Maryland bill on prohibiting generic “price gouging” becomes law. Learn more.

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June 2, 2017

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FEATURED STORY
 

Feeling Crabby: Maryland Gets Cracking on Generic Pricing

 
 

In Maryland, a bill to prohibit manufacturers from “price gouging” generic drugs quietly became law last week as Governor Larry Hogan (R), by not signing or vetoing the bill, allowed the legislation to be enacted. It becomes effective on October 1, 2017.

As discussed in Health Policy Weekly last month, House Bill 631 (HB 631) will require generic drug manufacturers to notify the state’s Attorney General of any planned price increase, to provide specific details within 20 days of a request from the state, and to include reasons for the price increase. The Attorney General could also order pharmaceutical manufacturers to turn over documents associated with the price increase to see if the hike violates the law (ie, greater than 50% of the drug’s current list price). The Attorney General would be authorized to levy a $10,000 civil penalty for each violation.

Though the law is limited in scope to generic drugs, it does exert some price-control mechanisms and serves as a warning to the pharmaceutical industry about increasing prices. In that respect, HB 631 is certainly emblematic of the times as many other states attempt to enact legislation aimed at moderating drug prices.

 

AmerisourceBergen’s Dave Picard, VP of Biosimilars and Injectables, Speaks on the Shortage of Generic Drug Manufacturers in Pharmaceutical Processing

 
 

Generic Market at or Near Plateau?

Why is there a shortage of generic drug manufacturers, even as demand increases? In a second Pharmaceutical Processing article, David Picard, Vice President of Biosimilars and Injectables, speaks to this concern and outlines challenges related to increased enforcement activities by the FDA and competitors driving down prices. Read more

 
 

 
LEGISLATIVE UPDATES
 

As Quicksand Closed, a Lifeline Appeared for California’s Single-Payer Effort

 
 

Last week, California’s Senate Appropriations Committee issued a cost analysis of the state’s effort to enact a single-payer system that threatened to doom it.

The committee determined that The Healthy California Act (SB-562) would cost about $400 billion annually, with up to half of that money coming from a new payroll tax on workers and employers. Even after accounting for an estimated $200 billion from current state-run health programs that would be redirected to the single-payer program, the state would have needed to raise $200 billion annually.

Considering that this year’s state budget for health and human services is $141 billion, implementing a single-payer healthcare system would have required more than doubling the state’s current tax burden. The analysis presented to Californian lawmakers last week suggested a 15% increase to the state’s payroll tax to provide the necessary revenue, which would have likely killed the initiative.

But then walked in a team of economists from the University of Massachusetts-Amherst. Commissioned by National Nurses United (an umbrella group of the bill’s main sponsor, the California Nurses Association), the economists released an economic analysis of SB-562 estimating it would cost a more palatable $330 billion a year. And, in contrast to the 15% payroll tax proffered by the Appropriations Committee, the financial analysis also proposed 2 new taxes to pay for the system:

  • A new 2.3% sales tax, except on basic living expenses such as housing, groceries, and utilities
  • A new 2.3% excise tax on gross business receipts (the first $2 million in receipts are exempted)

“This new analysis doesn’t change the fact that a single-payer healthcare system is unaffordable and would be incredibly disruptive to the 90% of California’s residents who currently have health insurance,” said Charles Bacchi of the California Association of Health Plans.

The state Senate passed SB-562 yesterday by a vote of 23-14. It now goes to the state Assembly and, if advanced, to Governor Jerry Brown (D).

Single-payer efforts have failed in recent years due to the crushing taxes needed to be imposed to finance them. California’s program, while likely still a longshot, exists in a political climate that seems poised to show the federal government that they can be independent.

 

Keeping the Exchanges Within Reach

 
 

This week, Representatives Kevin Cramer (R-ND) and Doris Matsui (D-CA) sent a letter signed by a bipartisan majority in the House of Representatives urging Health and Human Services (HHS) Secretary Tom Price to issue a regulation that would add to the list of entities authorized to provide premium and cost-sharing assistance for patients enrolled in a Qualified Health Plan (QHP) through the marketplace.

In February 2014, the Centers for Medicare & Medicaid Services (CMS) issued a list of frequently asked questions (FAQ), titled “Third Party Payment of Qualified Health Plan Premiums,” clarifying that CMS only allows charitable assistance for policy premiums from certain organizations, such as tribal organizations and the Ryan White HIV/AIDS Program, but the list is not inclusive of all charitable organizations.

The letter from Cramer, et al, states this guidance (mistakenly characterized in the letter as interim final rule with comment CMS-8943-IFC) encourages QHPs to discriminate against patients with rare diseases, chronic illnesses, and other conditions by rejecting them if they receive premium and cost-sharing assistance from a nonprofit organization, and calls for additional rules to allow other entities to provide premium assistance for QHP enrollees. Specifically, the letter requests the addition of nonprofit charitable organizations, places of worship, and local civic organizations to the list of entities authorized to provide assistance for policy premiums.

 

Payer Perceptions and Utilization of ICER Value Assessment Framework

 
 

Xcenda Original Research

The Institute for Clinical and Economic Review (ICER) was established as an independent, nonprofit organization that evaluates the value and affordability of drugs and other therapies. It takes a broad societal approach to evaluate comparative clinical effectiveness evidence to estimate value and affordability. While ICER has gained both praise and criticism, limited evidence has been gathered to evaluate stakeholder perceptions and utilization of the ICER framework.

We wanted to know more. Did payers use ICER reports? What were the strengths of its evaluations, and what were the limitations? Our survey findings illustrate the impact that the ICER framework has had on payer decision making.

 
 

 
REGULATORY UPDATES
 

How Do Printers, Pharmaceuticals, and Patents Connect?

 
 

On Tuesday, by reversing a lower-court ruling, the US Supreme Court moved to restrict the rights of US patent owners in a landmark case of considerable concern for domestic pharmaceutical companies.

Concerning the resale of toner cartridges in Impression Products v. Lexmark International, the Court asserted under the “first sale” or “patent exhaustion” doctrine that regardless of contract restrictions, when a patentee sells a product they can no longer claim any patent rights to the item in the US or internationally, regardless of any restrictions the patent holder attempts to impose.

The Biotechnology Innovation Organization (BIO) issued a press release criticizing the decision, stating, “The biotechnology industry is overwhelmingly comprised of small companies that rely on the stability and dependability of the patent system to bring innovative technologies to market. We fear this ruling will undermine that stability.”

Though the case involved the resale of toner cartridges, the biopharmaceutical industry was watching because of the potential repercussions on the reimportation of drugs. The Supreme Court’s finding does not mean we should expect drug reimportation imminently, however, as the drugs are still held to the Food and Drug Administration’s (FDA’s) labeling requirements and other regulations. Nevertheless, a potential roadblock to reimportation has been removed.

 

The Times, They Are a-Changin’… and So May APM Evaluation Designs

 
 

As the federal government implements more alternative payment models (APMs), the Center for Medicare and Medicaid Innovation (CMMI) will need to carefully consider the approach to evaluating the models, according to an article in Health Services Research.

The authors assert that, as more APMs are rolled out, there will be fewer “pure” groups (ie, groups not influenced by other interventions) available for comparison against new payment models. To address this dilemma, they suggest an alternative to evaluating APMs that will:

  • Not differ much in cost and complexity of current single-model experimental or quasi-experimental designs
  • Allow CMMI to test multiple payment model variations simultaneously

The authors’ alternative evaluation approach is called the “factorial design.” Factorial research designs are “randomized designs that test multiple versions of a model simultaneously.” For example, a payment model is varied by elements such as the maximum in shared savings, the level of financial risk, and the payment amount for achieving quality standards. Each element consists of a high and low option. Instead of the provider self-selecting into various payment models, providers are randomly assigned to one of the possible combinations of incentive levels for each element of the model. The overall effect of each element is then analyzed by comparing the outcomes of providers with the high option for the element compared to the outcomes of providers with the low option for the element, as illustrated in the following table:



The authors believe factorial designs are a way for CMMI to evaluate multiple components of APMs while also understanding how the components interact.

Robust, unbiased, and timely evaluations of APMs are crucial for determining the path forward for future program development. The results of these evaluations will impact the decision to modify, expand, or discontinue CMMI initiatives and, thus, impact the progress toward CMS’ goal of lowering healthcare costs while improving quality.

 

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:

  • Slow Ride, Take it Easy: CMS has delayed until January 1, 2018 implementation of mandatory Medicare Episode Payment Models (for acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment procedures), the Cardiac Rehabilitation Incentive Payment Model, and certain changes to the Comprehensive Care for Joint Replacement Model.
  • That Old Chestnut: Premier released 9 policy recommendations designed to stimulate competitive markets for pharmaceuticals.
  • Sign of the Times: AstraZeneca and Harvard Pilgrim Health Care signed 2 outcomes-based contracts for the diabetes drug BYDUREON® (exenatide) and the blood thinner BRILINTA® (ticagrelor).
 
HEARD ON THE STREET
 

“While FDA does not play a direct role in drug pricing, we can take steps to facilitate entry of lower-cost alternatives to the market and increase competition. This is especially true when it comes to safe and effective generic medicines.

 

“FDA has an important role to play in preserving the balance between innovation and access and making sure its statutory and regulatory processes are working as intended and not being manipulated in ways that FDA and Congress didn’t intend.”

– Scott Gottlieb, FDA Commissioner, speaking at the House Appropriation Committee’s FDA budget hearing, May 25

 
POLICY BY NUMBERS
 

70%

 

70% of drugs approved in 2015 were through at least one of the FDA’s accelerated approval pathways: Breakthrough Therapy, Accelerated Approval, Priority Review, or Fast Track designation.

Source: QuintilesIMS Institute, Global Oncology Trends 2017, June 1

 
UPCOMING MEETINGS & CONFERENCES
 

2017 ASCO Annual Meeting

June 2–6 l Chicago, IL
Join leaders and experts from AmerisourceBergen at ASCO’s Annual Meeting in Chicago. This meeting brings together more than 30,000 oncology professionals from around the world to discuss state-of-the-art treatment modalities, new therapies, and ongoing controversies in the field. Visit AmerisourceBergen’s booth at #6135. Learn more

 

HDA 2017 Business and Leadership Conference

June 11–14 l Phoenix, AZ
HDA’s Business and Leadership Conference (BLC) is the healthcare distribution industry’s signature annual conference. The conference brings together high-level executives and influencers across the healthcare supply chain to hold strategic business discussions on the industry’s most pressing issues. AmerisourceBergen’s John Wernicki, Senior Director of Strategic Accounts, will join a panel titled, “Ask the Distributors: How Personalization Works,” on June 12 from 11:45 AM–3:30 PM to provide tips on how to help the independent pharmacy channel grow its front end and drive a more profitable business mix. Learn more

 

2017 BIO International Convention

June 19–22 l San Diego, CA
Join experts from World Courier and Xcenda at the 2017 BIO International Convention in San Diego. This annual conference, hosted by the Biotechnology Innovation Organization (BIO), is the largest global event for the biotechnology industry and attracts the biggest names in biotech. Visit the World Courier booth at #5408. In addition, Jennifer Snow, MPH, Director of Health Policy at Xcenda, will participate on a panel titled, “The Whole Picture: Consideration of Personalized Medicine in Value Assessment Frameworks” on June 22 at 10:15 AM PT. Learn more

 

ThoughtSpot 2017

July 19–22 l Las Vegas, NV
ThoughtSpot, the annual conference and trade show by Good Neighbor Pharmacy, is a 4-day event for independent community pharmacies where you’ll receive practical and clinical education to help you diversify your revenue streams and optimize your core business, plus exclusive deals and discounts on product purchases. The insights and expertise you’ll experience at ThoughtSpot will help you build a better business, find growth opportunities, and maintain your status as a preferred healthcare destination in your community. Learn more

 

2017 Pharmaceutical End-to-End Supply Chain Management Summit
4th Annual Specialty Network Design and Channel Optimization Summit

July 24–25 l Philadelphia, PA | Part of Pharma4
Matt Sample, Senior Director, Secure Supply Chain at AmerisourceBergen, will present, “Utilize Serialization and Traceability Data to Ensure End-to-End Supply Chain Visibility.” He will discuss standardized product packaging and serialization, show how to integrate data standards within the commercial supply chain for enhanced visibility, and review the methods to secure the data and ensure interoperability throughout the end-to-end supply chain. Donna Gilbert, Vice President, Specialty and Branded Strategic Accounts, Global Sourcing and Manufacturer Relations, AmerisourceBergen, will also contribute insights on the Stakeholder Roundtable titled, “Collaborate to Achieve Streamlined Approaches to HUB Design and Channel Optimization.” Learn more

 

4th Annual Patient Support Services and HUB Design Summit
2017 Patient Services Compliance Summit

July 24–25 l Philadelphia, PA | Part of Pharma4 
Join Derek Cothran, Vice President, Strategic Account Management at Lash Group, as he presents a session titled, “Achieve Brand Goals With the Optional Approach to Patient Support Services and Product Distribution.” Donna Gilbert, Vice President, Specialty and Branded Strategic Accounts, Global Sourcing and Manufacturer Relations, AmerisourceBergen, will also contribute insights on the Keynote Stakeholder Roundtable titled, “Internal Big Picture: Explore Strategies Used to Ensure Patient Centricity Through HUB Design, Channel Optimization, Compliance, and Distribution.” Learn more

 

The Bioprocessing Summit

August 21–25 l Boston, MA
World Courier, part of AmerisourceBergen, is proud to be a sponsor of The Bioprocessing Summit 2017. In its ninth year, the conference focuses on upstream and downstream processing, analytical development and quality, formulation and stability, cell and gene therapy production, and manufacturing. Visit World Courier at booth #308. Learn more

 
 
IN THE NEWS
 

Generic Market at or Near Plateau?

Pharmaceutical Processing, May 17, 2017
Why is there a shortage of generic drug manufacturers, even as demand increases? In a second Pharmaceutical Processing article, David Picard, Vice President of Biosimilars and Injectables, speaks to this concern and outlines challenges related to increased enforcement activities by the FDA and competitors driving down prices. Read more

 

New Science Energizes the Cancer Market

Pharmaceutical Commerce, May 17, 2017
Xcenda’s Kasia Shields, PharmD, MBA, Director of Medical Communications, and John Kalada, Senior Director of Commercial Client Strategies, provide insights on the rise of immunotherapies in the May/June issue of Pharmaceutical Commerce. Read more

 
 

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

 
 
 
 
 
FEATURED CONTRIBUTORS
 

EDITOR-IN-CHIEF:
Jennifer Snow
Director,
Health Policy
Xcenda

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

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

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

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

CONTRIBUTING AUTHORS:

Jennifer Le | Scott Shields | Diane Wilson | Stephen Wilson

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Adam Mathieu

 

June 2, 2017

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