The American Health Care Act’s Future Is Up in the Air. Learn more.

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Mar. 24, 2017

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FEATURED STORY
 

Fly or Die? Fate of the AHCA Still Up in the Air

 
 

As of press time, the fate of the American Health Care Act (AHCA) is in question, with a House of Representatives vote to be held later today.

On Monday, Ways & Means Committee Chairman Kevin Brady (R-TX) and Energy & Commerce Committee Chairman Greg Walden (R-OR) introduced amendments to the AHCA designed to address concerns by more conservative Republicans, including delaying the implementation date of the Cadillac Tax from 2025 to 2026, accelerating the repeal of ACA taxes from 2018 to 2017, and making various policy changes to the Medicaid program to provide states with more flexibility over the design of their programs. The Congressional Budget Office (CBO) said Thursday the changes would reduce budgetary savings slightly and leave insurance coverage and premium estimates essentially unchanged from its earlier AHCA cost estimate.

The changes did little to sway members of the House Freedom Caucus, a hardline conservative group that opposes the AHCA’s tax credits, essential health benefits, and some other provisions “carried over” from the ACA.

During the week, President Donald Trump met with various members of the Freedom Caucus to swing the votes in his favor to no avail. Late Thursday afternoon, Republican leadership put the House in recess, postponing the vote until any time from press time until Monday.

Meanwhile, as reported by Politico, White House Budget Director Mick Mulvaney dropped a bombshell on Republican representatives Thursday evening: He informed the lawmakers that Trump was demanding the House vote today on the AHCA. If the bill fails, Mulvaney warned, Trump was prepared to move on and leave the ACA in place. According to Politico, Mulvaney made his announcement with the full support of Ryan and other House GOP leaders.

Even if Ryan and others can make sufficient concessions to the AHCA to get the Republicans past the tipping point, the bill would continue its tortuous path to the more mainstream Senate. The Republicans, holding 52 seats in the upper chamber, can only afford to lose 2 Senators to guarantee passage. However, many Republican Senators hail from states that expanded their Medicaid programs and are loath to vote for a bill that would strip their residents of their Medicaid enrollment.

Hovering over everything are the arcane parliamentarian rules governing what can—and cannot—be included in the AHCA, which is a reconciliation bill and, therefore, has strict limitations on provisions that may be included.

 

Heading to AMCP? Join Your AmerisourceBergen Colleagues in Denver.

 
 

Join leaders from AmerisourceBergen, US Bioservices, and Xcenda in Denver, Colorado for the 29th Annual AMCP Meeting and Expo.

Stop by booth #513 and learn more about the integrated solutions that will drive success across healthcare delivery. Meet payer marketing professionals and global HEOR consultants and gain insights from experts in specialty pharmacy.

Xcenda also continues excellence in scientific research and proudly presents 5 posters on Tuesday, March 28 and Wednesday, March 29. Learn more about our research on value frameworks, relative vs absolute risk framing, and our insights on FDAMA 114. Read more

 
 

 
LEGISLATIVE UPDATE
 

Forget Must-Watch TV, TGI-PDUFA Reauthorization Moving Along

 
 

On Wednesday, the House Energy and Commerce Subcommittee on Health, chaired by Rep. Michael Burgess (R-TX), held a hearing examining the Prescription Drug User Fee Act (PDUFA), which needs to be reauthorized before it expires in September 2017. PDUFA supports the review and regulation of innovative drug products and helps ensure patients receive timely access to safe and effective new therapies by collecting fees from drug manufacturers when they file a New Drug Application (NDA) or Biologics License Application (BLA). The funds collected are to be used for the Food and Drug Administration’s (FDA’s) Center for Drug Evaluation and Research (CDER) or Center for Biologics  Evaluation and Research (CBER) drug approval activities. Janet Woodcock, Director of CBER, discussed the shared goals of the 21st Century Cures Act and PDUFA VI (comprising fiscal years 2018–2022).

The Health Subcommittee recently held a hearing examining the Generic Drug User Fee Amendments (GDUFA) and the Biosimilar User Fee Act (BsUFA), both of which also expire this September. The subcommittee will hold a hearing next week examining the Medical Device User Fee Program. All of these user fee programs must be reauthorized by the end of fiscal year 2017 and time is getting tight to squeeze it all in. Fortunately (unfortunately?), PDUFA is traditionally seen as must-pass legislation. What remains to be seen is whether the “UFAs” will move through the reauthorization process relatively cleanly or if the legislation will become a vehicle for other healthcare-related topics continuing to grab the headlines, such as proposals to address drug pricing.

 
REGULATORY UPDATES
 

You Spin Me Right Round, Baby: HHS Touts Relief From ACA

 
 

On Monday, the Department of Health and Human Services (HHS) launched a new webpage listing recent and ongoing actions to “relieve the burden of the current healthcare law and support a patient-centered healthcare system.” Titled “Providing Relief Right Now for Patients,” this site highlights ongoing efforts by the Trump administration to repeal and replace the ACA, such as:

Medicaid Reform
Medicaid Reform, not Medicaid Expansion as outlined in a letter to America’s 50 governors on March 14, affirms the Administration’s commitment to a bottom-up approach whereby states determine how to run their Medicaid programs. Some suggestions from HHS Secretary Tom Price and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma include health savings accounts, employer-provided coverage for persons under Medicaid, requiring patients have a financial stake in their healthcare, and new work requirements.

Innovation Waivers
State innovation waivers are already permitted by existing ACA law under Section 1332. These waivers allow states to craft their own plans, provided they follow the same standards outlined by the ACA and do not add to the federal deficit. Already, Alaska, California, and Vermont have submitted waiver proposals, while Hawaii was approved for a 5-year period, effective January 1, 2017.

Pre-ACA
For millions of consumers on the individual market, only certain ACA-approved plans are allowed. Part of the administration’s rollback of regulations is allowing patients more flexibility, as outlined in a February 23 letter from HHS Secretary Price to State Insurance Commissioners. Effectively, consumers can now keep their non-ACA-compliant plans if they wish.

Deadlines
Touted as means for allowing insurers more time to crunch numbers and offer better choices to consumers, HHS extended various deadlines. An updated insurer calendar was released February 17 and includes Qualified Health Plan (QHP) Certification, Rate Review for Single Risk Pool, and Risk Adjustment and Reinsurance. Insurers should note some of these dates were recently revised or are currently open for comments.  

The administration encourages the public to check this site periodically for updates, which will be posted as soon as legally permitted. Key future measures are expected to focus on reducing regulations and promoting competition.

The regulatory approach taken by the new guard at HHS represents the stark contrast between the former and current administrations’ approach to access to healthcare.

 

Absence Makes the Heart Grow Fonder? Bundled Payment Delay

 
 

CMS has delayed expansion of the Comprehensive Care for Joint Replacement (CJR) pilot from July 1, 2017 to Oct. 1, 2017 and has also delayed its Cardiac Rehabilitation (CR) Incentive Payment model until 2018. Both programs were designed by the Center for Medicare and Medicaid Innovation (CMMI).

The interim final rule with comment period stated this 3-month delay was needed to allow for additional review, adequate time to undertake notice and rulemaking commentary, to modify policy if warranted, and to ensure participants have a clear understanding of governing rules without needless compliance steps. CMS is seeking comment on “the appropriateness of this delay,” for 30 days after the interim final rule is filed for public inspection.

The CJR program rolled out in April 2016 across 800 hospitals in 67 metropolitan areas. Medicare pays providers a fixed amount for all costs of a hip or knee replacement over 90 days. The expanded program would have included repairing hip and femur fractures and cardiac care.

The CR Incentive Payment model is a 5-year program that would hold hospitals in 98 metropolitan areas financially accountable for all bypass surgery and heart attack costs. The cardiac bundles were originally to begin July 1, 2017 and end Dec. 31, 2021. CMS is seeking comment on the possibility of delaying the start of the cardiac bundles and CJR expansion to Jan. 1, 2018.

HHS Secretary Price was critical of mandatory CMMI programs such as these programs for joint replacements and stroke and heart attack care. It is possible HHS leadership could decide such mandatory bundled programs should be revamped and have voluntary participation.

 

More Life: New Study Finds Medicare Part D Reduced Mortality

 
 

While it may seem obvious that insurance and access to treatment improve people’s health, seeing it proved with data is satisfying. A paper published recently in the Journal of Health Economics provides evidence that the increase in drug utilization attributable to the Medicare prescription drug benefit (Part D) saves lives.

The study investigated the implementation of Medicare Part D by comparing differences in mortality between those aged 66 who had been eligible for Medicare Part D for at least 1 year and those aged 64 who were not yet eligible for Part D. The authors conclude that the Part D program reduced elderly mortality by 2.2% annually since its implementation in 2006. This was primarily driven by a 4.4% reduction in cardiovascular mortality, the leading cause of death for the elderly. The authors calculated that the value of mortality reduction is equal to $5 billion per year.

Detractors argued, while the structure of Part D was being debated, that the program would benefit pharmaceutical manufacturers more than patients. However, this study shows that facilitating access to drugs saves lives and reduces costs—a near-perfect message for the beleaguered industry.

 

Another Week, Another Proposal to Tackle Drug Pricing (in a Silo)

 
 

Earlier this week, a Health Affairs blog post suggested assigning discounted prices to drugs receiving fast-track approval by the FDA as a potential mechanism to cut down on high drug costs. Under this conditional-approval option, the discounted price would be in play until the new drug proved effective based on longer-term trials using collected patient data.  

Drugs on the current accelerated approval process are generally breakthrough therapies for serious conditions with no existing treatments. Many of these drugs receive priority review and orphan drug status. To get the drug approved as fast as possible, surrogate endpoints, as opposed to survival rates, are measured in clinical trials. The longer-term efficacy of the drug is usually unknown when these qualifying drugs are approved and prescribed to desperate patients. Regardless, insurers cover high-drug costs without potentially knowing the benefit of the new therapy.

Discounting a conditionally approved drug could preserve patient access while tempering financial risk to insurers. The only precedent for such an approval option took place in the AIDS epidemic era under the parallel track initiative for stavudine. At the time, the manufacturer of this experimental therapy could only charge enough to cover the costs of running the trial. The article authors suggest the FDA could improve upon this approach and implement a set discounted price formula until final approval.

However, setting the appropriate conditional approval price formula could prove to be difficult. For example, the blog post references a 75% discount on the manufacturer’s set price and claims this discounted amount would still cover the cost of production and provide a modest profit. Manufacturers may have difficulty justifying a high price upon receiving final approval if this type of formula was utilized. Creating a price formula that does not dissuade manufacturers from pursuing accelerated approval would probably be necessary to encourage the adoption of this pricing approach.

 
HEARD ON THE STREET
 

“I think the President has done a phenomenal job, there's no question.  And I think when you look at the effort that he's put in, the number of meetings that he's had, and the changes that have been made to the bill, there’s no question how hard the President and his team, the Vice President, have worked to get this done. And it's in response—at the end of the day, we can’t force somebody to vote."

– Sean Spicer, White House Press Secretary, responding to a reporter’s question about assigning blame if the AHCA does not pass the House of Representatives

Source: “Daily Press Briefing by the Press Secretary -- #27,” March 23

 
POLICY BY NUMBERS
 

56% vs 17%

 

American voters disapprove 56% to 17%, with 26% undecided, of the AHCA, according to a Quinnipiac University national poll released today. Support among Republicans is a lackluster 41% to 24%.

Source: “March 23, 2017 - US Voters Oppose GOP Health Plan 3-1, Quinnipiac University National Poll Finds; Big Opposition to Cuts to Medicaid, Planned Parenthood,” March 23

 
UPCOMING MEETINGS & CONFERENCES
 

AMCP 2017 Annual Meeting & Expo

March 27–30 l Denver, CO
Join leaders from AmerisourceBergen, US Bioservices, and Xcenda for the 29th Annual AMCP Meeting & Expo at booth #513. Learn more about the integrated solutions and insights that will drive success across healthcare delivery. Learn more

 

Asembia Specialty Pharmacy Summit 2017

April 30–May 3 l Las Vegas, NV
Join Xcenda at the largest US conference for specialty pharmacy. Matt Sarnes, PharmD, Senior Vice President of Commercial Consulting at Xcenda, will present, “The Future of FDAMA 114—How Will It Impact Access to Specialty Therapies?” Learn 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:

Dan Cadle | Bernard Falkoff | Marla Kugel | Scott Shields | Stephen Wilson

PRODUCTION:

Kylie Matthews | Ellen Olson

 

Mar. 24, 2017

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