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Sept. 29, 2017


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ACA Repeal’s Roll of the Dice Meets Snake Eyes


Facing the September 30 deadline to use the reconciliation process (allowing a simple majority instead of 60), the Senate abandoned its latest efforts this week to repeal and replace parts of the Affordable Care Act (ACA). This most recent legislation aimed to roll back federal subsidies for healthcare and replace them with block grants to states. Named for the sponsors of the proposal, the Graham-Cassidy legislation is the latest failed Republican attempt at passing healthcare reform.

The repeal-and-replace attempt faced an array of challenges that, in the end, turned out to be insurmountable. Compounding the deadline and senators’ concerns over steep cuts to the Medicaid program, the Congressional Budget Office (CBO) had announced it would not be able to provide point estimates on the proposal’s effects for several weeks. The CBO did release a preliminary assessment projecting a deficit reduction of at least $133 billion, but at a cost of millions of people losing comprehensive healthcare insurance.

In the end, this healthcare reform attempt proved to be a tough pill to swallow for senators who were on the fence about the legislation. The bill’s authors released multiple iterations of the proposal in an attempt to attract enough “yes” votes from their Republican colleagues; however, senators indicated frustration that the bill was being rushed along with little time to review the different versions being released. Ultimately, Sen. Susan Collins (R-ME) announcing that she would join fellow Republican Sens. John McCain (R-AZ) and Rand Paul (R-KY) in voting “no” on the bill was the proverbial straw that broke the camel’s back.

With the stall of Graham-Cassidy, Congress will now shift its focus to tax reform, essentially putting an end to efforts for healthcare reform—for now, at least.


Biosimilar Coding—Could There Be Billions in Hidden Savings?


The finalized Medicare payment rule from the Centers for Medicare & Medicaid Services (CMS) for biosimilars creates a single, blended Medicare reimbursement rate for the biosimilars based on the average sales price (ASP) of all biosimilars to a reference product, plus 6% of the ASP for the reference biologic. Under the current policy, CMS estimates Medicare savings of $25 billion over 10 years.

Our reimbursement experts worked with the Biosimilars Forum and modeled alternative methodologies that could increase savings by an additional $15.1 billion, or 30% ($65.0 billion in total over 10 years). The study titled, “Estimating the Budgetary Impact of Biosimilar Coding Policies Under Medicare Part B,” demonstrates the need for changes in CMS reimbursement for biosimilars under Medicare Part B. Learn more




If at First You Don’t Succeed, Try a Totally Different Bill


Just give them an hour, and the Senate bounces back. After declaring the ACA-repeal efforts dead Tuesday, the Senate passed—by unanimous vote—the Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017, or CHRONIC Act (Senate Bill 870).

The bill, originally introduced in April by Sen. Orrin Hatch (R-UT), would:

  • Expand telehealth in Medicare Advantage accountable care organizations
  • Extend the CMS “Independence at Home” demonstration to 2 years and increase the maximum allowable number of Medicare beneficiaries in the program from 10,000 to 15,000
  • Expand the use of virtual care for stroke and dialysis patients

Hatch was upbeat about the bill’s passage in the Senate:

“The Finance Committee has been working hard to address and improve healthcare outcomes for Medicare beneficiaries with chronic conditions for the last two years. The CHRONIC Care Act is a culmination of a bipartisan, committee-wide effort, which included rigorous engagement and feedback from affected stakeholders. This legislation will improve disease management, lower Medicare costs and streamline care coordination services—all without adding to the deficit.”

On Wednesday, the CHRONIC Act was referred to the House Committee on Ways and Means and the Committee on Energy and Commerce.


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Medical Nutritional Therapy: Achieving Reimbursement Across the Globe for Unique Non-drug Therapy Options

Medical nutritional therapy (MNT) is intended to meet specific nutritional requirements of a disease or condition that cannot be met by normal foods alone and should be used only under medical supervision. MNT can serve as the sole source of nourishment for prolonged periods, with balanced nutritional composition of macro- and micro-nutrients that reflect dietary recommendations. We examine the reimbursement landscape for this non-drug therapy option. Learn more




Like Squeezing Blood From a Turnip, EO on Insurance in the Works


On Wednesday, President Trump told reporters he is working on a “very major” executive order (EO) to allow the purchase of health insurance across state lines.

While few details are available (“people can…do lots of things,” is a little vague), President Trump has expressed interest in allowing insurance companies to offer plans that cross state lines. And Sen. Rand Paul (R-KY) has been touting a plan to permit individuals to buy insurance from other states. Both sound like progress in the quest to lower premiums for beneficiaries, but it is unclear if an EO on either of these 2 ideas would change anything.

Ironically, the ACA allows companies to sell insurance across state lines, but the Department of Health and Human Services (HHS) has not issued the regulations to develop “interstate health care choice compacts.” The National Association of Insurance Commissioners said the idea that cross-state sales would bring about lower premiums was a “myth.” Insurers need to comply with the regulations of each state and build provider networks in the different states. These networks need to be large enough to satisfy patients who are looking for plans but also be competitive in provider reimbursement so plans can manage premiums. And, it is unclear if simply allowing beneficiaries to purchase insurance from other states would be beneficial; it raises questions about networks and coverage that require additional information to assess feasibility.

The EO sounds like it could be used to drive progress, but it doesn’t advance the country toward a solution about how to balance cost, coverage, and access. Another not-so-minor detail is that an EO does not create binding federal law (nor change the state laws that dictate insurance coverage); it is more of a directive to federal agencies to act. More to come!


Drowning in a Risk Pool, Anthem Blames Rx Drug Utilization


For 2018, Anthem has proposed an average 35% rate increase affecting its 135,000 Covered California exchange policyholders. Anthem has justified the rate hike to accommodate, in part, an expected 30% increase in prescription costs next year.

Notably smaller are drug-cost increases projected by the 2 other key players in California, Blue Shield (at 16.4%) and Health Net (at 15%), both of which are attributing the premium increases to price inflation. Anthem, however, is emphasizing an expected growth in drug utilization by its shrinking group of policyholders. As recently as August, the payer announced withdrawing from half of California’s counties.

California’s regulator insurance agency said while it will likely review Anthem’s decision, it lacks the authority to halt the rate increase.


Like Chartering Private Planes, UDIs Can Have Unintended Consequences


As reported in the October issue of the Journal of Managed Care & Specialty Pharmacy (JMCP), an observational study examined the impact of the Food and Drug Administration’s (FDA) Unapproved Drug Initiative (UDI) on the cost and supply of qualifying products. The initiative mandates that manufacturers of unapproved drugs prove their safety and efficacy (ie, voluntary approval) or be removed from the market. Hundreds of unapproved drugs are currently marketed in the US, most of which were introduced before 1938.

An examination of drug categories in which at least 1 unapproved drug faced UDI regulatory action revealed the cost for the lowest-priced drug in the category increased by a median of 37% in the 2 years after the UDI action or voluntary approval. In the subset of cases where manufacturers were sent UDI warning letters for drugs later approved, the price of the drug increased a median of 122%. Further, shortages for drug categories with at least 1 drug facing UDI action increased both in terms of number of shortages (17 vs 25) and median length of shortage (31 days vs 217 days).

The UDI appears to have the unintended effect of increasing costs and shortages regardless of whether a drug under scrutiny faces UDI action or receives voluntary approval. It is suggested, in all cases, that price and shortage increases are a result of decreased competition. Unapproved products drop out of the market, either because they face UDI action or because they cannot compete with a comparable product receiving recent voluntary approval.

The authors provide recommendations for correcting this situation while maintaining the UDI’s intended purpose of ensuring the safety and efficacy of available drugs. The recommendations mostly aim to increase competition as the mechanism to decrease prices, mirroring FDA Commissioner Scott Gottlieb’s Drug Competition Action Plan.


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:

  • For the third time, the Health Resources and Services Administration has postponed implementation of the 340B Drug Program final rule that would set a ceiling price for participating drug companies and clarify how civil monetary penalties would be imposed. Those policies will now start on July 1, 2018.
  • A Health Affairs blog post discusses why real-world evidence is useful as a complement to randomized controlled trials.
  • The Commonwealth Fund publishes an issue brief that assesses the expected benefits and limitations of outcomes-based pharmaceutical contracts in the US, including their potential impact on prescription drug spending.
  • Next Tuesday (October 3), the House Energy & Commerce Committee’s Health Subcommittee will host a hearing titled, “Examining Patient Access to Investigational Drugs.”
  • AbbVie denied a report it would consider dropping its January 2017 pledge to keep all drug price increases in 2017 under 10%.

“The health care system isn’t set up for this type of economic model [paying for KYMRIAH™ (tisagenlecleucel)‎, America’s first commercial gene therapy, priced at $475,000]….

Ultimately, Express Scripts believes gene therapies will require payment and patient care systems which are as novel as the medications themselves. Ideas on the table include paying for a treatment over time, establishing insurer risk pools and financing one-time payments. A successful model must address patients who change insurers or employers, and tracking their health outcomes over time to ensure payments aren’t being made if the treatment stops being effective.”


– Steve Miller, MD, Express Scripts’ Chief Medical Officer, commenting on the need to develop a new payment model for gene-therapy treatments

Source: “Gene Therapy Holds Great Promise, But Big Price,” Express Scripts, September 21


47.2% | 34.7%


In the first year of PCSK9 inhibitors’ availability, only 47.2% of patients prescribed PCSK9 inhibitors received insurance approval for therapy, and of those, 34.7% never filled the prescription from the pharmacy. Prescription abandonment was largely explained by out-of-pocket cost.

Source: “Association of Prior Authorization and Out-of-pocket Costs With Patient Access to PCSK9 Inhibitor Therapy,” JAMA Cardiology, September 27


Cell & Gene Meeting on the Mesa

October 46 l LaJolla, CA
The Cell & Gene Meeting on the Mesa is a 3-day conference bringing together senior executives and top decision makers in the industry with the scientific community to advance cutting-edge research into cures. World Courier, part of AmerisourceBergen, is proud to be a Gold Sponsor of this unique event. The meeting features a nationally recognized Scientific Symposium, attended by leading researchers and clinical experts from around the globe, in conjunction with the industry’s premier annual Partnering Forum, the first event of its kind dedicated solely to facilitating connections in this sector. Learn more


AMCP Nexus 2017

October 1619 l Dallas, TX
Join Xcenda at this year’s AMCP Nexus 2017 conference in Dallas, TX. AMCP Nexus 2017 will explore perhaps the most transformative change taking place in healthcare: how we pay for healthcare and the emergence of value as the defining factor and goal. Xcenda’s team of experts can help you navigate the value landscape and maximize access for your product. Visit Xcenda’s booth in The Exchange at #503, or contact us to schedule a meeting at the conference. Learn more


13th Annual Personalized Medicine Conference

November 14–16 l Boston, MA
Join Jennifer Snow, MPH, Director of Health Policy, at the 13th Annual Personalized Medicine Conference in Boston as she moderates a panel titled, “Precision Valuation: A Discussion of How Value Assessment Frameworks Can Account for Personalized Medicine.” Learn more


Jennifer Snow
Health Policy

Scott Shields
Associate Director,
Health Policy



Peyton Howell, MHA
President | Global Sourcing & Manufacturer Relations | AmerisourceBergen Corporation

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

Tommy Bramley, PhD, RPh
President | Xcenda

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 GaiserStewart Kaufman | Scott Shields | Jennifer Snow | Stephen Wilson


Laurie Kozbelt | Ellen Olson


Sept. 29, 2017


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