Jan-21

159,886

342,174

3,175

Sources: Centers for Disease Control and Prevention Trends in COVID-19 Cases and Deaths in the US, and Trends in COVID-19 Vaccinations in the US.

Note: The U.S. population is 332,770,054

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