Digging deeper into the Finance package

A Medicaid makeover: The Senate Finance package includes a whole bunch of Medicaid reforms that will save the federal government $15 billion, as Grassley points out in a new First Opinion for STAT. It’s clear Grassley is proud of the oversight provisions of the bill meant to prevent fraud. One such provision would require the government to regularly audit drug makers’ pricing data — and those audits would “be really, really vital” to preventing another drug maker from overcharging federal programs the way Mylan did with EpiPen, according to Medicaid expert Edwin Park, a professor at Georgetown University. 

But interestingly enough, Grassley neglects to mention the biggest Medicaid-related provision in the bill, which reworks an Obama-era cap on Medicaid rebates.

Under the new provision, drug makers could owe 125% of a drug’s price in rebates (meaning they could end up owing the government money). It’s understandable why Grassley wouldn’t want to brag so loudly about the policy: Drug makers have griped about the provision, and the Senate Finance Committee stopped short of delivering a full repeal of the cap. Both Trump and the congressional Medicaid advisers have called for full repeal, which, according to CBO, would save the government between $15 and $20 billion over 10 years.

Clandestine warfare, biologics v. biosimilars edition: Though the original bill included a provision to boost the amount Medicare pays doctors to administer biosimilar drugs, Sens. Bob Menendez (D-N.J.) and Tom Carper (D-Del.) successfully tucked in an amendment that watered that policy down. The original provision was meant to shore up the floundering biosimilar market, but alas, Menendez and Carper’s amendment capped the add-on payment for docs to the “total payment amount for the reference biologic.” Biosimilar experts disagreed about the ultimate impact of the policy — some said it nullified the policy’s impact entirely, others said it just made it less impactful — but no one on the biosimilar side was happy.