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August 19, 2022

The US government will no longer pay for Covid-19 vaccines, treatments

Daily Briefing

    Throughout the pandemic, the federal government has provided Americans with Covid-19 vaccines and treatments free-of-charge, but this will soon change as health officials plan a transition to commercial purchasing—a move health experts say will bring new challenges with "reimbursement, equitable access to vaccines and treatment, and distribution," Stephanie Armour reports for the Wall Street Journal.

    Our take: 10 health policy topics—including Covid response—to watch in 2022

    US to begin shifting costs of Covid-19 therapeutics to insurers, patients

    As federal funding for Covid-19 vaccines and treatments dwindles and cases decline, the Biden administration is planning to stop paying for these products and transition to a more standard purchasing process through different health care system channels, including commercial insurers and pharmacy benefit managers (PBMs).

    This week, Ashish Jha, the White House Covid-19 response coordinator, said the Biden administration has been considering how it will transition from the "acute emergency phase" of the pandemic where the government purchased the bulk of Covid-19 tests, vaccines, and treatments.

    While the administration has signed purchase agreements for updated vaccine doses in the fall, in other ways, the transition has already begun. According to the Journal, the Biden administration in August stopped supplying monoclonal antibody treatments. And Eli Lilly in August shifted to commercial sales of its Covid-19 monoclonal antibody treatment to states, hospitals, and other healthcare providers.

    "My hope is that in 2023, you're going to see the commercialization of almost all of these products. Some of that is actually going to begin this fall, in the days and weeks ahead," Jha said. "You're going to see commercialization of some of these things."

    According to the Wall Street Journal, HHS will hold a planning session for this transition on Aug. 30. Representatives from drug manufacturers, pharmacies, and state health departments will attend to discuss reimbursement and coverage, regulatory issues, and access for those who are uninsured.

    Moving payments for Covid-19 vaccines and treatments is likely to take months, an HHS spokesperson said. "We've known at some point we'd need to move over into the commercial market, and we're approaching that time now," said Dawn O'Connell, assistant secretary at HHS for preparedness and response. "We don't want to do it by fiat."

    How will this transition affect access to vaccines, treatments?

    According to Jha, the transition will bring Covid-19 vaccines, tests, and treatments closer to the regular U.S. health care system. "If you need a treatment, you get a treatment the way you'd get treatments for heart disease and other viruses and bacteria and other kinds of things," he said.

    However, Jha added that the administration is also considering how to ensure uninsured Americans will still be able to access necessary Covid-19 resources with the move to the commercial market. "Right now everybody can walk into CVS and get a vaccine. I want to make sure when we make this transition, we don't end up in a point where nobody can get a vaccine because we didn't get the transition right," he said.

    In addition, switching vaccine purchasing to the commercial market would mean that each insurer and PBM would negotiate with drug manufacturers and prices would likely be higher than what the federal government has paid, said Larry Levitt, EVP for health policy at the Kaiser Family Foundation.

    Some pharmaceutical companies have already indicated they will raise the cost of their vaccines once they are on the commercial market. For instance, Moderna CEO Stéphane Bancel said he expects Medicare reimbursement for the company's vaccine to be $60 in the future—much higher than the $16.50 per dose the federal government initially paid.

    According to Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology, any price increase for the vaccines will also increase patients' insurance premiums, as well as cause taxpayers to pay more through Medicaid and Medicare.

    Levitt also noted that the United States may not be able to access vaccines as readily as it does now once they move to the commercial market.

    "Without the government purchasing vaccine doses in advance, the U.S. may fall behind other countries in getting quick access to boosters and new variant-specific vaccines," Levitt said.

    Overall, there are many challenges to be considered during this transition, including when manufacturers will move into the commercial market and what will happen with treatments that are currently only authorized for emergency use.

    "There are issues of reimbursement, equitable access to vaccines and treatment, and distribution that need to be resolved," said Anne McDonald Pritchett, SVP at the Pharmaceutical Research and Manufacturers of America. (Armour, Wall Street Journal, 8/18)

    Health policy topics to watch in 2022

    The legislative, regulatory, and judicial outlook for health policy in 2022

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    The Biden administration's first year in office was unsurprisingly dominated by the Covid-19 pandemic. While Democrats in Congress were able to pass part one of President Biden’s infrastructure package, other health care priorities were largely sidelined. As we look to 2022, there are 10 key health care topics that are ripe for congressional or regulatory action. If and how Congress and the Biden administration move on those actions will have strategic implications for industry executives across the health care ecosystem.

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