Xcenda’s original research reveals differences in coverage for Part D plans and the VA national formulary. Learn more.

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Sept. 9, 2016

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Editor’s note: We missed you last week. To make up for it, we have a jam-packed issue including some original research and a behind-the-scenes view on some news that happened while we were out (avoiding hurricanes).
 
FEATURED STORY
 

ORIGINAL RESEARCH:
Stark Contrast in Part D vs VA Coverage of Newly Approved Drugs

 
 
With greater scrutiny on drug pricing, the Centers for Medicare & Medicaid Services (CMS) is being pushed again to negotiate Medicare Part D drug prices. This is one of the few areas where both presidential nominees agree. Recently, Xcenda questioned how such a change might impact Part D patient access to medications. To gauge the potential impact, Xcenda compared 25 newly Food and Drug Administration (FDA)-approved, first-in-class drugs among all Medicare Part D plans and the Veterans Affairs (VA) national formulary, with the premise of a government-run or -set formulary would likely be necessary for any proposal to be effective.

The coverage by all plans, based on Xcenda’s analysis, averaged 81%. Eleven (of 25) drugs were covered by 100% of the Medicare Part D plans, 9 of which fell into one of the protected class categories under Part D.

Conversely, VA coverage was considerably lower when compared to Medicare Part D. Only 12% (3 out of 25) of the drugs in the sample were found on the VA national formulary, and these same 3 drugs were also generally favorably covered among Part D plans (70%–100%). However, outside of these products, the VA’s national formulary appears significantly less generous than Part D formularies, as the other 22 drugs were not covered.

The results of the study offer an unambiguous distinction in coverage of the analyzed drugs between the 2 programs, suggesting a national formulary could restrict access options for beneficiaries. It is important to note that, unlike the VA, Part D plans must abide by various formulary requirements, such as covering substantially all drugs that fall in 6 protected classes.

However, even excluding the products in the list with protected class status, Part D plan coverage for the remaining 16 drugs averaged 45%, while the VA covered only 3 of the 16 drugs (19% of the adjusted sample). In other words, the VA would not cover a majority of the drugs analyzed if coverage were required as under Part D. If, in an effort to maintain program costs, a single CMS formulary were instituted, the result would likely be more restrictive access to Part D therapies.

The full report can be accessed here.

This work was funded by the Pharmaceutical Research and Manufacturers of America (PhRMA), but Xcenda maintained editorial control.
 

AMCP Nexus 2016

 
 

Join Xcenda in National Harbor, MD for AMCP Nexus 2016. This premier, in-depth, educational event provides managed care pharmacy professionals with insights and tools to improve outcomes and reduce healthcare spending. Visit booth #612 to meet experts from Xcenda to help you navigate today’s healthcare environment. Learn more.

 

 
 
REGULATORY UPDATES
 

Clinton’s New Drug Pricing Proposal: Policy Planning 2017?

 
 

Late last week, Hillary Clinton unveiled her plan to protect US consumers from large price hikes on long-available, lifesaving drugs, adding to her pledges to restraint in overall drug prices. This came just a week after consumer representatives to the National Association of Insurance Commissioners (NAIC) released a list of recommendations to assist regulators, lawmakers, and the NAIC on ways to promote access, affordability, nondiscrimination, transparency, and meaningful oversight of prescription drug coverage.

Clinton would form a panel with the ability to levy fines and impose penalties on a manufacturer when there is an “unjustified, outlier price increase” on a drug. Other key features of her proposed plan include:

  • Allow Medicare to negotiate drug prices
  • Demand higher rebates for prescription drugs
  • Impose caps on monthly and annual out-of-pocket costs for patients with chronic or serious health conditions
  • Import alternative products with strong safety standards to expand access
  • Allow direct purchases of alternative versions of longstanding drugs

Clinton would prohibit manufacturers from paying generic drugmakers to delay launching their cheaper products and would eliminate corporate write-offs for direct-to-consumer pharmaceutical advertising. According to her proposal, Clinton’s plan will ensure new drugs provide “value” and “high quality” to consumers, “rather than adding to cost without improving treatments and outcomes.”

Overall, the industry has had a rough year. According to a recent Gallup poll, the federal government, pharmaceuticals, and healthcare were the most negatively viewed industries by the public. Although not at the bottom of the list, the pharmaceutical industry last year registered its worst showing in the 16 years Gallup has been tracking how different sectors are perceived. It leaves the door open to making some changes that maybe once would have seemed impossible. Although much of Clinton’s plan would require legislation, certain aspects could be implemented via regulation, thus bypassing Congress.

 

GAO: ASP Should Be Lower Due to Manufacturer Discount Coupons

 
 

The Government Accountability Office (GAO) recently published a report analyzing drug manufacturer coupon programs and their possible effect on Medicare Part B spending. The study was to determine the potential impact on the average sales price (ASP) calculation and payment rates for 18 high-expenditure drugs commonly administered in the Part B program.

Coupon use is strictly prohibited in Medicare and other federal healthcare programs; however, the GAO has concluded that Medicare’s methodology for setting Part B payment rates to providers may be less suitable for drugs with coupon programs than for drugs without them. As ASP does not account for coupon discounts to patients, the discounts reduce the effective market price that manufacturers receive for drugs with coupon programs.

The GAO estimated that, for the 18 drugs for which it obtained coupon discount data, the ASP exceeded the effective market price by an estimated 0.7% in 2013. Thus, Part B spending could have been an estimated $69 million lower if ASP equaled the effective market price.

To address this potential for savings, the GAO recommends Congress consider:

  1. Granting CMS the authority to collect data from drug manufacturers on coupon discounts for Part B drugs paid based on ASP
  2. Requiring CMS to periodically collect these data and report on the implications of coupon programs for this methodology

While the GAO provided a copy of this report to the Department of Health and Human Services (HHS), the department only provided technical comments, which were incorporated as appropriate.

The likelihood CMS will look to modify its ASP definition, or that Congress has the energy to debate this issue during election season, is extremely low, so any related movement or discussion would not be expected until after the new year.

   

Flexibility for MACRA Participation in Inaugural Year

 
 

On September 8, CMS Acting Administrator Andy Slavitt announced, via blog post, a tiered approach created to allow physicians flexibility in choosing the level and pace at which they comply with the first-year requirements of the Medicare Access and CHIP Reauthorization Act of 2015’s (MACRA) Quality Payment Program—Medicare’s new payment system—whose first performance period starts January 1. CMS’ announcement was released just days after Representatives from the House Ways and Means and the House Energy and Commerce Committees sent letters to HHS Secretary Sylvia Burwell calling for more flexibility with MACRA implementation.

In the announcement, Slavitt outlined 4 different options for physicians to submit data to MACRA’s Quality Payment Program and/or participate in Medicare’s new payment schema to avoid negative payment adjustments in 2019:  

  1. Test the Quality Payment Program. Any data reported will allow providers to avoid a negative payment adjustment in 2019. The goal is to ease providers into broader participation in the 2 subsequent years.
  2. Participate for part of the calendar year. Providers may submit data for a reduced number of days in 2017 and still qualify for a small payment if the practice submits data on how the practice is using technology and how it is improving.
  3. Participate for the full calendar year. Practices ready to go on January 1, 2017 may choose to submit Quality Payment Program information for a full calendar year and may qualify for a modest positive payment adjustment.
  4. Participate in an Advanced Alternative Payment Model (AAPM) in 2017. Instead of reporting quality data and other information, the law allows physicians to participate in the Quality Payment Program by joining an AAPM, such as Medicare Shared Savings Track 2 or 3 in 2017. Participants who meet the AAPM payment thresholds in 2017 could qualify for a 5% incentive payment in 2019.

The blog post indicates additional detail on the “pick your pace of participation” in MACRA will be forthcoming in the final MACRA rule, expected to be released by November 1. Slavitt stated, “We appreciate the sincere and constructive participation in the feedback process to date and look forward to advancing step-by-step in that same spirit…[and] Most importantly, we look forward to further engagement with physicians and other clinicians toward our shared goal of the highest quality of care and best outcomes for patients.”

   

XCENDA BEHIND THE SCENES:
JAMA: Diving Into the Deep End of Financial Conflicts of Interest

 
 

A recent article in the Journal of the American Medical Association (JAMA) reports National Comprehensive Cancer Network (NCCN) Guidelines panel members receive financial payments from the pharmaceutical industry in an average amount of $10,011 for general payments and $236,066 for research payments. The article authors reviewed NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines) oncology experts’ reported payments from the CMS Open Payments website to extract the average payments, which the authors categorized as either general payments (consulting, meals, lodging, etc) or research payments.

The article reports 84% of reviewed panel advisors received general payment, while 47% received research payments. In addition, 6% of the oncology experts’ reviewed collected payments exceeded NCCN’s financial maximums of $20,000 from a single company and $50,000 aggregate. The article implies accepting payments from industry may create bias in the oncology experts’ recommendations within the Guidelines.  

But is the analysis really comparing apples and oranges? A closer look at NCCN’s disclosure policy finds a variety of differences in the definition of payments from industry; for example, NCCN does not consider travel expenses or meals as a financial benefit; hence, they do not request that data. Research funding, which typically goes to institutions and not directly to the primary investigators, is also excluded from NCCN’s financial maximum calculation because research to identify ways to improve care and outcomes is a core responsibility of the academic physicians who participate in Guidelines panels.

Recently, as part of NCCN’s commitment for transparency, NCCN reviewed its panel members’ payments through Open Payments and found less than 1% of its oncology experts had potential problems when using NCCN definitions of payments. During the review, NCCN found issues with the data originating from the Open Payments data set, such as duplicate reports of the same payment or misattribution of research payment as general payment. This is consistent with the limitation voiced about the quality of payment data by the study authors that “there remain ways in which they may be imprecise or inaccurate.” NCCN also found its practice of using a rolling 6-month computation does not align with the Open Payments data set, which caused issues when comparing the self-reporting from Guidelines panel members to the Open Payments data.

NCCN’s Senior Vice President of Clinical Information and Publications Joan McClure makes the point in a recent interview with Xcenda, “The oncology experts of the type and quality on our Guidelines panels are heavily sought after by industry as consultants for their vast knowledge. While they donate their time to the NCCN Guidelines, we wouldn’t expect them to provide their expertise for free to industry.”

Ms. McClure also states NCCN has a policy to avoid conflict of interest but allows expert knowledge sharing. “National and global primary investigators for industry-sponsored trials are allowed to participate in the discussions for Guidelines because they often have insight into strengths and weaknesses of the trials but they do not vote on recommendations; sub-investigators participate freely.”

To expect oncology experts to abstain from industry payment for research may, in fact, cause a slow-down in scientific discovery/progress as, by some accounts, industry funds 6 times the number of clinical trials as those funded by the National Institutes of Health. While the Cancer Moonshot hopes to fund more oncology clinical trials, the overall initiative will be leveraging partnerships with industry to help accomplish its stated goals.

Transparency of financial conflicts of interest is important, but the issue is complex, and a balanced perspective is needed.

   

2015 ACO Results Announced

 
 

CMS recently released the 2015 performance results for Medicare accountable care organizations (ACOs) showing quality of care for Medicare beneficiaries improved while costs were lowered. Medicare Shared Savings Program (MSSP) and Pioneer ACOs have driven more than $466 million in savings in 2015 alone and $1.29 billion in total since 2012. At the same time, these organizations improved substantially in quality metrics based on care provided to the 7.7 million Medicare beneficiaries they manage.

CMS found that the more mature ACOs are achieving the best financial results. Among the MSSP ACOs that started in 2012, 42% generated savings large enough to qualify for bonus payments, compared to only 21% that started in 2015. Of course, not all ACOs generate savings; CMS reported nearly half of participating ACOs did not generate any Medicare fee-for-service payment savings in 2015.

To be eligible for shared savings, Medicare ACOs must meet certain quality requirements. MSSP ACOs that participated in both 2014 and 2015 improved on almost all of the quality metrics reported in both years. The quality metrics demonstrating the most improvement were screening for risk of future falls, depression screening and follow-up, blood pressure screening and follow-up, and providing pneumonia vaccinations.

As ACOs continue to perform strongly overall and encourage new participants, CMS gets closer to its goal of 50% of Medicare payments flowing through alternative payment models by 2018. This massive shift from volume to value will continue to impact the broader healthcare industry.

   

Biopharma’s Social Contract—Unwritten No More, But Will Others Hop on the Wagon?

 
 

Recently in his blog on the Allergan website, CEO Brent Saunders described the “healthcare industry’s… unwritten social contract” governing the relationship between biopharma and society. He states all can benefit in this ecosystem; however, that relationship is fragile, and recent negative headlines not only undermine the public’s confidence in the industry but also discourage critical investments in early-stage research fundamental to medical innovation.  

Saunders condemns “aggressive or predatory” pricing strategies and wants to ensure his employees, and the rest of the world, that such bad press won’t define Allergan.

Saunders lays out his 4 principles defining his vision of the social contract outlining Allergan’s business decisions moving forward:

  1. Invest & Innovate—Commitment to invest billions into the development of life-enhancing innovations where there is no guarantee of success
  2. Access & Pricing—Assurances that Allergan will price products in line with their value, increase prices no more than once per year, and limit price changes to single-digit percentage increases
  3. Quality & Safety—Comprehensive product safety monitoring and ensuring high-quality products while eliminating supply shortfalls
  4. Education—Appropriately educate physicians about products so that they are used for the right patient for the right indication

In addition to committing to these standards, Saunders encourages other organizations to create their own social contracts, as well as engage in open dialogue to discuss how the industry can continue to evolve.

 

Live Sept. 29 Webinar: Real-World Evidence: What Does It Mean for Your Commercialization Plans?

 
 

To ensure successful commercialization, manufacturers need to understand the crucial role real-world evidence (RWE) is now playing in product planning and determine best practices for evidence dissemination.

Join Xcenda’s Michael Eaddy, PharmD, PhD, Vice President, Real-World Evidence Generation, and Patricia Wolfangel, Vice President, Market Access Consulting & Communications, for a live webinar on September 29. This complimentary webinar will explore the critical role and impact of RWE on product life-cycle management from concept through post-launch. Insights will be provided on use of RWE to demonstrate product value, as well as best practices to ensure decision makers receive data in a timely and actionable format. Learn more.

 

 
HEARD ON THE STREET
 

“Knowing that the Senate is likely to file their CR next week…and say ‘see ya’ in November, it’s darn near impossible to get a bill through both the House and the Senate [before Congress breaks].”

– House Energy and Commerce Committee Chairman Fred Upton (R-MI), commenting to reporters that the 21st Century Cures Act will not be passed before the elections, as there is insufficient time before Congress goes on recess this fall.

Source: “GOP chairman eyes lame-duck for passing medical cures bill,” The Hill, September 7

 
 
 
POLICY BY NUMBERS
 

1

 

Number of insurers offering exchange plans in Pinal County, Arizona in 2017—1 more than on Wednesday, as the county was facing the prospect of being the first county in the country with no exchange plans. On Thursday, Blue Cross Blue Shield of Arizona announced it would offer plans in the county for the 2017 plan year.

Source: “Blue Cross Blue Shield of Arizona to Offer ACA Individual and Family Plans in Pinal County in 2017,” Blue Cross Blue Shield of Arizona, September 8

 
UPCOMING MEETINGS & CONFERENCES
 

ICRC September Webinar: Current Applications of Value Frameworks for Decision Making in the US

September 19 | 12:00 PM CT/1:00 PM ET
Join Kristen Migliaccio and Ken O’Day, PhD, MPA, both Directors with Xcenda's Global Health Economics and Outcomes Research practice, for a live webinar examining the current value frameworks being utilized in the US. Register now.

 

AMCP Nexus 2016

October 3–6 | National Harbor, MD
Join Xcenda in National Harbor for AMCP Nexus 2016. This premier, in-depth, educational event provides managed care pharmacy professionals with insights and tools to improve outcomes and reduce healthcare spending. Visit booth #612 to meet experts from Xcenda to help you navigate today’s healthcare environment. Learn more.

 
 

ISPOR 19th Annual European Congress

October 29November 2 | Vienna, Austria
Join Xcenda’s global team of HEOR experts at ISPOR’s Annual European Congress in Vienna, Austria. Xcenda will be hosting a morning symposium on Tuesday, November 1, titled, “Should the European Market Be Used as a Model for the United States? Insights From Payers and Considerations for Manufacturers.” Learn more.

 
 

HPW Rebuild

 

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

 
 
 
 

HPW Rebuild

 
FEATURED CONTRIBUTORS
 

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

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

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

Loreen Brown, LMSW
Senior Vice President | Product, Strategy & Commercialization Excellence | Lash 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:

Corey Ford | Rupali Fuldeore | Vikram Harish | Stacie Heller | Maureen Holmes | Marla Kugel  | Scott Shields Jennifer Snow | Diane Wilson

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Tia O’Brien

 

Sept. 9, 2016

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