Health Care

Three of the country’s largest health insurers will soon begin paying for a top weight-loss drug for certain people on Medicare with heart-related conditions, The Wall Street Journal (subscription) reports.

What’s going on: “CVS Health, Elevance Health and Kaiser Permanente said they would cover Novo Nordisk’s Wegovy for the use of reducing the risk of heart attacks and strokes in people who have cardiovascular disease, meet body-weight criteria and are covered by a Medicare drug-benefit plan.”

• The class of weight loss drugs to which Wegovy belongs was previously excluded from Medicare coverage by a U.S. law.

Why it’s important: “The decisions will ease the financial burden” of those who have been paying out of pocket for Wegovy and are likely to spur use of the drug among those who couldn’t afford or did not want to pay the full price.

• Approximately two-thirds of U.S. adults are overweight or obese, according to the recent NAM report, “Manufacturers on the Front Lines of Communities: A Deep Commitment to Health Care.”
• Excess body weight and obesity are associated with higher health-care costs for both employers and their workers. They also “raise the likelihood of other illnesses” and affect “productivity and the ability to complete job functions,” according to the study, which points to weight-loss drugs as part of the solution.

Why it happened: New guidance released last week by the Centers for Medicare and Medicaid Services holds that Medicare Part D plans, administered by private insurance companies, could “cover anti-obesity medications if the drugs receive approval for an additional use that is considered medically accepted.”

• This applies to Wegovy, which the Food and Drug Administration recently approved for reducing the risk of heart attacks and strokes among those with histories of heart disease and body mass indices above a certain threshold.

However … The use of Wegovy “for weight loss alone” will remain excluded from coverage under the CMS guidance.

Earlier this year, the House passed legislation including key NAM tax priorities. Now it’s time for the Senate to do the same.

That’s the message of a new NAM digital ad campaign launched today and set to run over the next several weeks.

What’s going on: The 30-second TV ad—which will stream in Washington, D.C., and in the key states of Idaho, Kentucky, Louisiana, Oklahoma, New York and New Hampshire—asks viewers to urge the Senate to pass the Tax Relief for American Families and Workers Act, which cleared the House by a bipartisan vote in January.

• The legislation restores three key pro-growth tax provisions from the 2017 Tax Cuts and Jobs Act that expired in 2022: immediate expensing for domestic R&D, enhanced interest deductibility and full expensing.

​​​​​​​The background: Earlier this month, Courtney Silver, president and owner of Ketchie and chair of the NAM Small and Medium Manufacturers Group, told the Senate Finance Committee about the impact the three provisions’ expiration has had on her family-owned precision machining company.

• “In the years following the TCJA, I was able to make a higher level of investment because I knew our tax code was going to have a baseline of certainty,” she said. “Today, however, I am unable to make these investments because of the uncertainty that Congress will address the expired TCJA provisions. . . . Because I am unable to realize the full deduction of my investment within the year I purchase it, the investment seems too risky and irresponsible.”

​​​​​​​What’s needed: Senate Majority Leader Chuck Schumer (D-NY) has taken an early procedural step to put the House-passed legislation on the Senate’s calendar. But more needs to happen, and soon, the NAM’s ad tells viewers.

• “Vital tax provisions are expiring, harming our ability to compete globally and invest in new factories and equipment,” the ad says. “The House has done its job and restored these provisions with overwhelming support. The Senate needs to act now.”

Manufacturers are committed to providing employer-sponsored health insurance to their workers, the NAM told Congress late last week—and that’s why any changes made to the Employee Retirement Income Security Act of 1974 should facilitate rather than hamper those offerings.

What’s going on: “ERISA underpins manufacturers’ ability to provide health insurance to their employees,” NAM Vice President of Domestic Policy Charles Crain said in response to a call by the House Committee on Education and the Workforce majority for comments on how to improve ERISA as the law’s 50th anniversary nears.

• “The law allows manufacturers to provide uniform benefits to workers located across multiple states, and to tailor those benefits to meet the unique needs of their workforces.”

​​​​​​​Why it’s important: Manufacturers have continued to offer high-quality health care plans to their employees—even absorbing cost increases in recent years to keep premiums affordable—but they “increasingly find their efforts to be responsible stewards of their health plans undermined by the complexities, bureaucracy and ineffective design of the broader health care system,” Crain told the committee.

What should be done: It is ERISA’s federal preemption of state and local laws that allows manufacturers to offer uniform health benefits, Crain continued, and that preemption must be preserved.

• “Eroding or eliminating preemption would make it significantly more difficult for manufacturers operating in multiple states to offer their employees health insurance because the manufacturer would be forced to comply with cumbersome and potentially conflicting state-based rules, a costly and untenable situation,” he said.
• In addition to maintaining ERISA preemption, Congress should seek to “make health care data more accessible and user-friendly for employer plan sponsors,” and reduce regulatory burdens on employers.
• Given that pharmacy benefit managers contribute to the increasing costs of providing employer-sponsored health care, the NAM also continues to call for PBM reform to increase transparency into these underregulated actors.

Washington, D.C. – Following a press conference today in which Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) called for pharmacy benefit manager reform, National Association of Manufacturers Managing Vice President of Policy Chris Netram released the following statement:

“Manufacturers stand with Chairman Wyden and Ranking Member Crapo in their calls for PBM reform as soon as possible. Manufacturers are committed to providing health benefits—with 93% of manufacturing workers eligible for employer sponsored health insurance—even as PBMs continue to drive an increase in health care costs. PBM reform, including in the commercial health insurance market, must increase transparency, ensure PBMs do not pocket manufacturer rebates and delink PBM compensation from the list price of medications.”

Background:

• As part of efforts to reduce health care costs for manufacturers and manufacturing workers, the NAM has advocated PBM reform consistently, including in the commercial health insurance market.
• PBMs increase health care costs at the expense of manufacturers and manufacturing workers by applying upward pressure to list prices that dictate what patients pay at the pharmacy counter, pocketing biopharmaceutical manufacturer rebates and failing to provide adequate transparency about their business models.
• The NAM supports reforms that will benefit employers by making PBM contracts more straightforward, transparent and predictable and workers by reducing the prices they pay out of pocket for their prescriptions.
• Last year, the NAM launched a six-figure television and digital advertising campaign calling for reforms to ensure PBMs pass on prescription drug discounts directly to workers and employers.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

With President Biden set to deliver the State of the Union address Thursday, manufacturing is likely to be in the spotlight once again. At the NAM, we will be listening closely for our key priorities—those that have been achieved and those still in progress. 

Promises kept: President Biden has been a partner on a range of issues that are key to manufacturers across the United States. We hope he will outline how pro-growth legislation has helped set the stage for manufacturing growth, with industry employment reaching a 15-year high.

• CHIPS Act: The CHIPS and Science Act marked a major push to boost manufacturers’ competitiveness, supporting large and small businesses up and down the supply chain by investing in domestic semiconductor production and funding programs to support the STEM workforce, advanced technology development, excavation of critical minerals, clean energy and more.

• Bipartisan Infrastructure Bill: President Biden secured a bipartisan $1.2 trillion infrastructure bill, a long-sought, major achievement for manufacturers throughout the country, offering transformational upgrades and significant investments in America’s manufacturing capabilities.

• Inflation Reduction Act: Some of the provisions in the Inflation Reduction Act supported manufacturers across the United States, with direct investments and tax credits generating a major increase in manufacturing construction and jobs.

• Ukraine: The Biden administration has been unwavering in its support of Ukraine. The NAM—which in March 2022 passed a unanimous resolution denouncing Russia’s invasion of the country—has kept the pressure on Congress to pass the stalled Ukraine aid bill.

Progress to come: But this progress will be undermined if the Biden administration continues to issue onerous regulations and call for policies that make it harder to innovate, invest and expand in America. The NAM is working hard to push back against items that would harm manufacturers and encourage the president to refrain from pursuing policies that will make us less competitive.

• Taxes: The NAM is pushing back against any new taxes or attempts to increase tax rates on manufacturers, and we are pressing for tax policies that will make it easier to invest in the future—including the “tax trifecta” found in the recently House-passed Tax Relief for American Families and Workers Act. The NAM urges the Senate to approve these business tax provisions quickly.

• Protecting intellectual property: Late last year the administration proposed invoking “march-in” rights to seize the patents of any products it deems too costly—if those innovations were developed in any part with federal dollars. This move, which would open the door to similar actions in other sectors of manufacturing, would undermine manufacturers’ IP rights, disincentivize early-stage entrepreneurship and dissuade capital investment, all of which could jeopardize our ability to develop future cures. This is just one example of how actions that undermine manufacturers’ IP can have dangerous unintended consequences.

• Regulations: Burdensome rules—such as the tighter National Ambient Air Quality Standards from the Environmental Protection Agency and the Department of Energy’s recent freeze of liquefied natural gas export permits—are preventing manufacturers from creating jobs and harming U.S. competitiveness. We need to end the regulatory onslaught and give manufacturers the chance to grow.

• Energy: Manufacturers in America are at the forefront of the planet’s work to reduce emissions and promote sustainable energy. But to be effective, we need to embrace an all-of-the-above energy strategy that uses the fuel we have while developing the tools we need.

• Immigration: Immigration and border security reforms must be a priority for the administration and Congress. Inaction poses significant economic risks—especially at a time when manufacturers have 600,000 open jobs. Manufacturers are leading on bipartisan solutions, like those found in our A Way Forward plan.

The last word: “Our commitment is to work with anyone, and I truly mean anyone, who will put policy—policy that supports people—ahead of politics, personality or process,” said NAM President and CEO Jay Timmons. “Because here’s what I know: Manufacturers are building an incredible future for our country and our world. And we need partners in the federal government who will work with us to reduce burdens on manufacturers and manufacturing workers, rather than creating barriers to our success.”

Learn more: For more information on the state of manufacturing, check out the 2024 NAM State of Manufacturing Address here.

The Biden administration’s proposed “march-in” framework would be devastating for American innovation and competitiveness and must be withdrawn immediately, according to the NAM.

What’s going on: In December, the administration issued proposed guidelines to enable the government to “march in” and seize manufacturers’ patents if their products were developed in any part with federal dollars.

• But the move—which a bipartisan group of 28 legislators opposed in a letter to the White House last week—would be fundamentally ruinous to manufacturing in the U.S., according to the NAM.
• “Undermining America’s world-leading patent system is a recipe for reduced innovation and significant economic damage, with a disproportionate impact on small manufacturers,” said NAM Vice President of Domestic Policy Charles Crain.

Price controls: The proposal is tantamount to government price controls, the NAM said.

• “If finalized, this threat to innovation would for the first time enable the government to set price controls on products that incorporate [intellectual property] from early-stage federally funded research.”
• “Manufacturers that do not comply with the proposal’s arbitrary and uncertain pricing criteria could see the government march in, seize their IP and license it to a competitor.”

Undoing advancements: Prior to the 1980 enactment of the Bayh-Dole Act, which allowed for the commercialization of federally funded research, groundbreaking discoveries “often remained stuck in the lab, as private-sector entrepreneurs and investors were unwilling to license innovative technologies given the uncertain path to commercialization,” the NAM said.

• “Limiting manufacturers’ ability to commercialize groundbreaking innovation means that early-stage research will remain on the shelf in university labs.”

Obesity is costing U.S. companies and their workers hundreds of billions of dollars a year, according to a new report, the findings of which are in line with those of a 2023 NAM report on employer-sponsored health care.

What’s going on: “Obesity and overweight are estimated to have caused a staggering $425.5 billion in economic costs to U.S. businesses and employees in 2023, according to a report released by GlobalData Plc, a leading data and analytics company,” MarketScreener reports.

• The findings of the GlobalData report, “Assessing the Economic Impact of Obesity on Employers: Identifying Paths Toward Work Force Health and Well-Being,” are consistent with those of a recent NAM report, “ Manufacturers on the Front Lines of Communities: A Deep Commitment to Health Care ,” which notes significantly higher health care costs for individuals who are obese or carry excess body weight.
• “These additional costs account for $170 billion to $200 billion in annual spending in the U.S., making [these conditions] a significant cost for employers,” according to the NAM report.

Why it’s important: Obesity can make workers more prone to absenteeism (taking time off) and presenteeism (being less productive while on the job), both of which come with a significant price tag, according to the reports.

• Some 46.1% of manufacturer respondents to an NAM survey said obesity affected their workplace productivity and employees’ ability to complete their job functions.
• Absenteeism costs employers $82.3 billion each year, with presenteeism accounting for an additional $160.3 billion, according to the GlobalData report.

Impact on manufacturing: The economic impact of excess body weight on manufacturing is the fourth highest of the seven industries examined by GlobalData, at $44.5 billion annually.

What can be done: Manufacturers care deeply about ensuring their employees have access to high-quality, affordable primary care providers who can help employees manage their weight through personalized interventions like diet, exercise, behavior modification, medications and surgery.

The last word: “Manufacturers support efforts to continue to destigmatize these chronic health challenges and approach them like any other condition so that workers and their families feel comfortable choosing from the full suite of available treatment options in order to live healthier and more productive lives,” said NAM Vice President of Domestic Policy Charles Crain.

Pharmacy benefit managers are contributing to the skyrocketing cost of health care for manufacturers and must be reined in—and that’s why the NAM supports the bipartisan Delinking Revenue from Unfair Gouging (DRUG) Act, passed yesterday by the House Oversight and Accountability Committee.

What’s going on: PBMs, created in the 1960s with the intention of keeping prescription drugs affordable, are now doing the very opposite, the NAM informed the committee ahead of Tuesday’s markup.

• PBMs “increas[e] the price that health plan participants pay for medicines,” NAM Vice President of Domestic Policy Charles Crain said. “By applying upward pressure to list prices that dictate what patients pay at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business models, PBMs increase health care costs at the expense of manufacturers and manufacturing workers.”

• In addition to other reforms, the DRUG Act would require “delinking”—ensuring that PBMs charge a flat rate for their services rather than charging a percentage of a medication’s list price. This critical reform would “remov[e] PBMs’ incentive to put upward pressure on list prices in order to maximize their own profits,” Crain said.

Why it’s important: The NAM—whose advocacy, including a six-figure ad campaign, helped lead the DRUG Act to passage by the House Oversight Committee—“has long favored delinking PBM compensation from the list price of medications, including in the commercial market,” Crain continued.

• The NAM will continue to advocate for PBM reforms that “will benefit employers by making PBM contracts more straightforward, transparent and predictable—and will benefit workers by reducing the prices they pay out of pocket for their prescriptions.”

Washington, D.C. – The National Association of Manufacturers has launched a seven-figure television and digital advertising campaign opposing the Biden Administration’s new proposal that would allow the government to march in and seize the rights to groundbreaking innovations developed by manufacturers.

“This radical new proposal is a major threat to manufacturers in America and counter to the president’s goals of growing the sector,” said NAM President and CEO Jay Timmons. “Empowering the government to march in and seize the rights to private-sector patents and technologies threatens American innovation and R&D, putting millions of well-paying manufacturing jobs at risk. Policymakers must protect manufacturers’ intellectual property rights and stop this government overreach.”

To view the latest television ad, click here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.75 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

The House passed a health care package on Monday that includes measures to curb some practices by pharmacy benefit managers, according to STAT News.

What’s going on: The Lower Costs, More Transparency Leadership Act, which passed on a bipartisan vote, “would equalize payment between hospital outpatient departments and doctors’ offices for administering medicines in Medicare, rein in some practices by pharmacy benefit managers and codify health care price transparency rules.” 

• The vote on the measure was scheduled for September originally but was pushed back amid a larger funding dispute.

What it means: The package would prohibit PBMs from “spread pricing”—or charging Medicaid more than they pay pharmacies for medications.

• It would also require PBMs, “clinical lab test providers, imaging providers [and] ambulatory surgical centers … to be more transparent about their pricing.”

What’s next: “Some community health advocates hope Monday’s vote will jump-start negotiations with the Senate, where leaders have signaled they’re looking for more than what’s in the House bill,” POLITICO reports.

Our view: “House passage of the Lower Costs, More Transparency Act is a step forward for PBM transparency, but Congress must continue to advance reforms that ensure PBMs pass on prescription drug discounts directly to plan sponsors and patients as well as delink their compensation from the list price of drugs,” the NAM said on Tuesday.