Unscripted – The AMCP Podcast: Health Policy and Regulations with the New Trump Administration

Welcome to this episode of the AMCP podcast series. Listen up, I'm your host, Fred Goldstein. Today, we'll be discussing the newly elected administration of President Donald Trump and its potential impact on current and future legislation affecting managed care pharmacy. My guests on today's show are Adam Colburn, Associate Vice President, Congressional Affairs at AMCP; Jeanne Tunstall, Associate Vice President, Regulatory Affairs at AMCP; and Andrew McKechnie with the Tiber Creek Group. Welcome.

Thanks, Fred. Thanks for having us.

Thank you. Jeanne, why don't we start with you? Please give us a high-level overview of some of the major issues you're watching with the new administration.

Yeah, so the administration has kind of come in with guns blazing. There's been a lot of activity in the last couple of weeks. From the regulatory perspective, one of the things that I would definitely want to call attention to is the executive orders. There's been a regulatory freeze implemented, which basically means that any pending rules or guidance documents from the agencies, including things impacting Medicare Advantage, Medicaid, prescription drug policies, all of those are on hold until the administration has had time to review them.

So, there's not a ton of activity in the new regulation space yet, but I expect that to change soon. Another executive order that has kind of taken the world by storm in the last couple of days was about the federal freeze on financial assistance, loans, and grants. There was an OMB memo issued on Monday evening basically saying that all federal assistance was frozen. On Tuesday, that memo was blocked by a court order until February 3rd. But then yesterday, OMB rescinded the memo because of all the pushback that they've gotten.

There was a whole flurry of activity about whether that memo applied to things like Medicaid. Basically, there was a lot of activity, a lot of negative feedback to the administration. So OMB did rescind the memo, but the White House press secretary said that the freeze was still in place. So there's still some questions to be asked around that. We're also keeping an eye on other executive orders related to DEI or diversity, equity, and inclusion activities. There was an executive order on the transgender issue, basically stating that there are two genders that this administration is recognizing.

One thing to keep in mind related to executive orders is that executive orders aren't like laws and regulations in the traditional sense. They're more like directives to agencies. So, before there's an actual requirement that takes effect, it has to go through agency action, the regulatory process, basically. So while there's something that we definitely need to keep an eye on, there are more steps in the process.

Another thing we're kind of keeping an eye on with the new administration is all of the agency nominations. We've got a variety of different healthcare agencies that we're concerned with, and we're waiting for confirmation on the agency heads for all of those. So that's in our viewpoint right now.

You've got a lot on your plate. Jeanne, can I ask a question? This is like a procedural question about the OMB memo. Admin law is absolutely not my strong suit, but is there a difference like responding to that press secretary tweet about, or ex post? I don't know what we call them now. But the tweet that was like the order isn't rescinded, just the memo. Are those two distinct things?

It doesn't seem to be an actual procedural difference. I think it's more maybe the administration's view on things rather than how things are generally done. The OMB memo isn't an executive order. It's sort of a one-off memo. So, if the administration still plans on having financial assistance be frozen, then that means that they will probably still take further actions. So it's something to watch. There was another court that saw that tweet and also said that was blocked and they can't freeze all of that. So I think there's more to come on this particular issue. I think we're going to see more things play out in the coming weeks.

Who knows? Not me. I was just going to add, I think what's been interesting as much as it has been surprising is the pace and volume of the first week. I'm not sure it should be surprising. This administration looked back in 2016 and saw how unprepared they were. I think it took a lot of people by surprise when Trump won his first term. They didn't want that to be the case this time. So there are a lot of groups, America First Policy Institute, Heritage, Paragon, that have for the past four years been working towards this week of sort of the flood the zone strategy. So it has been surprising. But if you look back at the strategy and the preparation, I'm not sure it actually should be that surprising. They were getting ready for this for a long time.

Yeah, I agree. And I think their strategy really is to throw everything at the wall and see what sticks.

Agreed. Absolutely. So why don't we move on to the Inflation Reduction Act and some of its provisions regarding drug pricing, etc. Adam, do you want to start with that one?

Yeah, I can start. I think the main thing with the Inflation Reduction Act is that the major health provisions don't really seem to be at risk. I don't know, Andrew, maybe you disagree with me, but it seems like negotiation is here to stay. Part D redesign is here to stay. Maybe these things will look a little bit different in the implementation under the Trump administration, but I haven't really heard much talk of congressional repeal of the statute. Some of the other provisions, like the climate change provisions, are being eyed for repeal or delay as a cost offset. But the expectation that I have is that all the big health pieces will remain the law of the land. A lot of this has to do with, during his first administration, President Trump expressed support for drug price negotiation. Jeanne made a comment to me a couple of weeks ago that this probably fits with Trump's sort of brand, his persona that he's had for decades as a negotiator and someone who can strike a deal with Big Pharma. So I don't view the IRA as being under threat for repeal, not like we saw with the Affordable Care Act in 2017. But we may see smaller legislative changes. The conversation in D.C. for the last couple of months has very much been driven by what are the unintended consequences of the Inflation Reduction Act? We're seeing pharmacies say that they're going to not stock some of the negotiated drugs because it no longer makes financial sense for them. So I wouldn't be surprised if we saw some tinkering to try and refine things, but I wouldn't expect any sort of large change at the statutory level. Andrew, I don't know what your thoughts are.

No, I agree with that. I think on both points, one, I think there's a potential there that Donald Trump kind of takes the, you really want to see negotiation, let me show you how well I can negotiate and is actually more aggressive with the industry than Biden was. So I think that's certainly a possibility. I would also say Congress is just kind of stuck with it. Even if they wanted to get rid of it, repealing it costs a lot of money because it is a saver on federal dollars. So getting rid of it is difficult. I think there is sort of an overlap between Trump's history on negotiation and now the legislative ability to do it. And then I totally agree on things like when certain drugs are eligible for negotiation and things like that and creating some parity between biologics and small molecule. Those kinds of things, I think, are fair game for fixes or changes, but I think wholesale repeal is unlikely.

Jeanne, anything you'd like to add?

Yeah, I would add that CMS earlier this week issued a statement about the negotiations and that they intend to continue with the negotiations. They obviously have to because it's statutory. But they did say that they would consider ways to make the negotiations more transparent. As Adam and Andrew were talking about, this is statutory requirements, but the administration could tweak the regulations and guidance around the program, but the main framework is in statute. So, as Adam said, we'll see little changes around the edges.

Great. Andrew, Jeanne had mentioned this issue of the confirmations, kind of, as we've been watching them. Where are we with those?

Yeah, we're right in the midst of them. Actually, it's funny, as we're recording this, I believe RFK Jr. is sitting before his second committee today. He was at the Senate Finance Committee yesterday and is at the HELP Committee today. I think that one took a lot of people by surprise. The Trump transition team had kind of ruled out RFK Jr. as being at HHS. And then lo and behold, Trump went a different direction and decided to nominate him. Another curveball we got was Dr. Oz for CMS director, Dr. McCary for FDA. So, we're in the process. RFK had his first hearing yesterday. It was not without some bumps in the road. I don't think he did anything that will derail his confirmation. I still think he gets there. I think there may be some no votes on the Republican side, but I still think they'll get to 51. But they pressed him on a lot of the topics you would expect: vaccines and his history on vaccines. They got into a little bit of the weeds on Medicare and Medicaid, and I think he struggled a little bit. He's clearly newer to those programs. His history has been more in the drug and food space. And then some pro-life issues just given some changing positions in his history on that one. So I think they wanted to nail that down. But I expect he'll be confirmed. Depending on how today goes, he's got to obviously get through today's confirmation hearing as well. And then we'll move on to Dr. Oz and some of the others. But generally, it does feel like Trump is going to get the cabinet he wants and the people he wants. And we're seeing actually a lot of people from his first term go back into the administration to fill some of those staff roles that we work more closely with. So while we've gotten some new faces at the top, I think from an advocacy standpoint, we're happy to hear and see that some of the folks we've worked with over the years are going to go take positions at CMS and FDA and some of the places that we certainly need to be active.

One question for you on the timeline. So we're recording this on January 30th. How long usually is it between the hearings and sort of the final vote? So, by the time people are listening to this in the first week of February, will RFK have been voted on? Or might it drag out a little bit?

Yeah, it's possible. Again, it'll somewhat depend on today. And you'd have to ask Senator Schumer how long he wants to make the process take. But my guess is, I think it will be soon. They've gotten through a lot of the big, I mean, they wanted to focus early on on a lot of the homeland security and kind of national security designees. They've gotten through most of that. They've gotten the treasury secretary done and some of the less controversial ones. So, I would expect we could see him on the floor in the next couple of weeks.

One of the other things that sort of struck me looking at the political appointees at lower levels like deputy secretaries and deputy administrators, many of them are very familiar names and I think way less surprising than folks like RFK and Dr. Oz. So I think the headlines about RFK and Oz are maybe missing that a lot of the under sort of lower level workforce is more traditional for what we would expect in a Republican administration.

Yeah, I think that's, I mean, there was some question. You're absolutely right. There was some question early on. Is Oz going to take over HHS and then it's going to be flooded with the Make America Healthy crew all around them? And that does not seem to be the case. I think we're seeing again a lot of the establishment names we've seen in the past, people that are more sort of traditional Republicans. And it does seem to be a little bit of a sign that he's going to be kept on a little bit of a shorter leash. So we'll see how achievable that is, is debatable. But putting some of those more establishment names in place. I also think in a Trump administration, the White House yields excessive influence in the policymaking process. So I think all these agencies will look to the White House for guidance on what to do and what not to do. And that's just the way they roll. And Trump just wants to be involved in a lot of decisions.

So Andrew, let me ask you one on that too. Being that these sort of higher but mid-level folks are more traditional, does that mediate the impact of what's coming out of the White House, or does it just go right through?

No, I think it, as I said, well, two things. One, I think we're still kind of sorting out how much this administration wants to focus on healthcare policy. I think there's a lot of other areas, immigration, energy, reforming the government that seem to be taking more of a priority. If you remember back to 2016, we were right out of the gate with ACA repeal. And so healthcare was the number one, two, and three issue. This year it's very different. That being said, yes, I think a lot of the folks that are going into some of these roles have been part of this four years of planning. And there does seem to be a level of coordination and everyone being on the same page so that they don't hit some of the stumbling blocks they hit previously. Now they're going to continue like the OMB memo is a perfect example of what appears to be a little bit of an unforced error. And whether or not they were expecting the blowback or not, there's going to be some bumps in the road. But their goal is for things to go a little bit more smoothly this go around.

Fantastic. So one of the issues that's come up, there's been a lot of press about healthcare recently, a lot of issues going on in the press, in Congress, and one of the areas that's received a fair amount of attention is PBMs. So Adam, do we know where the administration is thinking, or do we know what they're thinking about in this area?

I don't know that we have any specifics from the administration on what they're doing. During the campaign, candidate Trump said that he would take on drug middlemen, which was very high level and sort of lacking in specificity. We see a lot more, I think, we get a much clearer direction looking at Congress. There was a lot of conversation about PBM reform in the 118th Congress. It was very close to passing in December as part of the funding continuing resolution that extended government funding until March. Ultimately, that sort of fell apart for reasons outside of the congressional negotiation process. The big focus areas are transparency, which is sort of badly defined in the public conversation. There's a lot of attention on spread pricing and pass-through pricing. Utilization management strategies like prior authorization and step therapy/step edits are really in the crosshairs. On the prior authorization part, I think the pharmacy side of things catches a little bit of a stray bullet from the medical side of things where it tends to be much more serious and urgent when patients are facing slowdowns. Not to say that isn't true on the pharmacy side, but a lot of pharmacy prior authorization is sort of automated at this point and is resolved without a patient ever knowing that they went through a prior authorization situation. I think that will continue to be a focus. There's the Lower Cost More Transparency Act, which was a house-led effort last year that came pretty close to the finish line. A lot of those provisions from that bill were included in the bipartisan package that had been negotiated in December. I wouldn't be surprised to see those come up again. Congressman Brett Guthrie, who last year was the chair of the Energy and Commerce Health Subcommittee, said that he was campaigning for a chair of the full Energy and Commerce Committee and was elected to that position. When he was campaigning for that position, he said that he was interested in pursuing additional PBM reform in 2025, even if this December package went through. He's got the chair of ENC, Buddy Carter from Georgia, one of two pharmacists in Congress, is the chair of the ENC Health Subcommittee, and he's been a longtime critic of PBM practices. He owns several pharmacies himself. I would not be surprised at all to see PBMs towards the top of the list, especially on the health sub side. One of the questions, and maybe Andrew can shed a little light on this, is how likely those things are from the December package to make it into the March negotiations.

The PBM conversation is sort of fascinating because, at a time of historic divisiveness, nothing brings people together like PBMs. There is a lot of bipartisan interest to do something. However, if I look back, Trump in his first term issued the rebate rule that was ultimately rescinded. That's eight years of people trying to do something on PBMs, and they have yet to do it. So yes, it feels like we're closer than we've ever been to some PBM reforms, but I'll sort of believe it when I see it. I agree with Adam's list of what's in the mix. I would also add, delinking is a concept that a lot of people talk about, which is basically the rebate cannot be based off the price of the drug. So you would move to more of a flat fee type system. I would also note, there's a bit of a red line in this debate, at least for the PBMs and for some in Congress. It's one thing to implement these reforms in Medicare and Medicaid. Those are government programs. I think where people get a little more uncomfortable and certainly PBMs push back harder is moving these reforms into the commercial market. They feel like there should just be more flexibility there for employers and PBMs to decide their arrangements. They don't like to see the restrictions. I think there's some particularly more conservative members in Congress that really resonates with. So it'll be interesting to see. Are we talking about just Medicare and Medicaid or are we going further and going into the commercial market? We should know more in March when the next government funding package comes up.

Great. Thanks for those insights. The other area that's been interesting to watch is biosimilars. Obviously, we're seeing a lot of new biosimilars being released. Jeanne, where are we with that issue?

Near the end of the Biden administration, FDA seemed to be indicating a willingness to look more at interchangeability. It's statutory, so they can't actually do away with it at the agency level. But they definitely seemed to be more willing to make some changes. The new incoming administration with the regulatory freeze, we haven't seen any indication yet of the direction that they'll take with respect to biosimilars. From a regulatory perspective, I don't think there's a whole lot of motion yet, but that may change once we get confirmation of the new agency heads. Adam, there may be some more insight you can offer on the legislative side.

We saw a decent amount of biosimilar, but then the other big thing was updating the statutory definition of biosimilar to make biosimilar equivalent to interchangeable. Um, and that is. You know, sort of one of the big pieces of the biosimilar puzzle that has, um, impacts on formulary design on reimbursement, um, all sorts of things. I think, you know, we see a lot of folks suggest that we should take an approach to biosimilars.

That's more comparable to the European. Approach, which I think is complicated by the fact that the European Medicines Agency E. M. A. Doesn't have interchangeability as a thing that exists in their sort of drug regulation. Um, so that's sort of a unique American  consideration that we have to work around.

One of the questions I get a lot is like, how does this mess up states? Uh, and I don't think it really does. Um, all the state laws, uh, with the exception of, I think, Hawaii, just automatically You know, adopt the the federal interchangeable  list. So if something, you know, if FDA says it's interchangeable, all the states will automatically treat it as interchangeable.

And there's no difference, you know, between biosimilars and small molecule drugs at that point. Um, Hawaii maintains their own interchangeability list. I don't know how different it is from, you know what the orange book or purple book have? Um, but that, you know, maybe they have something that they have to do that special.

Uh, but, you know, I think the focus legislatively is really on changing that statutory language. And we see some, I think, smaller potatoes bills as well. Like there were some study bills on how can CMS promote it.  the use of biosimilars in Medicare and Medicaid, um, which don't actually require anyone to do anything.

It's just sort of like, Hey, CMS, give us your thoughts on, on this subject. Um, but, you know, I wouldn't be surprised if we, we saw the red tape elimination act, uh, come back in the 119th. I think a lot of people view biosimilars as essentially generics 2. 0, um, which is, is not exactly the, the same, you know, they're not exactly equivalent, uh, scenarios, but there's a lot of attention on biosimilars as something that can, um,  drive down costs that can  save the government money.

I think there's maybe some  idiosyncrasies with the biosimilar market that  raises the question of how much money exactly can we save through them? Because it's a Bringing a bio similar to market is a lot more work than bringing a small molecule generic to market. Um, so, you know, there's sort of more financial considerations that need to be taken into account.

But overall, I think we are starting to see sort of congressional consensus that bio similars are a way to reduce drug spending or limit drug spending growth, at least.

One of the other hot topics,  Adam, is 340b.  Where are we with that? Uh,  yeah, uh, it is a hot topic. Um, I mean, I don't,  I don't know how likely 340b is to move, but I think there is sort of a  growing chorus of voices saying that something needs to change. Um, you know, there, I think maybe the thing that I find most interesting is that both  Uh, supporters of 3 40 B reform and supporters of 3 40 B as it exists currently  frame their position as support for 3 40 B or protecting 3 40 B.

You know, I think  a lot of the conversation that I'm seeing is driven by passing some of the savings along to patients, right? The 3 40 B statute right now does not contain a definition of a patient. Um, and so that's Been something that's talked about a lot. I don't know that we're particularly likely to get, uh, to a patient definition anytime soon, because even the folks who agree that there should be a definition don't agree on what that definition should be.

Adam's the lucky one who gets to redo all the questions.

Am I back? You're back. He's back. Okay, I'm gonna, I'm gonna try to be quicker because we're coming up against time. Okay, yeah, let's, I'm gonna, I'm gonna start that question off again. You can hit it and then we'll get to Andrew and then we'll close it up, okay? All right.  Another one of the hot topics, Adam, is this issue of 340B.

Where are we with that one?  Yeah, I think 3 40 B is really a pretty hot topic. Um, you know, the hospitals and they're sort of associated industry groups and professional groups are big fans of 3 40 B as it exists currently.  But there's a growing chorus of voices calling for reform. And so I think, um, you know, some of the common reform proposals that we see include a Yeah.

Patient definition. Although people who agree, uh, you know, different stakeholders who agree there should be a definition of patient don't necessarily agree on what that definition should be. So that's, I think, a real sticking point on that front. Um, I think there's, you know, a lot of attention on, uh, preventing duplicate discounts because Medicaid programs can't claim rebates on 3 40 B drugs.

But right now, Medicaid programs aren't the best way to do that. you know, informed when a claim is a 3 40 B claim. So something like a 3 40 B claims identifier has been suggested. Um, and then again, on the patient front, I think, you know, one of the even if  we're not passing patient savings along, which some, uh, some Reformers are calling for.

I think a lot of folks want to see sort of a two tiered approach to, uh, you know, two tiered qualification for 3 40 B pricing for a covered entity. Um, where not only do you have to be a covered entity, but you also have to have the patient qualify. Um, so right now, all patients, uh, at a covered entity.

you know, the hospital can get the 3 40 B price for that drug. But this may change it to limiting how many patients per hospital. Uh, qualify. Um, but Andrew, I don't know. This is a pretty political one. I don't know if you have any thoughts on how it's going. I agree with everything you said on the technical side.

I mean, this is another one that, you know, 3 40 B quote unquote reform has been kicking around since I came to D. C. In early 2000.  And I feel like historically the hospitals and the pharmaceutical companies have kind of wrestled this to a stalemate where nothing happens. I think there's more conversation about it right now than there has ever been.

Sort of similar to PBMs. Now, whether or not there will be an agreement on some kind of reforms and honestly, I, my guess is as far as they could go would be some kind of transparency stuff around it. Um, but we'll see. I just, I think it's, it's really difficult because hospitals are, are, uh, very active on this.

The pharmaceutical companies are very active and it kind of leads to nothing happening on a regular basis.  Great. So Andrew, why don't we finish this thing up with what other legislative action might we see?  Yeah, I mean, um,  so I think that the main thing we will focus on legislatively is again what gets included in this March government funding package.

There was a pretty robust health care deal that got negotiated in December that kind of got shelved and and that could certainly be revived and it deals with everything from PBMs to telehealth extension of flexibilities to a physician payment patch to a number of different issues. So, you know, let's see what happens in March.

Um, after that, you know, Congress is going to be focused on these reconciliation efforts, which are, you know, passing bills just with Republican votes. Uh, they'll mainly be looking to extend the 2017 Trump tax cuts. And I think in healthcare. You know, it'll basically be trying to find ways to help pay for that.

So you could see significant Medicaid reforms totaling hundreds of billions of dollars potentially. Um, that's obviously politically very challenging and Republicans have a very narrow majority. So we'll see if they can pull that off a site neutral payment reforms to providers. So if a hospital buys a physician practice, you know, are you paying at the physician practice rate or a hospital outpatient rate?

That's another one that Congress would like to look at. to do something on but is is controversial. Um, and then then the question after all that is like how much bandwidth is left to do anything else? I mean, there's a lot of people who want to reform the physician payment system. There's a lot of people who want to work on drug shortages.

And we're going to have to see kind of how much energy is left given, you know, those two big things looming over us.  Well, I'd like to thank you all Geni, Adam and Andrew for joining us today.  Yeah, great to be here. Thank you. Thank you.