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GOP lawmaker Chris Collins arrested, charged with insider trading on drug company. One of President Trump’s earliest supporters on Capitol Hill has been arrested by the FBI and charged with insider trading. Rep. Chris Collins, R-N.Y., turned himself in to authorities early Wednesday after being accused of multiple counts of securities fraud related to the Australia-based pharmaceutical company Innate Immunotherapeutics. Collins was the largest stockholder and had urged other members of Congress to invest in it, later bragging about how much money he made them. “If you get in early, you’ll make a big profit,” Collins reportedly told a group of House Republicans. The company was working on a drug to treat multiple sclerosis, and the indictment says that Collins passed information about the drug trial results to his son, who used the inside information to make timely trades and to share tips with others. The trades allowed them to avoid $786,000 in losses.

House Speaker Paul Ryan said in a statement that the allegations require an investigation by the House Ethics Committee. He also said that Collins will lose his seat on the powerful House Energy & Commerce Commitee while the allegations are being investigated.

Bonus healthcare angle: One of the lawmakers involved with the company was Tom Price, who made more than $225,000 from Innate and then went on to be Health and Human Services Secretary until Trump fired him.

Welcome to Philip Klein’s Daily on Healthcare, compiled by Washington Examiner Managing Editor Philip Klein (@philipaklein), Senior Healthcare Writer Kimberly Leonard (@LeonardKL) and Healthcare Reporter Robert King (@rking_19).  Email [email protected] for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list.

‘Medicare for All’ supporter loses in Michigan’s Democratic primary. Gretchen Whitmer beat two other Democrats to advance in Michigan’s gubernatorial race after a contentious battle over what it means to be a progressive that featured a debate over the future of healthcare policy. Whitmer, the establishment favorite, had to defend her progressive bonafides against fellow Democrat Abdul El-Sayed, a former doctor and Detroit health department director, who secured the backing of Sen. Bernie Sanders, I-Vt. El-Sayed was a supporter of the state becoming the sole payer of healthcare services, and used the term “Medicare for All” as a rallying cry. Under his proposal, the state would not have actually tapped into Medicare, which is a federal program, but instead would have raised taxes on large businesses and residents to pay for a universal “Michicare” plan. People would still have the option to buy private health insurance, but those who have the public plans would not have any out-of-pocket expenses. Whitmer also raised healthcare as a topic during her campaign, using her work as the state Senate minority leader to expand Medicaid as a progressive credential.

HHS gives private Medicare plans more power to negotiate for lower drug prices. The Trump administration is giving private plans more power to negotiate to lower drug prices for seniors for physician-administered drugs. The Centers for Medicare & Medicaid Services said that the new policy is part of a greater effort by the Trump administration to lower drug prices. The agency’s new policy applies to Medicare Advantage, a program that lets seniors use their Medicare benefits to buy a private plan. “By allowing Medicare Advantage plans to negotiate for physician-administered drugs like private-sector insurers already do, we can drive down prices for some of the most expensive drugs seniors use,” said Health and Human Services Secretary Alex Azar in a statement Tuesday. The new policy focuses on drugs covered under Medicare Part B, which reimburses doctors for drugs administered in an office setting like a vaccine or chemotherapy. Starting on Jan. 1, 2019, Medicare Advantage plans can implement a cost-saving tool called step therapy, which prescribes a patient a more cost-effective drug therapy first and then moves them to a pricier drug if the cheaper one isn’t effective.

What is step therapy? CMS gave an example of a Medicare beneficiary with a newly diagnosed condition beginning treatment on a biosimilar, which is a cheaper version of a costly specialty drug called a biologic. The patient would only move on to a more expensive biologic drug if the biosimilar is not effective. Step therapy is commonly used in private insurance plans and in Medicare Part D, but has not been used in Part B before.

How much money will using step therapy save? CMS said that Medicare Advantage plans spent nearly $12 billion on Part B drugs per year. Currently there are 20 million Medicare beneficiaries who have Medicare Advantage, about a third of all beneficiaries on the program. CMS officials told reporters that step therapy in private sector plans usually generates 15 to 20 percent in savings. This new policy is different from one commonly proposed by Democrats that would give Medicare, and not private plans, the power to directly negotiate with drugmakers to lower costs.

Cancer Society wary of the move. Implementing step therapy could create new barriers for cancer patients, though, argues the American Cancer Society’s Cancer Action Network.  “In some instances, utilization management tools like step therapy can create an extra hurdle for cancer patients to go through before getting the appropriate drug they need to treat their cancer,” said President Chris Hansen in a statement Wednesday. The group said that any step therapy must have a speedy and easily understood appeals process to ensure patients don’t face delays in getting treatment they need.

Pharmacy benefit managers and insurers are happy, pharma lobby not so much. The biggest pharmaceutical lobbying group in D.C. wasn’t pleased with the administration’s decision. “Step therapy will delay many patients’ access to medicines they need, interfere with the patient-physician relationship and increase burdens on physicians to comply with new, more complicated requirements,” said the Pharmaceutical Research and Manufacturers of America in a statement. “The bottom line is this guidance prioritizes the interests of middlemen while increasing out-of-pocket costs for some patients.” But America’s Health Insurance Plans, the insurance industry’s leading trade group, said the move will help empower patients to get lower drug prices. Pharmacy benefit managers, which oversee drug plans for employer and union health plans, praised the move. “Some of the highest priced drugs are found in Medicare Part B, where PBMs currently don’t play any meaningful role,” said the Pharmaceutical Care Management Association, a PBM trade group. Trump criticized PBMs during his address on drug prices in May, saying that they should be eliminated.

But PBMs may not like what comes next. PBMs are pretty happy now, but the Trump administration is considering moves that could significantly impact the industry. The White House is now considering a regulation to remove safe harbor protections for rebates that PBMs and insurers get from drug companies to lower the cost of their products. Currently the rebates are protected from federal scrutiny under the Anti-Kickback Statute, a federal law that prohibits kickbacks for federal health programs. Azar has criticized the rebate scheme used by PBMs and insurers. Because insurers and PBMs get a cut of any rebate negotiated with a drug company, they have an incentive to only cover the highest list price drug in order to get a bigger cut of a rebate. The proposed rule would create a new safe harbor protection, but no text has been released.

Could the rebate change be Trump’s big announcement? Trump is getting ready to make an announcement that he said will bring down prices “really, really substantially.” Trump has made such proclamations before, saying a few months ago there would be a major announcement on drug prices in “two weeks.” His latest statement came after the announcement of the Medicare price negotiation policy. Trump gave no indication on Wednesday on what the new announcement could be though.

Amid growing opposition, CVS Health awaits approval for Aetna deal. Despite opposition from doctors and an increasingly complicated regulatory landscape, CVS Health reaffirmed Wednesday its intention to complete the $69 billion acquisition of insurer Aetna, for which federal approval is pending. The American Medical Association and California’s insurance commissioner earlier this year urged the Trump administration to halt the deal. Media reports in July, however, suggested the Department of Justice would not seek to block it. In its latest earnings report, CVS said the agency is still reviewing the transaction after a second request for information in February. The Woonsocket, R.I.-based pharmacy chain is prepared “for a seamless integration of CVS and Aetna with one goal: to transform the consumer health care experience and, by doing so, deliver long-term profitable growth for shareholders,” Chief Executive Officer Larry Merlo said in a statement. Merlo said the company has had “productive engagement and discussions” with the administration, but stopped short of confirming any direct conversations with President Trump.

Major doc group said new analysis proves CVS-Aetna merger will hinder competition. The biggest doctor group in Washington is pleading with the Justice Department to stop a merger of the pharmacy chain CVS and mega-insurer Aetna, arguing it will substantially diminish competition in some markets.  The American Medical Association sent an analysis to DOJ on Wednesday regarding the potential merger. The analysis found that the merger is expected to increase premiums on Medicare Part D, the program’s prescription drug plan. The analysis charges that the merger will increase premiums because of an increase in market concentration in 30 of 34 Medicare Part D regional markets.  AMA adds that both Aetna and CVS have their own share in the “highly concentrated market for PBM services.” Currently CVS, Express Scripts and Optum represent the majority of the PBM marketplace.  

Democrats concerned about possible sexual harassment at NIH. House and Senate Democrats want answers from the head of the National Institutes of Health on how the agency is tackling sexual harassment. Sen. Patty Murray, D-Wash., and Rep. Rosa DeLauro, D-R.I., sent a letter to NIH Director Francis Collins on Tuesday. The letter references a June report from the National Academies of Science, Engineering and Medicine that found nearly 60 percent of women in academia experienced sexual harassment while working. “Federal funding should not support laboratories and institutions where workplace harassment is allowed to continue unaddressed,” the letter said. It calls for copies of the agency’s policies on sexual harassment.

Indiana GOP senate candidate supports preserving pre-existing condition protections. Indiana Republican Senate nominee Mike Braun said Tuesday that insurance companies should be forced to cover pre-existing medical conditions, remarks that sparked applause from GOP activists. Braun, who is challenging incumbent Democrat Joe Donnelly, was responding to a question from a friendly crowd in Hamilton County, a suburban Republican stronghold north of Indianapolis. “Definitely; yes. Nobody should go broke because they get sick or have a bad accident,” Braun said, when asked if health plans should cover pre-existing conditions. His comments come as Republicans are under attack since the Justice Department declined to defend Obamacare in court against a lawsuit that said it should be struck down. The Justice Department sided with the lawsuit, brought by 20 states, that the law’s pre-existing condition protections should be eliminated. However, the DOJ doesn’t believe the rest of the law should be struck down, as the lawsuit led by Texas does.

Democratic groups target 15 Republicans as ‘worst for women.’ Two outside Democratic groups are taking aim at incumbent Republicans they say are “worst for women,” in the hopes that voters will oust them in November. American Bridge and Ultraviolet put two GOP senators and 13 GOP House members on a new “Worst for Women” scorecard that details their voting record on policies that impact women. The associated campaign includes a five-figure digital ad buy that will run on Facebook and link voters to the scorecard microsite. The groups built the scorecard by analyzing the voting records of the 114th and 115th Congress, and limited the list to those who voted to repeal the Affordable Care Act and repeatedly voted to defund Planned Parenthood. Those on the list also voted in favor of the GOP tax plan, against a minimum wage hike and backed a ban on abortions after 20 weeks. The targeted Republicans include Sens. Ted Cruz of Texas and Dean Heller of Nevada. House members on the list include Republican Reps. Dave Brat of Virginia, Jim Jordan of Ohio, Scott Taylor of Virginia, and House Majority Leader Kevin McCarthy of California.

CDC study finds Zika virus leading to longer-term problems for babies. Babies exposed to the Zika virus may suffer healthcare problems long after birth, according to a new study, including ones that don’t manifest until years later. The study, published Tuesday by the Centers for Disease Control and Prevention, underscores the dangers posed by the virus, which is spread primarily by mosquito bites. The CDC said that there were more than 4,800 pregnancies in the U.S. territories like Puerto Rico and the Virgin Islands that had a lab result showing confirmed or possible Zika infections from 2016 to 2018. Puerto Rico was one of the areas hit hardest by the virus. Of those pregnancies, 1,450 babies were at least one year old and had some follow-up care as part of the study. About 1 in 7 (14 percent) of those 1,450 babies had one or more health problems likely caused by Zika. “Some of these problems were not apparent at birth and were identified as the babies grew older,” the study said. “The full range of long-term health problems caused by Zika will remain unknown until these babies mature.”

RUNDOWN

Bloomberg AstraZeneca to pay $110 million to settle Texas drug suits

ProPublica The shadow rulers of the VA

USA Today Democrats flood airwaves with healthcare ads, while GOP touts Trump in 2018 midterms

NJ.com New Jersey hospitals are facing a doctor shortage soon. Here’s why it’s Washington’s fault

STAT News Drug pricing could be a slam dunk campaign issue for Democrats, if only they had a plan

Kaiser Health News As opioid crisis rages, some trade tough love for empathy

Associated Press Experts question benefits of fluoride-free toothpaste

New York Times What to know about Argentina’s vote on abortion