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Mar. 23, 2018


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I am Serious. And Don’t Call me Shirley: Gov’t Funded for MONTHS.


On Wednesday, the House of Representatives released the consolidated appropriations bill for fiscal year (FY) 2018 (HR 1625). The massive $1.3 trillion spending package will fund the federal government through the remainder of the fiscal year. The House and Senate passed the bill and it was signed by President Trump this afternoon.

In the bill, the Department of Health and Human Services (HHS) receives $78 billion in funding, a $10 billion increase from FY 2017. The Centers for Medicare & Medicaid Services (CMS) receives $4 billion (same as last year), and the Food and Drug Administration (FDA) receives $5.1 billion in funding, a $483 million increase over last year.

Most notable about the omnibus bill is what was excluded. The bill does not include 2 hotly contested provisions: first is the Affordable Care Act (ACA) exchange stabilization package, which would create and fund a reinsurance program while enacting changes to grant more state flexibility under the ACA’s Section 1332 waiver program. The second measure to be excluded is reduction of the pharmaceutical industry’s share of Medicare Part D donut-hole costs. The Balanced Budget Act of 2018 increased the industry’s responsibility in the coverage gap from 50% to 70%. The industry lobbied unsuccessfully to scale back the contribution level. Xcenda estimates that at 70%, the coverage gap discounts will cost manufacturers an additional $37 billion dollars over their previous exposure under the ACA-mandated 50% discounts.

Included is a provision to extend Medicare hospital outpatient pass-through payments for 2 years; however, the extension only applies to products for which pass-through payments ended December 31, 2017 and for which payment was packaged as part of a covered hospital outpatient department service beginning in 2018. Less than 2 dozen products are estimated to benefit from this change.

Xcenda Original Research

Our Perspective: Question Everything


A recent retrospective observational study published by The BMJ asserts that the National Comprehensive Cancer Network (NCCN) guidelines support off-label use of oncology drugs with weak evidence. The authors further argue that these off-label recommendations by NCCN translate into Medicare and private payer coverage (and payment) without evidence to support the outcomes. As we read the study, something did not sit right with us, so we dug in.

The study reviewed new hematology and oncology drugs approved from 2011 to 2015, assessed if the March 2016 NCCN Guidelines expanded their use compared to the labels, then reviewed the evidence cited for the off-label use as an aggregate. For the 47 drugs approved during the pre-determined timeline, NCCN Guidelines had information for 113 uses, 69 (61%) of which were on label and 44 (39%) of which were off label.

The first thing we noticed is that The BMJ study reviewed the NCCN Guidelines and not the NCCN Drugs & Biologics Compendium. The guidelines do not align 100% to the compendium. The guidelines also do not provide the ratings associated with each use; therefore, the study can mistakenly be considering an off-label use with a very low level of evidence as approved for use when, in fact, it could have a “not recommended” rating that is not reimbursed by most payers.

Second, the study ignores the one-strike, you’re-out-of-Medicare-reimbursement rule. Just because a listing has a positive rating in the NCCN Compendium does not mean the other 4 compendia agree—and 1 negative rating will negate any and all other compendia positive ratings (meaning the product does not get reimbursed by Medicare).

Third, aggregating evidence for all oncology and hematology off-label indications undermines a key reason why compendia are so useful; small disease states are harder to conduct randomized phase 3 trials on, and some smaller disease states have no other treatment options available. Overall, based on Xcenda’s experience in this space, NCCN typically relies on a higher level of evidence or an aggregate of more small studies compared to other compendia.

Fourth, providing access to an off-label use of a drug does not equate to definitive use. Clinicians typically evaluate drugs independently of compendia—and then leverage compendia as a resource. The only way to know if the off-label use recommended in the compendia results in usage is to conduct a claims analysis of these products and to compare the off-label and on-label treatment regimens.

Fifth, many NCCN Guidelines contain several hundred supporting references, and their Compendium listings and ratings are the most nuanced and contain the most specific information about each recommendation compared to the other compendia. It is not surprising, then, that NCCN does not always cite the literature supporting a recommendation.

Overall, clinical compendia recommendations for off-label use in oncology and non-oncology provide valuable treatment options for patients, particularly those in small disease states that may be prohibitive logistically from having large-scale clinical trials conducted. In some disease states, these options may be racing against time and following the failure of other typical treatment regimens, thus informing providers and patients of treatment options and providing hope.


Payer Tactics to Manage Commercial Copay Assistance


The prices for brand-name prescription drugs—particularly those products deemed as specialty drugs—continue to soar, leading to health insurance plans in the commercial (private market) sector exploring ways to manage these drugs more aggressively.

Patients may end up bearing the brunt of these market dynamics, often facing high out-of-pocket (OOP) costs for these drugs. Xcenda examines the payer tactics to manage copay assistance in a new issue brief. Download now



Show Me the Money: Drug Price Transparency in Oregon


Last week, Oregon joined the ranks of states requiring drug-price transparency with the Prescription Drug Price Transparency Act (HB 4005). Oregon’s law is believed to be the first that requires reporting information for manufacturers’ patient assistance programs and also to require documentation of non-United States (US) prices for the qualifying drugs. It further requires additional reporting for new specialty drugs.

Oregon’s Prescription Drug Price Transparency Act requires manufacturers to report annually on any drug with a wholesale acquisition cost (WAC) of $100 or more for a 1-month supply or course of treatment lasting less than 1 month, with a WAC increase of 10% or more during the previous calendar year. The first reports are due July 1, 2019, then by March 15 of every year thereafter.

Reporting Requirements for Drugs With Qualifying Price Increases
Among other information that must be submitted as part of the annual report, manufacturers must include:

  • Factors that contributed to the price increase
  • Direct costs incurred by the manufacturer to manufacture, distribute, and market the drug and for ongoing safety and effectiveness research associated with the drug
  • Total sales revenue for the drug during the previous calendar year
  • 10 highest prices paid for the drug during the previous calendar year in any country other than the United States
  • Documentation necessary to support the information provided in the report

Reporting Requirements for Associated Patient Assistance Programs
For each of the prescription drugs identified in the annual report, manufacturers must also submit information about associated patient assistance programs offered by the manufacturer to Oregon consumers, including:

  • Number of consumers who participated in the program
  • Total value of coupons, discounts, and copayment assistance or other reduction in costs provided to program participants in Oregon
  • Number of refills that qualify for the program (for each drug, as applicable)
  • Period of time the program is available to each consumer (if the program expires after a specified period of time)
  • Eligibility criteria for the program and how eligibility is verified

Reporting Requirements for New Specialty Drugs
Effective March 15, 2019, the law requires that within 30 days of introducing a new prescription drug with a WAC exceeding the Medicare Part D threshold for specialty drugs (currently $670 per month), a manufacturer must report the following information:

  • Description of the marketing used in the introduction of the drug
  • Methodology used to establish the price of the drug
  • Whether the FDA granted the drug a breakthrough therapy designation or priority review
  • If the drug was not developed by the manufacturer, the date and price paid for acquisition of the drug

Health insurers are also subject to new reporting requirements; they must submit to the state information about their most frequently prescribed drugs, most costly drugs, drugs causing the greatest increase in total plan spending, and the impact of prescription drug costs on premium rates.

According to The National Academy for State Health Policy, there are 51 state bills on transparency legislation as of March 19. We will continue to report on significant new state laws in Health Policy Weekly. In the meantime, Lash Group is prepared to assist their manufacturer partners in reporting the number and period of time that Oregon residents have participated in the manufacturers’ programs, the total value of copay or coupon assistance, and quantity of refills provided to Oregon-based consumers. Manufacturers should ensure their other service providers and internal business functions are also prepared to meet these reporting requirements.


Legislative Bytes


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Prior Auth: I Wish I Knew How to Quit You


On Monday, the American Medical Association (AMA) published results from a survey of 1,000 physicians that evaluated the impact of prior authorizations on patients and physician practices.

Almost two-thirds (64%) of physicians reported waiting at least 1 business day for prior authorization decisions, and approximately one-third (30%) reported waiting 3 business days or longer. Because of these extensive wait times, 92% of physicians reported that prior authorizations resulted in care delays for patients, and 78% of physicians reported that prior authorizations can result in treatment abandonment by patients. Additionally, the problem may be getting worse, with 86% of physicians reporting that prior authorization burdens have increased over the past 5 years. The survey found that physicians receive an average of 29.1 prior authorization requests per week, and processing those requests takes an average of 14.6 hours per week.

The AMA is working with the American Hospital Association, America’s Health Insurance Plans, American Pharmacists Association, Blue Cross Blue Shield Association, and Medical Group Management Association on a project to improve prior authorization processes and lower administrative burdens. Additionally, the AMA is working with Anthem to streamline prior authorization requirements.


The Dude Abides…to Paying for DNA Sequencing


In an effort to advance innovative personalized medicine for Medicare patients with cancer, CMS announced it will cover diagnostic laboratory tests using next-generation sequencing (NGS) for patients with advanced cancer (ie, recurrent, metastatic, relapsed, refractory, or stage III or IV cancer).

This decision was made following the parallel review with the FDA, which granted its approval of the FoundationOne CDx (F1CDx™) test on Nov. 30, 2017. At the same time, CMS issued a proposed national coverage determination for NGS cancer diagnostics. F1CDx is the first breakthrough-designated, NGS-based in vitro diagnostic test that is a companion diagnostic for 15 targeted therapies; it can also detect genetic mutations in 324 genes and 2 genomic signatures in any solid tumor.

In addition to covering the FDA-approved F1CDx, CMS will cover FDA-approved or cleared companion in vitro diagnostics when the test has an FDA-approved or cleared indication for use in that patient’s cancer. Coverage determinations for laboratory-developed tests that have not been approved or cleared will be left up to local Medicare Administrative Contractors.


Fasten Your Seatbelts, It’s Going to be a Bumpy Night Fight


Last week, the American College of Rheumatology (ACR) collaborated with 8 other national physician specialty organizations in penning a letter  in response to concerns over several recent drug-pricing policy proposals included in the President’s 2019 Budget and the Reforming Biopharmaceutical Pricing at Home and Abroad Council of Economic Advisers’ drug plan.

The letter, addressed to HHS Secretary Alex Azar, advised against moving Medicare Part B drug coverage under the Part D program and expressed concerns over policies that would increase Medicare Part D plan formulary flexibility to limit or reduce coverage. The groups argued that these policies will increase healthcare costs for patients and limit access to care.

Additionally, the letter warned against a 3% reduction in physician reimbursements above the average sale price (ASP) for new drugs. The administration has actually advocated for a reduction in payments for new Part B drugs from 106% of wholesale acquisition cost (WAC) to 103% of WAC—not ASP—but the sentiment remains.

To protect against rising drug costs and increase patient access to care, the physician groups suggested the following: 

  • Require Medicare Part D plans to apply a substantial portion of rebates at the point of sale
  • Establish a beneficiary out-of-pocket maximum in the Medicare Part D catastrophic phase to provide beneficiaries with better protection against high drug costs
  • Decrease the concentration in the pharmacy benefit manager (PBM) market and other segments of the supply chain
  • Provide guidance from CMS on how drug-related value-based contracts and price reporting would affect other price regulations

Both Azar and President Trump have said recently that there will be an Executive Branch initiative in “about a month” to address drug prices. (See this week’s Heard On The Street below.) Though no details have been provided about what policies might be brought forward, it is likely that they will draw from the budget proposal, the Council of Economic Advisors’ white paper, and the Economic Report of the President. As you might imagine, we’ll be all over it and will provide you an update ASAP.


Information Buffet (AKA, Other Stuff That Caught Our Attention)


We kept running into stories we wanted to bring to your attention, so here’s a quick hit list of other news we thought you should know:


“We’re going to be rolling out, as you mentioned, in about a month, a whole slate of other proposals around how we decrease the price of drugs and how we bring discounts that the middlemen right now are getting; how those will go to our patients, to individuals.”


– HHS Secretary Alex Azar, speaking with President Trump in New Hampshire on efforts to combat the opioid crisis

Source: “Remarks by President Trump on Combating the Opioid Crisis,” March 19




Premiums for the lowest-priced silver plans in each region increased an average of almost one-third nationally from 2017 to 2018 for a 40-year-old nonsmoker

Source: “Changes in Marketplace Premiums,” Robert Wood Johnson Foundation, March 21


AMCP Managed Care & Specialty Pharmacy Annual Meeting

April 23–26 l Boston, MA
Join AmerisourceBergen companies, US Bioservices and Xcenda, at AMCP’s Annual Meeting at the Boston Convention and Exhibition Center, April 23–26. Meet with our specialty pharmacy and commercialization experts at the largest gathering of managed care professionals who work, lead, and innovate in the ever-changing world of pharmaceutical management. Visit AmerisourceBergen at booths 316 and 321. Learn more


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Count on Health Policy Weekly for an at-a-glance view of legislative and regulatory developments and news that impacts the healthcare industry.


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Jennifer Snow
Senior Director,
Health Policy

Scott Shields
Associate Director,
Health Policy



Peyton Howell, MHA
Executive Vice President & President, Health Systems & Specialty Care Solutions | AmerisourceBergen Corporation

Amy Grogg, PharmD
Senior Vice President | Strategy & Commercialization | AmerisourceBergen Corporation

Kristine Flemister, PharmD
President | Xcenda

Tommy Bramley, PhD, RPh
President | Lash Group

Stacie Heller
Vice President | Government Policy | AmerisourceBergen Corporation

Rita Norton
Senior Vice President | Government and Public Policy | AmerisourceBergen Corporation

Ana Stojanovska
Vice President | Reimbursement & Policy Insights | Xcenda


Andrew Gaiser | Maureen Holmes | Shannon Morrow | Scott ShieldsDiane Wilson | Linnea Tennant


Kylie Matthews | Ellen Olson

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Mar. 23, 2018


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