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The MeidasTouch Podcast
Meidas Health, Episode 6: Biden’s Medicare Reformer on Why Trump’s Health Plan Is Smoke and Mirrors
00:33:16
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- [00:01]
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Host Name
Hi again, Midas Mighty. It's great to be with you for episode six. And we have quite the guest for episode six, especially given the times we have former head of cms, the center for Medicare and Medicaid Services, Nikita Brooks Lashore. I am so excited that she's here, especially since, as we talked about in the past, the purpose of this podcast is to profile and platform the nation's best, best healthcare leaders so that you can hear directly from them on issues that matter, especially issues that are dominating the news cycle. So without further ado, I'm going to bring Chiquita on to talk about all things drug pricing and just all the seemingly endless news cycle. But Chiquita, thanks for being here.
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Chiquita Brooks-LaSure
Thank you for having me, Chiquita.
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Host Name
I wanted to dive right in and it wasn't lost on any of our listeners. The big announcement yesterday from the Trump administration on drug pricing. And yet, as you and I were talking about, there's a difference between pursuing these, what I think objectives that we all agree on, lowering drug costs in the US by executive order versus all the amazing work that you did as head of CMS through the inflation reduction action. I was wondering if you could tease that out for us.
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Chiquita Brooks-LaSure
Sure. So let me start by saying how much I think prescription drug cost is one of the biggest issues that we are facing in health care today. I said this often. I felt like a CMS administrator. The issue I heard about the most was people struggling to afford their drugs. And I think that's for two reasons. One, because the number of drugs that people, particularly seniors and people with disabilities are taking really has increased, I would say, over the last, certainly over the last 10 years. So people are more dependent on that. And part of that is because we have incredible drugs that are doing incredible things. But it, we are, we have gotten to the place in this country where so many people are really choosing between affording their drugs, putting food on the table and paying for their housing, and heard so many heartbreaking stories about that. And that's one of the reasons why it was so important to us to tackle prescription drug prices for the Medicare population. And it was something, a priority for President Biden. And we were able to get the Inflation Reduction act, which used to joke had some climate change provisions in there, but really was a healthcare thing, because it changed Medicare prescription drug coverage in these fundamental ways. Some of the ways that we changed it were really about changing the structure. Um, and this year is actually the best benefit for people, and that is that there is, for the first time, a $2,000 cap on prescription drug costs for the Medicare population. And this is huge because, as we all know, prescription drug costs that people are paying out of pocket have really affected. It affected people. And there were seniors who still were paying something like $18,000 a year for their prescription drug costs. So this is a sea change. But part of the way that we were able to pay for that was through negotiating prescription drug prices and in the Medicare program, and it wasn't for all of them. The law really outlined taking the most expensive drugs. And each year, more prescription drugs are added to the list that CMS can negotiate. And last year, CMS negotiated lower cost per 10 of the costliest drugs to the Medicare population. And that year alone, you know, we estimated that in one year, we'll save $1.5 billion for Medicare beneficiaries and then $6 billion overall. So those are just a little bit, you know, at a high level of what the Inflation Reduction act put into law. It still continues. It continues to be the law of the land. Right before I left, we announced the next 15 drugs, and CMS should be negotiating those, you know, as we speak. And so we'll see how the new administration, how the current administration moves forward with that, because it is the law of the land. So then yesterday, there was an executive order, and I would say a couple of things. You know, there are different ways to approach prescription. Lowering prescription drug costs. Every administration has a right to put forth their own vision of what they think should be done. There really wasn't a lot of detail in the executive order yesterday to really know. It doesn't say where we're. Where the administration wants to lower costs. It doesn't say the Medicare population doesn't say Medicaid. It doesn't say the commercial market. So, you know, not a lot of specifics about how. What the approach might be. There's an indication of potentially doing rulemaking if drug companies don't come to the table voluntarily. You know, we'll see what the industry says in terms of their response to the executive order. But I would say you know, two things. One, again, the law of the land says that Medicare should be negotiating and we'll see does the administration move forward with implementing the law? And it will be a process, right. Of, of how they approach it, but this is important to seniors. And then secondly, you know, there isn't enough detail in what was announced yesterday to, I say, I think to really have a perspective on whether or not it's going to be effective or whether we'll see any changes to prescription drug prices.
- [06:52]
Host Name
Maybe if we start. Thank you. Do we start when you were thinking about the program? And it probably would surprise a lot of listeners to realize that what you innovated on pioneered and successfully passed through Congress negotiating drug prices with manufacturers for some of the most commonly used but high cost drugs for Medicare beneficiaries. I'm a pulmonologist. A lot of the medications on the list, that first 10 are very common medications. Anticoagulants for a patient that might have afib, you know, anti diabetes medications, you name it, very common medications. And yet this was a successful effort for the government with large negotiating power to say, you know what, we'd like to directly have pharmaceutical companies engage with us and figure out what a fair price could be, something that's common in other parts of the world. But up until your leadership, we really haven't seen that here in the US and, and when we talk about high drug costs, you know, anywhere from three to five, we Americans historically have paid anywhere from three to five times higher for branded pharmaceuticals than say, their peers elsewhere in the world. Can you talk about why it's taken so long to do what you did?
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Chiquita Brooks-LaSure
You know, it's so, it's, it's such a good question. Why, why did it take so long? I think that, I think a couple of reasons. I would say healthcare in our country, the government interaction has always been very different than in other countries. Particularly as I talk to other people in other sectors of the world who are in healthcare, they sometimes find our history so puzzling because it's different, but it is uniquely American. And after World War II, our reaction to healthcare, we went very much more private sector than a lot of the rest of the world. So I think prescription drugs came to the Medicare program quite late. I mean, it really was 2003 when Medicare started covering prescription drugs. It wasn't even a written really into the beginning when Medicare was created. And part of that was because prescription drugs were not a significant part of cost in health care in the 60s, but it actually took a, if you Think about it like a really long time for Medicare to actually cover drugs. And I think that often when we're shifting the status quo in healthcare, we see a great deal of resistance. Right? So I mean, covering people in the Affordable Care act, there was a lot of resistance to change, even if people generally wanted, believed in, in health care for people. So I think when it comes to prescription drugs, there's been just a lot of, a lot of status quo. It's very difficult for people to really know about pricing in the program. And we see this a bipartisan basis. There's so much discussion about transparency and putting more transparency into how prescription drug prices are operating. It's extremely complicated and just our arrangements between the sectors are challenging. And so I think it's really easy for one part of the industry to blame the other and say, you know, it's, it's the drug companies, no, it's the PBMs, no, it's the health plans, the pharmacists. You know, there, there's so many parts of, of the chain that it is easy to muddy the water and make it hard to, to tackle the costs. And even in trying to get drug negotiation, there was just a lot of pressure and arguments that we're going to stifle innovation and just all of these, all of these pressure points. But at the end of the day, what I firmly believe is the private sector is wise. It will figure out how to make money one way or another. It may be different than how it was, but the private sector will adjust, it will continue to innovate. But if people can't afford their drugs, it's not going to matter. You know, there are these incredibly life saving things that are coming to market, but if people can't afford them, then, you know, nobody's going to actually be able to get them.
- [11:52]
Host Name
And just to, just to emphasize the point, this has been looked at time and again, why are drug costs in the United States historically, up until again, just what you announced last year, why are they so high? Because we have historically not negotiated drug prices with manufacturers. That's been viewed as one of the leading drivers of high drug costs. That's now changing. And to your credit, Chiquita, and to your earlier point, the Trump administration is continuing this program. They see merit in it. It's apolitical. It just makes good sense. Which is why I wanted to also probe this notion of tackling drug pricing by executive order. Strikes me that you said this in the tip. A lot of details on what is most favored nation status. President Trump's sort of signature. Part of that executive order was that we would pay no more or Americans would pay no more for drugs in part B and part D. Basically any medication you get in an outpatient ambulatory clinic, through an IV or take it home. That he's stipulating that he thought he voluntarily wants pharmaceutical companies to lower their prices. The a most favored nation status benchmark, meaning whatever country is paying the lowest for all medications. And those various programs of Medicare Part D and Part D, we're going to, that's what the United States patient's going to pay or that's what Medicare is going to pay for those, those, those pharmaceuticals. And you know, it's not clear to me if it's, it seems like most favored nation status, in his view, is whoever's paying the least, that's what we're going to pay, which is quite expansive to your point. There's a lot of, you can't just do this by executive order. There's legal challenges, there's powerful lobbying and interest groups that will have a say. There is the concern that we, I think we often hear about R and D and stifling innovation, which we can talk about in a bit. But I did, you know, you pursued a very difficult, vexing problem through legislation, and now it's statutory law. And courts historically are loathe to overturn statutes that are passed by Congress when Congress has spoken, versus an executive order, which I think we've seen historically, especially in President Trump's first term on this issue. These do not stand the test of time and they're easily parried. Curious your reaction when you saw what happened yesterday versus the hard work of actually doing or passing the drug pricing efforts through the Inflation Reduction Act. Just the, this, the level of seriousness, the level of effort that goes into one versus the other.
- [14:43]
Chiquita Brooks-LaSure
Well, just to say it, it requires a lot of effort to pass legislation and it requires even more effort to make that legislation come to life. And, and part of that is because when you are, when you're tackling something of this magnitude in this size, you really have to take in what everyone, everyone's point of view and really make sure you have a good grasp of how's the industry going to react, how are we going to make this happen? I mean, they're just, there's so many steps to figuring out how to make sure your great idea actually translates into when someone shows up at the pharmacy, they actually get the drug. And so the, the process of hammering out all of those things is passing legislation, making the compromises that need to happen to get it through. And certainly in implementation hearing, there are always things that no matter how smart you are, how knowledgeable you are, that you have to, you have to hear perspectives. And during my time, I met with so many executives and of course, not just me, just the team, spent so much time hearing with all sorts of people across the chain to really figure out how do we make this happen? And again, like, things pop up where you realize, oh, I didn't know this about the supply chain because nobody ever did this before in the Medicare program. And, you know, I, I think the, there is a frustration on a bipartisan basis that other countries seem to get way lower prices than we do on prescription drugs. They also have different systems. I was talking to a group of people from another country who are all health executives, and I said, do you know what PBMs are? And they did not know what PBMs are. Like, we, we do things a little differently here. And so that's not to say that we shouldn't care what other, what other countries are getting. It's just to say that there is a lot of work that needs to be done to figure out how we can deliver lower prices to our, the people in our country. And it may be possible to just take prices from others, but it may not. We have a certain size population. Other countries have different populations. They, there's so many things that go along with why, why countries get certain discounts. And a big part of that is also access, right? Like what does it mean? And rightfully so. I mean, one of the biggest things we heard from companies is, you know, if I'm giving you a discount, I want to make sure people actually can get my drug. And so that's just one example of, one of the important factors in, when you're negotiating, of making sure you've thought through just all of the dynamics and in order to reach your goal, which is deliver lower costs.
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Host Name
And I think it's, I'm glad you said that. And I think it's really important to, you know, as, as we think about what happens over the next six months. So the executive order essentially says that the president would like to see voluntary compliance with, with the request to lower prices to some benchmark, this most favored nation status benchmark. We're going to pay as, as little as the country that's paying the least for all the drugs in the Medicare program. Pretty expansive ask, I think pretty unprecedented ask. And I'll say for my own, my own two cents here is that the Likelihood that there's voluntary compliance from pharmaceutical companies to meet that expectation is probably low. And that we shouldn't be surprised if we don't see a lot of voluntary compliance, if any compliance in 6 months or 180 days when then there's the ability to do rulemaking as you pointed out. But then what happens at 180 days is an effort to try to either pass legislation or do rulemaking through an agency. And legislation is hard, but they have the majority, so we'll see. Rulemaking, an agency based approach by itself seems fraught with potential challenges and reversals. And so what you've done just to emphasize it to listeners, because I think sometimes I've had this conversation with your former Director of Medicare, Dr. Mina Seshamani, who is just on the episode prior to um, you guys made quite the team. But you know, sometimes I think it gets lost just in the, in the noise of the news cycle how significant your leadership was to or and remains to do Medicare drug negotiations on the 10 most commonly or 10 of the most commonly used drugs amongst Medicare beneficiaries, which also happen to be some of the most costly. That is a big deal and that is the hard work of passing a law through Congress. And you know, I say this as a clinician Chiquita, seeing the news cycle yesterday, it is very confusing to people that are not rooted as experts. And as your top official in the, in the Biden administration, you live and breathe the policy elements of this. You can, you can understand what's real from what's not real. I'm not so sure that the ways in which the headlines were capturing, you know, live the news conference that this wasn't viewed as something that it isn't, which is a marketing campaign in my opinion, not actual substance, I. E. The hard work that, that you guys drove. But that's just my, my two cents. My opinion that I will not we're not going to see voluntary compliance in 180 days from pharmaceutical companies. And then the hard work of actually passing something either through Congress or augmenting what you' or trying to do rulemaking through an agency begins. And you know, that's fraught with the usual challenges.
- [21:13]
Chiquita Brooks-LaSure
Well, you know, and, and House Republicans have put out a bill that has a lot of health care in it and there is nothing on most favored nation in that bill. And I think if they were serious about drug pricing and changing prescription drugs, I mean it's, they're putting it looks like about a trillion dollars of cuts to Medicaid and the Affordable Care act coverage. And if they wanted, as I said, to tackle prescription drugs, that's a perfect opportunity as you're passing healthcare legislation, to put some proposals to the test.
- [21:53]
Host Name
Can I, you know, mindful of your time here and we always try to keep these sort of stackable to 20 to 30 minutes. Shaquita, I wanted to get your thoughts just as we wrap up on the Make America Healthy Again agenda. As somebody that you know and I think you as a, as a top leader in healthcare policy circles, me as just a clinician that's seeing how people, there's more patients across the country or consumers that take a supplement than take prescription medications. And I think we all just want the right thing to be done for disease prevention, wellness, longevity that spans the political spectrum. What worries me, and I'm curious your thoughts is it feels like what I've seen of the Make America Healthy Again agenda is it's certainly an effective messaging and branding campaign. But when you look at the details, there is a focus on, and I like the focus on removing ultra processed foods. Great. We're messaging on that. There's a focus on disease prevention, whatever that means. It means a lot of different things. A focus on sort of healthy living and exercise, things that I know the current health secretary talks about a lot and does videos on. But it doesn't strike me that any of those things are new or novel talking points. And during your tenure you talked a lot about all of that. Bob Califf at FDA talked a lot about that. It strikes me that every other health secretary, both Democrat and Republican, Scott McClellan, others have talked about this. So I'm curious your view on the novelty of Maha as a, as, as an, as an idea, as a brand versus as substance. And are you seeing anything that feels novel and new that, that strikes you as, oh gosh, I wish we had thought about that?
- [23:52]
Chiquita Brooks-LaSure
Well, I would say you know exactly what you said, that there are, there is a lot that is resonating because it's true that there are many things that we all can do to take control of our own health and, and things that we want not as you said, I think the processed food is one that we as a country are really grappling with and it is having significant health impacts. Food is medicine, you know, from former first lady Michelle Obama to certainly the Biden Harris administration, really focused on trying to think more broadly about health. I would say that what concerns me the most is some of the fundamental things that government needs to do in the HHS reorg and eliminating of so many of our federal workers, we are in danger of seeing really serious public health outcomes occur that the government needs to be monitoring. And we just got out of a pandemic, thank goodness. Right. But there are other things coming down the pike. There is an important, an important role for our public health agencies to make sure they're tracking. I think we are. When we talked at the beginning about innovation and when we think about the NIH grants and so many of the other changes to funding, I am deeply worried about our, our scientists, our clinicians who are doing research across this world, not just the country, but across this world, and what that impact is going to be for our health overall. So I would say, you know, some of the things that are being proposed, no issue with them, very supportive, but we don't want to do the nice to have or good idea and forget the essential necessary, you know, and we're seeing just some of the beginnings of that with the measles. And, but it's, it's again, I, when I think of the pipeline, just talking to people in cancer research, what we're seeing in our clinical trials, I am very worried for that aspect of our future.
- [26:34]
Host Name
And to put a fine point on that. And Chiquita, thanks for bringing that up, you're referencing cuts to fundamental research or biomedical research grants across the country, major research centers here. There was actually a major study in jama, Journal of the American Medical association, published on Thursday this past week, highlighting $1.2 billion and cuts to NIH research grants, $560 million of which had already been delegated and now is being clawed back. And to your point, this is for phase 3 clinical trials for the next chemotherapeutic agent that, you know, whether, regardless of your political affiliation, that's something you want available should you or a loved one needed sometime in the future. And, and I, and I, I'm glad we're closing on this because I, some of these, some of these impacts, we're seeing measles and the ways in which measles is being messaged on soft messaging on the purpose of measles vaccination in some cases from some of our senior leaders. But then to your point, we're not going to necessarily see the impacts of a pipeline that isn't as robust maybe for a few years, if not five or 10 years. And, and it's important to keep that in mind that the impacts here are not just near term, but we're going to see the long term impacts here. In terms of brain drain, we saw we talked to our listeners about this a few episodes ago that 75% of 1600 scientists surveyed by Nature, the scientific journal back in February, in light of everything that's happening, said they're seriously considering leaving the country. And these are not two way doors. Once this, once people leave, it's hard to get them to come back and trust that things are going to be okay. And so Chiquita, I just wanted to say thank you for first bringing that up towards the end because I think that's something that we don't talk enough about the medium to long term impacts of what's happening today. Some of these impacts will not be seen immediately and I wanted to give you the floor for any final comments.
- [28:42]
Chiquita Brooks-LaSure
Well, thank you for this conversation. I think it's quite timely and I would just say that I think really focusing on the changes that are coming that the Congress is considering, we really need to put it in context. We left the Biden administration having the lowest uninsured rate in our U.S. history. We had reached record levels of enrollment and people in strengthening the Medicaid program and then lowering prescription drug costs, which has really changed people's lives and just really hope that we continue to see that progress forward because affordable drugs, this is, this is the among one of the most important healthcare issues facing our nation.
- [29:35]
Host Name
Chiquita, thank you. I couldn't agree more and I hope you'll come back. I suspect that we're going to need your expertise often, so please come back.
- [29:44]
Chiquita Brooks-LaSure
Thank you so much. It's a pleasure.
- [29:46]
Host Name
Love this video.
- [29:47]
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