By Paul Tyahla
Speaker Nancy Pelosi has officially rolled out the prescription drug pricing plan we’ve all be speculating about.
The political future of the bill is uncertain, but its release shows growing momentum on a few key issues: direct negotiation between Medicare and drug companies and connecting the price of medicines in the U.S. to the price paid internationally.
That Speaker Pelosi authored the legislation in the first place carries weight and means this is a high-priority issue to House Democrats. Committee hearings on the bill are expected as early as next week.
Specifically, the bill would:
- Direct the Health and Human Services Secretary to identify 250 drugs without “meaningful competition” each year, and negotiate the prices of at least 25 of them.
- The negotiated price could not exceed 120% of the average of what other advanced countries pay for the medicines.
- Manufacturers that fail to negotiate and reach agreement could face excise taxes on that product’s annual gross sales starting at 65% (and increasing 10% every quarter that it remains out of compliance).
- The manufacturer would be required to offer the negotiated price to commercial plans.
- Limit price increases in Medicare Part D and Part B to inflation applied retroactively to 2016. (The rate of inflation was 1.7% in the last 12 months.)
- Create an out-of-pocket maximum of $2,000 for Medicare beneficiaries.
- Reinvest Medicare cost savings achieved from negotiated prices to funding research at NIH.
Stay tuned to The Week That Was for progress updates and reach out to RRM as you prepare to react.
WeWork is Not Working (for investors)
By Eric Laub
WeWork dominated financial headlines this week, delaying their IPO again due to significant negative investor sentiment. In a world of unicorns and phoenixes, investors initially expected WeWork would go public without issue, but after a long series of setbacks the company continues to be snubbed by investors.
So what are the issues investors are grappling with?
1. Corporate governance (board oversight and control)
2. Valuation is too expansive
3. CEO compensation
4. Contract and lease agreement concerns
5. Post-IPO performance of other Unicorns – Snapchat, Uber, Lyft, Slack
The financial sector has raised concerns about the worrisome trajectory of the economy and this is one more sign the market is shifting – a trend that impacts life science companies as well. Investors are scrutinizing investments more than ever in an attempt to mitigate potential risks—and their interest in new offerings is waning.
WeWork is a symptom of this much larger trend towards risk adverse behavior from the investment community. We project healthcare investors will continue to heighten their scrutiny, but companies with strong fundamentals, great science and solid leadership will continue to have investor interest.
We’ll continue to assess the environment to help you with financial communications planning in the run-up to JP Morgan Healthcare Conference. Drop us a line with questions!
Who wrote this? The managing editor of TWTW is Randi Kahn, who is especially grateful for her RRM teammates for their contributions this week. Kudos to Rose Shelley, Amanda Eiber, Miriam Kalnicki, Paul Tyahla and Eric Laub. Syneos Health Communications' Reputation & Risk Management Practice is a team of healthcare communications consultants, policy-shapers and crisis response specialists. We provide unique solutions to the evolving communications challenges in today’s healthcare industry, using evidence-based approaches to help our clients successfully navigate the most sensitive of situations.
Got thoughts? Contact Randi
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