Weekend update

Although the Senate got through its appropriations work last week, it turns out the Senate remains in session this week. According to the Washington Times that the Senate Majority Leader Mitch McConnell will keep the Senate open this week to consider 110 pending Presidential nominations. Senators in tight races are bound to hit the trail regardless and the entire Senate will be in town this weekend for Senator McCain's funeral on Saturday.

On the prescription drug front --

• Health Affairs blog reports to no one's surprise that

from January 1, 2011 through December 31, 2016, of total health care spending and per-member-per-month (PMPM) spending on prescription medications for Harvard Pilgrim Health Care (HPHC), a commercial insurer of about one million members in four New England states. Between 2011 and 2016, spending net of rebates by this commercial health plan on outpatient prescription medications, including those administered in physicians’ offices, has increased to a quarter of all health care spending, largely due to increasing prices of specialty medications. 

•  The Wall Street Journal on Saturday offered an thought provoking interview with the FDA Commissioner, Dr. Scott Gottlieb - to wit

“It used to be that the model was to develop a drug that was going to be administered chronically over the life of a patient,” Dr. Gottlieb says in a recent interview at the FDA’s headquarters. “It was basically an annuity. And now, the model is to try to develop curative therapy,” usually a short course or a one-time treatment [e.g. the Hepatitis C cure Harvoni]. “It’s a completely different therapeutic model. It’s a completely different payment model, and our payment system isn’t adapted to that.”

• Forbes observes that the opioid litigation against drug manufacturers may be leading to a big dollar settlement similar to the tobacco litigation settlement negotiated by state governments against the tobacco manufacturers twenty years ago.  

Fitch said credit implications should be “minimal for large diversified firms” like Johnson & Johnson, McKesson, AmerisourceBergen, Cardinal Health and retail chains such as Walgreens Boots Alliance and CVS Health because they “offer a wide array of products and generate significant cash flow,” Fitch said. “Conversely, the effect on cash flow and liquidity could be significant for smaller manufacturers with material exposure to pain killers; such as, oxycodone, hydrocodone, and meperidine under brand names OxyContin, Vicodin, and Demerol.”

Also last week the Labor Department which enforces ERISA offered informal guidance on the new Association Health Plan rules. No relevance to the FEHBP but interesting for the private employer market.