Legal Insights and Perspectives for the Healthcare Industry

We address more than a dozen key proposals from the CMS outpatient prospective payment system (OPPS) and ambulatory surgical center payment systems proposed rule in a recent LawFlash. Chief among them is the agency’s bold new proposal for a broad price transparency program. Other notable proposals include continuing payment reductions for 340B drugs and grandfathered off-campus provider-based departments, both the subject of pending litigation in federal court. CMS is soliciting public input on a multitude of proposals from this rule, and comments are due September 27, 2019. Hospitals will want to carefully assess these changes and consider submitting comments before these proposals become final rules.

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HB 2536 requires pharmaceutical manufacturers to disclose to the Texas Health and Human Services Commission (HHSC) when a drug’s price increases 15% or more compared to the previous year, or 40% or more over three calendar years. The new law also requires annual reporting of detailed price information by manufacturers, pharmacy benefit managers, and health benefit plans, and charges the HHSC with making this information available online to the public.

Clearing the way for consideration by the US House of Representatives, the Ways and Means Committee has unanimously approved bipartisan legislation aimed at increasing drug price transparency by manufacturers and pharmacy benefit managers through enhanced reporting and accountability requirements.

In a rare show of bipartisanship, the House Ways and Means Committee recently approved HR 2113, the Prescription Drug Sunshine, Transparency, Accountability and Reporting Act of 2019 (STAR Act) by a 40-0 vote. The STAR Act is the consolidated product of four House bills aimed at bringing transparency to drug price hikes and high launch prices, required reporting of product samples under the Physician Payments Sunshine Act (Sunshine Act), accountability by pharmaceutical benefits managers (PBMs), and accurate drug price reporting to the Medicare program. Key highlights of the legislative proposal follow below.

While Maryland became the first state in the nation to pass legislation creating a Prescription Drug Affordability Board, it may not be the last. Several other states are exploring similar legislation but legal challenges may follow.