What Should Pharma Companies Expect From the Biden Administration?

Action (or Inaction) on Final and Proposed Rules

In the last weeks and months of the Trump Administration, the Department of Health and Human Services (HHS) released multiple final rules impacting drug coverage, reimbursement, and health care fraud and abuse. It is our understanding that many, if not all, of those rules have been put “on pause” in terms of actual implementation as new HHS leadership evaluates those rules and how they may or may not align with the policies of the Biden Administration. In addition, some of the rules mentioned below are facing legal challenges in the courts, which could also impact their effectiveness.

Some of the rules with unknown fates include:

• Final Rule related to Medicare electronic prior authorizations;
• Final Rule requiring health centers to pass on discounts on insulin and epinephrine directly to patients;
• Final Rule aimed to speed Medicare reimbursement for “breakthrough” medical devices;
• Final Rule governing rebates to Medicare Part D plans and their pharmacy benefit manager (PBM) agents; and
• Interim Final Rule seeking to tie drug reimbursement to foreign benchmarks (the MFN rule).

Federal Regulation of Drug Price Transparency

While already a hot button issue in at least a dozen states, the Biden Administration could try to garner support for drug price transparency regulation on the Federal level. We suspect that any transparency measures would impact not only drug manufacturers, but PBMs and other “middlemen” as well, and could serve to unify the current patchwork of state laws, many with varying requirements.

Medicare Part D and Reimbursement Reform

There remains interest on both sides of the Congressional aisle in amending the Part D benefit design to eliminate the “donut hole” or coverage gap. The Biden Administration might also support loosening the non-interference clause of the Medicare Modernization Act to allow some direct negotiation of reimbursement for Medicare Part D drugs. While the MFN rule is unlikely to be revived, its possible Congress could deviate from the current Average Sales Price-based reimbursement scheme for certain drugs reimbursed under Medicare Part B.

COVID-19 Repercussions

There could be interest in addressing long-term healthcare costs for patients with “long-COVID” that still have symptoms and health-related issues months after coming down with the virus. These long term and lingering costs pose an issue for patients, insurers, device manufacturers, and perhaps pharmaceutical manufacturers. The Administration could encourage the creation of a “9/11 victims fund”-like pool to pay for lingering COVID related expenses.

Buy America - for Drugs Too!

As we have already seen through Executive Order, the Biden Administration wants to enforce and encourage the federal government and others to buy products manufactured in the United States. This extends to pharmaceuticals and federal government agencies are not permitted to waive Buy America Act/Trade Agreements Act requirements. Under the Biden Administration expect to see federal grants continue to incentivize production of pharmaceuticals in the United States and perhaps prioritizing in the national stockpile pharmaceuticals manufactured in America.

This will certainly be an interesting year for the pharmaceutical industry. Stay tuned!