A drug price negotiation architect speaks

The ideas and innovators shaping health care

May 30, 2023 View in browser   By Erin Schumaker, Ben Leonard and Carmen Paun THE REGULATORS John Barkett has some thoughts on Medicare drug price negotiation. | Courtesy of John Barkett John Barkett was an architect of the Inflation Reduction Act’s landmark drug pricing provisions, which for the first time tasks Medicare with negotiating lower charges for some drugs. It’s drawn the ire of the pharmaceutical industry, which argues it undermines innovation. Barkett, who served in the Biden administration's Domestic Policy Council as a senior policy adviser and worked on the Affordable Care Act, recently moved to consulting firm Berkeley Research Group’s health care transactions and strategy practice in a senior role, where he’ll advise clients on the impact of health policy. Ben caught up with him to discuss how the Centers for Medicare and Medicaid Services is implementing the law. This interview has been edited for length and clarity.  Pharmaceutical companies have criticized CMS for moving too quickly. What do you think? CMS is striking the balance required to get input when appropriate, but also meet the really tight deadlines the IRA requires. You’ve got a year to set up brand new competency within CMS, hire the people, create the structure, set out the ground rules and analyze the data. And that’s just for the Medicare negotiation parts. If they’re requesting comments in 30 days, that’s because that’s the time they had in order to meet other deadlines. It doesn’t represent any arrogance or disregard of stakeholders. What do you see as the biggest challenges for IRA implementation going forward? It’s a tight time frame and these laws aren’t self-executing. It’s also a complicated feedback environment. They’re using authorities to move quickly. That’s a double-edged sword. It’s good to get feedback but they’re under a microscope. When you were crafting the legislation, what was it like dealing with industry criticism?  It’s not for the faint of heart. The tension was between access and innovation. It was focusing on trying to improve access today while keeping in mind potential effects on innovation. Not every policy in there is one that the pharmaceutical industry doesn’t like. It's not hard to find examples of companies saying that capping what Medicare beneficiaries pay at the pharmacy is going to help more beneficiaries access the drugs. They'll tell Wall Street that is going to lead to higher profits. The industry is critical of Congress’ decision to exclude small-molecule drugs from negotiation for nine years, versus 13 for biologics. What’s your response to that?  If you take the industry at their word, if they’re looking at development, one of the limiting factors on future revenues is how soon a drug might be negotiated. That said, today you get five years of exclusivity for a small molecule drug and 12 years of exclusivity for a biologic. Arguably, those exclusivities have a bigger impact on potential profits than when negotiation occurs. I can't recall ever hearing these arguments made about exclusivities in the past.   DON’T MISS POLITICO’S HEALTH CARE SUMMIT: The Covid-19 pandemic helped spur innovation in health care, from the wide adoption of telemedicine, health apps and online pharmacies to mRNA vaccines. But what will the next health care innovations look like? Join POLITICO on Wednesday June 7 for our Health Care Summit to explore how tech and innovation are transforming care and the challenges ahead for access and delivery in the United States. REGISTER NOW.     WELCOME TO FUTURE PULSE New Harbor, Maine | Sam Oates This is where we explore the ideas and innovators shaping health care. Industry leaders and experts are warning that “mitigating the risk of extinction” from artificial intelligence should be a top priority, like preventing pandemics and nuclear war. Share any thoughts, news, tips and feedback with Ben Leonard at bleonard@politico.com, Ruth Reader at rreader@politico.com, Carmen Paun at cpaun@politico.com or Erin Schumaker at eschumaker@politico.com. Send tips securely through SecureDrop, Signal, Telegram or WhatsApp. Today on our Pulse Check podcast, host Daniel Payne speaks with Alice Miranda Ollstein about her report on an Alabama clinic’s struggle to serve patients in a state with a total abortion ban. Listen to today’s Pulse Check podcast DANGER ZONE A new study paints a bleak picture of kids' mental health. | Seth Wenig/AP Photo It’s common knowledge that kids’ mental health has declined, but new research measures the severity — and it’s bad. Between 2016 and 2022, kids and young adults saw inpatient hospital admissions related to mental health more than double, according to an analysis by the Clarify Health Institute. The hospital admission stats are grim: — Anxiety and “fear-related disorders” spiked 250 percent. — Eating disorders, including those related to an inability to eat, increased 221 percent. — Depression and related ailments went up 96 percent. — Suicide attempts, suicidal ideation and self-harm rose 74 percent. Diagnosis: The pandemic and the measures used to control it appeared to worsen preexisting trends. The researchers also pointed to social media as a potential cause. Response: The researchers said the rise in inpatient care is partly a result of the failures of outpatient providers early on. “The most effective approach to pediatric mental health care likely involves a combination of inpatient and outpatient services, with patients transitioning between levels of care based on their individual needs and the severity of their conditions,” the researchers said. Lawmakers in Washington have zeroed in on social media, but it’s unclear what tangible steps they’ll take.   GET READY FOR GLOBAL TECH DAY: Join POLITICO Live as we launch our first Global Tech Day alongside London Tech Week on Thursday, June 15. Register now for continuing updates and to be a part of this momentous and program-packed day! From the blockchain, to AI, and autonomous vehicles, technology is changing how power is exercised around the world, so who will write the rules? REGISTER HERE.     WASHINGTON WATCH Kaine wants to ensure the military is doing all it can to prevent fentanyl trafficking. | John C. Clark/AP Photo GOP lawmakers have introduced legislation to authorize the bombing of fentanyl labs in Mexico. That’s unacceptable to Democrats on Capitol Hill, but there is support in their caucus for increasing Pentagon involvement in the fight against the deadly synthetic opioid. How so? Tim Kaine (D-Va.) plans to join his Republican colleague Joni Ernst of Iowa in asking fellow senators on the Armed Services Committee to add a provision to the National Defense Authorization Act naming fentanyl trafficking a national security threat, Kaine told POLITICO. The panel plans to consider the bill next month. It would direct the Pentagon to develop a counterdrug strategy. And it would task Defense Secretary Lloyd Austin with seeking more cooperation from the Mexican military. Ernst told POLITICO in an email that the bill is “a real solution to the deadly fentanyl crisis with bipartisan, bicameral support.” Why it matters: Congress has passed a defense authorization bill for 62 consecutive years, so if Kaine and Ernst are successful, their amendment is likely to become law.   Follow us on Twitter Ben Leonard @_BenLeonard_ Ruth Reader @RuthReader Carmen Paun @carmenpaun Erin Schumaker @erinlschumaker   Follow us

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