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What We’re Watching: March 18, 2019


Drug pricing continues to dominate the healthcare conversation. There was a House Energy & Commerce Health Subcommittee hearing reviewing seven bills aimed at curbing branded manufacturers’ efforts to impede generic competition. Furthermore, the CMS released its Drug Spending Dashboards illustrating the power of market competition and advancing the agency’s agenda on greater overall price transparency. The CMS highlighted that drugs with no competition drove the biggest price increases.

What we’re saying: Premier issued hearing statements in support of the seven bills, citing their positive impact on driving market competition, lowering drug costs and relief for our members. Despite the politically charged environment, we estimate about half of the bills will ultimately see the President’s desk, with legislative action anticipated within the final budget deal later this year.


2019 marked a new Pathways to Success for Medicare accountable care organizations (ACOs). This means that beginning in 2019, ACOs coming off of one-sided risk contracts must transition to two-sided risk (an ACO must pay Medicare back if it increases spending) in one to three years, depending on their model. Previously ACOs could remain in one-sided risk models for up to six years. The change caused the policy community to wonder if this would lead to an exodus. The results are starting to emerge with the CMS releasing the list of ACOs participating in the 2019 MSSP. Among the findings from an analysis published on March 15, hospital-led and large ACOs have low dropout rates at the end of 2018, while physician-led ACOs have higher dropout rates.

What we’re saying: We are pleased to see that the program’s goal of moving larger organizations into downside risk contracts appears to be working. This is an issue that as been top of mind for Premier over the last few years. We work with several Medicare ACOs on these models and are helping them succeed in two-sided risk.


President Trump announced that Dr. Ned Sharpless would succeed Dr. Scott Gottlieb (who announced his resignation earlier this month) as the new FDA commissioner. A former cancer researcher and co-founder of pharmaceutical company G1 Therapeutics Inc., Sharpless had been leading the National Cancer Institute. Sharpless has pledged to continue the policies begun by Gottlieb.

What we’re saying: We are happy to hear that Dr Sharpless will continue guiding the FDA on the course that Dr. Gottlieb started on. We are excited to continue our work with the FDA to help identify ways to generate competition for drugs to drive costs down.


What We’re Watching is a weekly blog focused on the current events Premier is following and their relevance to the work of Premier and its members.

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