Lawmakers reject industry effort to reverse 'doughnut hole' discounts: reports

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In a recent opioid bill, Congress struck a provision sought by PhRMA to change the Medicare Part D coverage gap. (Pixabay)

Facing billions of dollars in extra costs, pharma lobbyists set to work after Congress increased the industry's share of responsibility in the Medicare Part D coverage gap earlier this year. But the industry was rebuffed again when its effort to include a partial reversal in an opioid bill was rejected.

Under the February change—brought about in a bipartisan budget bill—drugmakers will have to offer up more discounts in Medicare Part D’s coverage gap, also known as the “doughnut hole.” Previously, drugmakers had to pay discounts of 50% in the coverage phase, but Congress increased the share to 70%. The idea was to move patients through the coverage gap faster and into catastrophic coverage, where insurers pay more.

After the change, consulting group Avalere Health wrote it "could have a multibillion-dollar impact on some large" drug companies.

PhRMA president Stephen Ubl said at the time that the change "provides a massive bailout for insurance companies and undermines their incentive to reduce Part D costs."

PhRMA pushed to partially reverse the change in an opioid crisis relief bill, according to reports. According to the New York Times, pharma wanted to reduce the discount level to 63%. The Congressional Budget Office originally estimated the change would save the federal government $7.7 billion through 2027, but later adjusted its estimate up to $11.8 billion, according to NYT.

PhRMA argued that the government intended to save $7.7 billion and sought to secure the $4 billion difference through language in the opioid bill, according to the publication. 

Lawmakers rejected the industry’s effort, according to Politico. In response, Patients for Affordable Drugs executive director Ben Wakana said the “lobbying gambit stood out for its greed and absurdity—pharma wanted $4 billion in a bill to help fight an opioid crisis that drug corporations created.” 

When lawmakers proposed the partial reversal, AARP executive vice president Nancy LeaMond said the organization “strongly opposes PhRMA’s attempts to cut a backroom deal" in the opioid bill. She said the original change is “good for seniors” because it will help save billions in out-of-pocket costs.