Republican leaders present their 3-phase plan to repeal and replace the ACA. Learn more.

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Mar. 10, 2017

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FEATURED STORY
 

And They’re Like, It’s Better Than Yours: GOP ACA Repeal-and-Replace Plan

 
 

On Monday, Republican leaders unveiled their 3-phase plan for repealing and replacing the Affordable Care Act (ACA). House Speaker Paul Ryan (R-WI) outlined the approach in a news conference with House Majority Leader Kevin McCarthy (R-CA) and House Energy and Commerce Committee Chairman Greg Walden (R-OR):

  1. Introduction of the American Health Care Act (AHCA), the reconciliation bill that House committees marked up Wednesday that would fulfill the promise to repeal and replace the ACA
  2. Deregulation by Tom Price, Secretary of Health and Human Services (HHS), “to lower the costs and stabilize the market”
  3. Further legislation to advance policies that cannot be considered in reconciliation

The AHCA is a revamp of the leaked draft from February 24 and was immediately disparaged by conservative Republicans, who believe there is still too much government involvement in the new plan and see it as a new entitlement program. The cost of the plan will not be known until the Congressional Budget Office (CBO) scores it, which is expected next week.

The following is a very brief summary of AHCA’s provisions compared to the ACA’s.

ACA Provisions That Remain in AHCA. The AHCA retains the most popular elements of the ACA:

  • Prohibitions on pre-existing condition exclusions
  • People can remain on their parents’ health plan until age 26
  • Ban on annual and lifetime limits
  • Medicaid expansion. The AHCA would continue Medicaid expansion through January 1, 2020; at that point, enrollment would “freeze”

ACA Provisions the AHCA Removes. The AHCA removes the most unpopular provisions of the ACA:

  • Individual mandate. Under the AHCA, if an insured person decides to discontinue their policy for longer than 2 months, when they re-enroll, they have a 30% premium surcharge for 1 year
  • Medicare Part A payroll tax on high earners, beginning after December 31, 2017
  • Annual fee paid by branded prescription drug manufacturers, beginning after December 31, 2017
  • “Cadillac Tax” for tax years 2020 through 2024
  • Tax on health insurers
  • Excise tax on sales of medical devices

Other Differences Between the ACA and AHCA:

  • The AHCA would convert Medicaid to a “per capita cap” system, where states would get a lump sum from the federal government for each enrollee
  • The AHCA would allow insurers to charge their oldest enrollees 5 times as much as their youngest enrollees (vs the 3-times ratio under the ACA)
  • Tax credits to purchase health insurance are based on age under the AHCA, vs on income under the ACA

The AHCA has faced opposition by many lawmakers, including Democrats, conservative House Republicans, and many Senate Republicans, as well as stakeholders, including the American Hospital Association, the American College of Physicians, the Medicare Rights Center, America’s Essential Hospitals, the Club for Growth, and Heritage Action for America.

Yesterday, after a combined 20+ hours in mark-up sessions, 2 House committees (Ways and Means, Energy and Commerce) voted along party lines to advance the AHCA despite not having a CBO score. The measure’s next stop is the House Budget Committee—expected next week—at which time a CBO score is also expected before moving on for a full House vote, which could be perilous for Ryan, as he can lose only 21 Republican votes if the AHCA is to pass. Should the bill pass the House, Republican Senators have already expressed many concerns with the bill, and they will also use the CBO’s score to help guide their votes. With plans deciding on their 2018 participation in the Exchanges, timing is tight to get legislative changes in place for the 2018 plan year.

 

Adapting to ACA Uncertainty: The Future of Patient Support Programs

 
 

March 16–17 | Baltimore, MD

Join Xcenda’s Corey Ford, MHA, and Jennifer Johnson, MS, both Associate Directors of Reimbursement & Policy Insights, as they present a timely and very relevant session at the upcoming CBI Patient Assistance and Access Programs (PAP) Conference in Baltimore, MD.

Mr. Ford and Ms. Johnson will discuss the future of the ACA and its likely repeal or replacement by the current Administration. They will also provide insight on the impact to both patient access and patient support programs, as well as identify areas of consideration to facilitate patient access in this time of change. Learn more

 
 

 

 
LEGISLATIVE UPDATE
 

Big Wheels Keep on Turning: Drug-Pricing Update

 
 

President Trump didn’t make many friends in the pharmaceutical industry when he stepped into the drug-pricing debate again on Tuesday with a tweet stating, “I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!”

No details behind his system were forthcoming, but eyebrows were raised the next day when Rep. Elijah Cummings (D-MD), Ranking Member of the House Committee on Oversight and Government Reform, Rep. Peter Welch (D-VT), and Dr. Redonda Miller, President of Johns Hopkins Hospital, met with Trump to present him their draft legislation that would allow the HHS Secretary to negotiate lower prices for prescription drugs under Medicare. Cummings and Welch noted how Trump has shown support for allowing the federal government to have that authority, and they expressed hope that “he will keep his promise to the American people and support our bill to lower prices for many drugs that help save lives.”

Meanwhile, there appears to be a disconnect between the Administration and the House Republicans regarding drug pricing. As discussed in our Featured Story, this week Speaker Ryan and the White House announced their 3-phase plan to repeal and replace the ACA. The HHS release commented how, for phase 3, “HHS supports legislation to take action on other priorities President Trump has laid out for healthcare, including… [r]educing out-of-control drug costs.” Ryan, on the other hand, mentioned no such action on drug costs or pricing during his news conference discussing the 3 phases.

The issue of drug costs has been a consistent area of disagreement between Trump and the Republicans in Congress. Most Republican Representatives and Senators, who traditionally favor market-based solutions, probably hoped Trump’s statements advocating for government intervention into drug pricing was a campaign ploy only. However, Trump’s recurring comments have made it clear he intends to either intervene via regulation or support intervention via legislation.

 
REGULATORY UPDATES
 

Xcenda Original Research / What You Need, Do You Know I Got It:
PAPs and ACA Repeal

 
 

As described in this issue, the Republican-led Congress and White House are working on a bill to repeal and replace the ACA. With the veil of uncertainty surrounding what might happen to the Health Insurance Exchanges (HIXs) and Medicaid expansion, pharmaceutical manufacturers need to plan for potential changes in their current patient support offerings.

To plan ahead, it can be helpful to look at what has happened to patient assistance programs (PAPs) under the ACA. To learn more about our projects, read here.

 

All Right Stop, Collaborate and Listen. MedPAC Continues Part B Discussions

 
 

At its March public meeting, the Medicare Payment Advisory Commission (MedPAC) continued its conversation to redesign Medicare Part B drug payment. As discussed in the January meeting, MedPAC is considering recommendations that would reform the current fee-for-service average sales price (ASP) and wholesale acquisition cost (WAC) payment methodologies and establish a Drug Value Program (DVP) as a market-based alternative to the fee-for-service ASP payment methodology.

MedPAC staff noted the largest factors contributing to increased Part B drug costs were rising prices and larger prescription volumes for higher-cost drugs. MedPAC continues to believe that the current ASP payment structure is leading to overprescribing of higher-cost drugs. It was not surprising, therefore, that there was no discussion on the dynamic impact of this spending on the medical spending and/or outcomes—just prescription drug spending in a silo.

As in previous meetings, Commissioners considered changes to the current ASP payment system:

  • Requiring the reporting of ASP for all Part B drugs, and increasing the Civil Monetary Penalty for failing to do so in a timely manner
  • Requiring a reduction in payment under the WAC from WAC+6% to WAC+3% for drugs paid under that methodology (and, in parallel, reduce the ASP formula accordingly)
  • Requiring manufacturers to pay a rebate when their product’s ASP exceeds an inflation-adjusted ASP for the billing code
    • One commissioner was so opposed to this idea he asked that the voting uncouple recommendations so that he did not have to consider voting against all the recommendations
  • Giving the HHS Secretary the authority to group a reference biologic and its biosimilars in a common billing code as well as group biologics with similar health effects in a common billing code

According to analysis completed by MedPAC staff in 2016, IMS data suggests that two-thirds of Part B drugs are reimbursed at 102% of ASP; MedPAC further extrapolated that the effect of payment reduction for these drugs through sequestration has lowered drug costs. As such, MedPAC is considering a recommendation to reduce the current ASP add-on payment to encourage providers to participate in a new voluntary Competitive Acquisition Program (CAP)-type model—the DVP. Under the Commission’s draft recommendations, the add-on payment would be reduced from 6% to 4.3% no later than 2022 to coincide with the recommended beginning of the DVP, but they do not oppose the reduction happening earlier. The draft recommendations also contemplate a further gradual reduction of ASP.

Slightly altered from the circa 2007 CAP model that died due to poor design and lack of participation from vendors and providers, the DVP would use a small number of private vendors to negotiate prices and offer providers shared savings. To be able to negotiate, DVP vendors would establish formularies and utilization management. This program would be voluntary for providers, but the traditional ASP add-on (currently 6%) would be gradually reduced, encouraging provider enrollment. DVP could reduce beneficiary cost-sharing by providing coinsurance based on negotiated rates (no higher than 100% ASP). DVP prices would be excluded from ASP calculations.

For example, if the ASP price is $500 with an ASP+6% equaling $530 and the DVP negotiated price is $475, the beneficiary’s cost-sharing would be pegged to the $475 rather than the higher ASP reimbursement rate; the shared savings would come from the differential between the ASP and the negotiated rate.

With general support from a majority of the Commissioners at last week’s meeting, MedPAC will vote on its final recommendations in April for inclusion in its June report to Congress.

 

It Goes On and On, and On, and On: ICER Says ‘I’m Not Going to Pay a Lot for This Muffler’ (If Muffler = Disease-Modifying MS Drugs)

 
 

The Institute for Clinical and Economic Review (ICER) recently released a Final Evidence Report and Meeting Summary on the comparative clinical effectiveness and value of disease-modifying therapies (DMTs) for treatment of relapsing-remitting and primary progressive multiple sclerosis (RRMS and PPMS).

The report reviews the evidence on the comparative clinical effectiveness of DMTs and includes economic analyses to determine the value of the drugs in the short- and long-term. The report’s economic analyses rely on publicly disclosed data on net dollar sales and volume information to estimate average prices after typical discounts and rebates. The report incorporates a summary of votes taken during a public meeting of the California Technology Assessment Forum (CTAF), as well as key policy implications stemming from discussion with a panel that included a patient, a patient advocate, clinical experts, 2 major insurers, and a drug manufacturer representative.

ICER found that while DMTs for RRMS and PPMS offer important clinical benefits for patients in terms of reduced relapse rates and delayed disability progression, the prices do not align with the benefits, contributing to access problems and financial burdens for MS patients. The report also says that it will take a concerted effort among all stakeholders to align pricing with clinical benefit and ease coverage restrictions once the prices decrease. ICER believes the system will meet the needs of MS patients in a more satisfactory manner.

Given the current political environment, where both sides of the aisle are calling for price reductions, reports such as this calling for alignment of price with value may end up getting more attention and action than in the past, leaving manufacturers to defend their pricing with the clinical value of products in front of audiences primed to action based on ICER’s interpretation of what constitutes drug value. But maybe this will spur the changes needed to allow more outcomes-based contracting, a change many manufacturers would welcome.

 

We’ve Got to Hold On, Ready or Not: Employers’ Healthcare Benefit Types Are Proliferating

 
 

As the future of the ACA remains uncertain, employers are pursuing a variety of effective solutions to control healthcare costs. In recent years, employers have adopted high-deductible health plans (HDHPs) as a way to avoid the impending “Cadillac Tax.” The use of HDHPs seems to have (at least for the time being) plateaued under the current uncertainty around the future of the ACA.

While the fate of the delayed Cadillac Tax in its current form is uncertain in the ACA repeal-replace debate, the need for employers to control healthcare costs remains important, as a recent report shows employers expect costs to continue rising by about 6% this year. Solutions they are incorporating include health savings accounts (HSAs), wellness incentives, price transparency tools, and alternative care options to reduce costs.

Price transparency tools help employees compare the costs for services and products, while price shopping is proving to drive savings for employees and employers. Employers are increasing their usage of wellness incentives and offering a variety of incentives to drive participation. HSAs remain more popular than health reimbursement accounts; employer contributions to HSAs increased almost 10% compared to last year.

Employers will continue different methods and solutions to control healthcare costs, and the report authors also believe employers will look to different partnership arrangements with their employees to ensure they are educated about healthcare options, as well as maximizing the health benefits of those options.

 

Caught in a Landslide, No Escape From Reality (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:

  • Jost Rules: Health Affairs blog post examines the AHCA
  • ICER posted a draft scope on poly (ADP-ribose) polymerase (PARP) inhibitor ovarian cancer treatments including cost-effectiveness and budget impact of therapies that is open for public comment until March 27, 2017
  • The Senate advanced the nomination of Seema Verma, to be the Centers for Medicare & Medicaid (CMS) Administrator, to a final floor vote tentatively scheduled for March 13
  • Public and private insurer efforts to provide value-based physician payment are discussed in The Milbank Quarterly (anything James Robinson writes is worth reading)
 

Amy Grogg Provides Perspective in Drug Development & Delivery

 
 

“Manufacturers need their products to fit as seamlessly as possible into a provider and patient's everyday pattern.”

In an executive interview with Drug Development & Delivery, Amy Grogg, Senior Vice President of Strategy & Commercialization at AmerisourceBergen Specialty Group, gives her perspective on the barriers orphan drug manufacturers face and the solutions available to them through strategic partnerships with distributors. Read more

 
 

 
HEARD ON THE STREET
 

“I don’t like any of it. Now, I do think we agree as Republicans on repeal. But I don’t think we agree on the replacement. That’s why I say we should separate them, vote on repeal and then vote the same day on a separate bill that’s called replace.”

– Rand Paul (R-KY), discussing his disapproval of the AHCA, March 8

 
 

“I feel sure that my friend @RandPaul will come along with the new and great health care program because he knows Obamacare is a disaster!”

– President Donald Trump, hoping to “convince” Paul to support the AHCA, March 7

 
 
POLICY BY NUMBERS
 

1,400

 

Number of occurrences of “The Secretary shall…” (or a variation) in the ACA, giving HHS Secretary Tom Price great leeway in changing the focus of the health reform law via regulation

Source: “Phases 1, 2, and 3 of Patient-Centered Health Care Reform,” Paul Ryan’s Congressional website, March 7

 
UPCOMING MEETINGS & CONFERENCES
 

CBI 18th Annual Patient Assistance and Access Programs

March 16–17 l Baltimore, MD
Join AmerisourceBergen companies, Lash Group and Xcenda, at the premier conference for patient assistance and access programs. Tracy Foster, President of Lash Group, presents the keynote address titled, “Serving Patients Through the Power of Partnership.” In addition, Lash Group’s Christina Knight and Amy Jones will present, “Optimizing Reimbursement Support Programs with Electronic Benefit Verification (eBV).” Xcenda’s Corey Ford and Jennifer Johnson, both Associate Directors of Reimbursement & Policy Insights, will present a session titled, “Adapting to ACA Uncertainty: The Future of Patient Support Programs.” Learn more

 

AMCP Webinar: Driving Value and Outcomes in Oncology

March 22 l Webinar
Kellie Meyer, PharmD, MPH, Senior Director of Global Health Economics, joins a panel of experts for a live webinar discussing the proceedings of a recent AMCP Partnership Forum titled, “Driving Value and Outcomes in Oncology.” Forum stakeholders will share the ideas and concepts discussed at the forum to help sort through a wave of new oncology products coming to market each year. Register now

 

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:

Chris Droukas | Scott Shields | Jennifer Snow | Diane Wilson 

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

Mar. 10, 2017

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