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Whichever Way ‘Repeal And Replace’ Blows, Pharma Is Due For Windfall

By Kaiser Health News  
   July 13, 2017

Should the White House call on the IRS to offer a safe harbor for chronic disease medications, patients may visit the pharmacy more often despite the high deductibles.

This article first appeared June 08, 2017 on Kaiser Health News.

By Emily Kopp

The pharmaceutical industry could see windfall profits from a little-noticed tweak to the insurance market tucked into the Trump administration’s draft executive order on drug prices, experts say.

The short, technical paragraph calls for the Internal Revenue Service to allow patients with high-deductible health plans to receive care for chronic diseases, including drugs, before meeting their deductibles.

This allowance, known as a “safe harbor,” could be welcome news for patients with chronic conditions like diabetes or asthma stuck with skimpy plans. For example, a diabetes patient could fill her prescription for insulin with just a copay, even if she hadn’t spent enough on medical bills for her insurance coverage to kick in. But in the long term, experts say, extending a safe harbor to chronic care would encourage more employers to adopt these skimpy plans, while shielding the pharmaceutical industry from pressure to lower drug costs.

“It’s hard to view this as anything but a substantial win for pharma,” said Kim Monk, a partner and pharmaceutical expert at Capital Alpha Partners, which tracks laws and regulations for financial institutions.

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Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.


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