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Hatch's departing message: Oppose Trump's international drug-pricing plan

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Hatch's departing message: Oppose Trump's international drug-pricing plan

In a departing message, retiring Sen. Orrin Hatch of Utah, the outgoing head of the Senate Finance Committee, urged his colleagues on the panel to object to the Trump administration's idea of testing an international pricing index model for injectable medicines covered by Medicare.

The administration estimated their experiment could save Medicare — the government's healthcare insurance program for seniors and disabled Americans — and U.S. taxpayers $17.2 billion over five years.

But opposition to the idea has been growing.

The drug industry has called it an attempt to impose "foreign price controls from countries with socialist healthcare systems that deny their citizens access and discourage innovation."

Hatch, a longtime advocate of the biopharmaceutical industry on Capitol Hill, agreed. In a Dec. 19 letter to Senate Finance Republicans, obtained by S&P Global Market Intelligence, the 84-year-old Utah lawmaker — the longest-serving Republican senator in U.S. history, who was first elected to the Senate in 1976 — said if the international pricing model was implemented, it would "dampen research and development" and deprive American patients of future breakthrough treatments and further erode competition.

He urged Republicans to stand by "free-market principles as the best way to balance drug costs and innovation."

"Pursuing policies consistent with this path is vastly superior to importing international price controls into the Medicare program," Hatch wrote.

Excessive authority?

The Utah lawmaker said not only was he worried about the Trump administration's plan, which right now is only an advance notice of proposed rulemaking — a bureaucratic mechanism used to gauge public opinion ahead of making a formal proposal — but he was concerned about the mechanism the Department of Health and Human Services was using to carry it forward.

The experiment would be conducted by the Center for Medicare and Medicaid Innovation, or CMMI, which was established by Congress in 2010 under the Affordable Care Act to test new payment and delivery models that might reduce expenditures.

Hatch noted that he has objected to what he called the innovation center's "excessive authority," and likened it to the Independent Payment Advisory Board, or IPAB, which was created under the ACA to analyze the drivers of excessive and unnecessary Medicare cost growth and making recommendations to Congress on policies to curb spending.

Hatch and other Republicans often referred to the IPAB as a death panel.

"IPAB created a board of unelected bureaucrats that would have largely circumvented Congress to determine payment cuts to Medicare providers that could only serve to jeopardize beneficiary access," Hatch wrote in his letter.

Republicans repealed the IPAB in February under the Bipartisan Budget Act before it could ever be convened.

While Hatch said he was not advocating for repealing the CMMI, he urged his Republican colleagues on the Finance Committee to "explore how to right-size" its authority "by placing protections on how it can be used, while still allowing it to execute its mission and achieve its goals through small demonstrations of payment changes."

The CMMI, however, is in jeopardy of being dismantled if a decision rendered last week by a federal judge in Texas, who said the entire ACA is unconstitutional, is upheld.

A coalition of Democrats, however, said they would appeal the decision.