Azar and Gottlieb hint at details of the Administration’s forthcoming drug-pricing strategy.
Read what they said at 2 of the biggest healthcare events of the year.

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May 4, 2018

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FEATURED STORY
 

Preparing the Death Star: Azar and Gottlieb Talk Drug Pricing

 
 

This week, both Health and Human Services (HHS) Secretary Alex Azar and Food and Drug Administration (FDA) Commissioner Scott Gottlieb delivered a jab and a cross before President Donald Trump’s potential haymaker on drug pricing next week. We are hearing changing reports about when the President will discuss his plan, but it is anticipated to happen next week. Side note—if you’re looking for your editors after the release(s), we’ll be sequestered somewhere reading them.

Speaking to the World Health Care Congress on Wednesday, Azar said the White House’s forthcoming drug-pricing strategy will focus on “solving a number of the problems that plague drug markets,” including:

  • High list prices
  • Seniors and government programs overpaying for drugs due to lack of negotiating tools
  • Rising out-of-pocket costs for consumers
  • Foreign governments “free-riding” from American investment in innovation

Azar stated that HHS is working with the President on a comprehensive strategy to solve these problems. He said the White House’s sweeping initiative will build on the proposal outlined in President Trump’s 2019 budget but that the President “wants to go further.”
 
Gottlieb followed Azar’s remarks by delivering the keynote address at the Food and Drug Law Institute’s Annual Conference. He said the US does not have a “truly free market” regarding drug prices and suggested the federal government should re-examine whether drug rebates should be exempt from the Anti-Kickback Statute. He stated such action “could restore some semblance of reality to the relationship between list and negotiated prices, and thereby boost affordability and competition.”

He mentioned that the framework the Secretary has developed will “dismantle” many of the provisions that “shield” parts of the drug industry from more vigorous competition. Part of this plan, he continued, includes a series of changes to the pricing mechanisms in Medicare Part D, which will amount to a “profound modernization” of the program. He believes the plan will “put us more firmly on a footing to defend the idea that brisk competition should be the vehicle by which we seek to lower drug costs.”

The President certainly appears to be on the cusp of carrying out one of his chief campaign pledges. Azar and Gottlieb appear to be more than spokespersons for Trump’s plans; they seem to be among the architects of the plan. They both are right-of-center, politically speaking, so their role in what seems to be a top-down approach to drug pricing is curious, to say the least.

 

State-Led: The Push for Transparency in Drug Pricing    

 
 

Gridlock at the federal level, coupled with the public demand for action, is compelling many states to act on drug-pricing legislation. The premise for these laws is that by mandating that pharmaceutical manufacturers disclose drug-pricing information (either at launch or whenever increases occur), states will be better able to manage healthcare costs, and consumers will have lower out-of-pocket costs for drugs.

Xcenda has been tracking the legislation and helping others understand the implications of state transparency efforts, as well as other legislation affecting access to innovation, including step therapy. With the recent ruling overturning the legislation in Maryland, we thought we would bring you an update on state legislation on drug-pricing transparency. Learn more

 
 

 
XCENDA ORIGINAL RESEARCH
   

The Force Was With Us: Bronze Ribbon for Payer Research on the Opioid Crisis

 
 

As the opioid epidemic continues to inflict a substantial toll across the US, stakeholders throughout the healthcare continuum continue to search for solutions to address this public health crisis. Xcenda-sponsored research presented at the Academy of Managed Care Pharmacy (AMCP) annual meeting last week in Boston aimed to assess payer interest and barriers to implementation of organizational management approaches to limit opioid abuse and overdose deaths in the US.

Additional objectives of the research included surveying US payers’ assessments of select recommendations from the President’s Commission on Combating Drug Addiction and the Opioid Crisis, as well as mental health parity mandates and their influence on coverage decisions for opioid use disorder (OUD) treatments.

Researchers developed and fielded an online questionnaire through Xcenda’s proprietary PayerPulse® web survey. The questionnaire was delivered to 60 members of Xcenda’s standing research panel, the Managed Care Network, composed of healthcare executives, medical and pharmacy directors, and other managed care experts.

Survey respondents indicated a high level of interest in limiting the first opioid prescription to a 7-day supply—which was just finalized in the Medicare Part D rule released last month. The survey also revealed a potential disconnect between the understanding and application of mental health parity standards—respondents indicated high levels of mental health parity awareness but rarely had discussions regarding compliance with health parity requirements when making coverage determinations for medications used to treat OUD.

The increase in opioid utilization over the past 5 years—with some plans lacking a strategy to identify members for early intervention—highlights the need to increase efforts focused on early detection and intervention in managed care settings.   

HPW Rebuild

 
REGULATORY UPDATES
 

Bases Falling to Galactic Empire: Number of Community Oncology Clinics in Decline

 
 

In its 2018 Practice Impact Report, the Community Oncology Alliance (COA) reports the number of community oncology clinics is decreasing at an accelerating rate. Since 2008, 1,294 oncology clinics/practices have closed, been acquired by hospitals, or undergone corporate mergers. In the last year alone, 423 clinics have closed (146% increase compared to the 2010 Practice Impact Report), 658 have been acquired by hospitals (194% increase), and 168 have merged with, or been acquired by, corporate entities (64% increase).

Why is this important? In a study conducted by AmerisourceBergen, community oncology clinics provide consistently lower-cost care compared to oncology care provided at hospitals. Additionally, COA states that community clinics lead the way in enhancing care and controlling costs, in part, through the adoption of the Oncology Medical Home and Oncology Care Model. Community clinics also provide care closer to many patients’ homes.

COA points to the 2% sequester payment cut to Medicare and the 340B Drug Discount Program as placing financial pressure on community oncology clinics. The organization asserts the 340B Drug Discount Program, in particular, exerts an unbalanced pressure on community clinics, compared to hospitals, because it allows eligible hospitals to purchase outpatient drugs at costs lower than available to clinics. A report issued by the House Energy and Commerce Committee in January recommends revisiting 340B, including evaluating changes in the healthcare landscape since 1992 and reassessing eligibility, and Congress has since held multiple hearings to understand the program better.

 

A Rebel Alliance? Express Scripts Announces Innovative Deal With Manufacturers of PCSK9 Inhibitor

 
 

On Tuesday, Express Scripts released details on an innovative agreement with Regeneron and Sanofi, the manufacturers of the cholesterol-lowering PCSK9 inhibitor, PRALUENT (alirocumab) Injection. Express Scripts claims this will lower the cost and increase the accessibility of the drug through a simplified approval process and by sharing rebates with beneficiaries.
 
Under this arrangement, PRALUENT will be the exclusive PCSK9 inhibitor available for 25 million beneficiaries on the payers’ national formulary effective July 1. Providers will only need to submit a single form confirming medical necessity, and rebates will be made available to beneficiaries when PRALUENT is filled using the payer’s specialty pharmacy, Accredo.

To complete the agreement, Sanofi and Regeneron will provide rebates to lower the price of the drug from the annual list price of $14,600 to somewhere between $4,500 and $8,000. In March, we noted how Sanofi and Regeneron were planning to lower the price of PRALUENT in response (in part) to an unfavorable cost-effectiveness analysis released by the Institute for Clinical and Economic Review (ICER).

Express Scripts indicated a critical factor to use PRALUENT was new clinical research presented by Regeneron and Sanofi that provided the pharmacy benefit manager more information about the clinical benefit achieved with longer-term use of this medication.

Incidentally, ICER just posted a notice that it will release a New Evidence Update for PCSK9 inhibitors no later than May 31. With the need for market access, pricing pressure from the public, and a disappointing performance of potential blockbusters, we expect manufacturers to pursue similar agreements and to generate evidence to support use of their products.

 

Judge Me by My Cost, Do You? An Estimate of Total CAR-T Expenses

 
 

Unless you have been frozen in carbonite for the last year, you know the new chimeric antigen receptor (CAR) T-cell therapies are expensive. But the costly treatment does not begin and end with CAR-T alone. For the first time, we have a peer-reviewed estimate of the total mean cost of CAR-T therapy that is detailed in JAMA Oncology.

The study authors at the University of Pittsburgh and Oregon Health & Science University calculated $510,963 for KYMRIAH (tisagenlecleucel) treatment and $402,647 for YESCARTA (axicabtagene ciloleucel) treatment. Subtracting the costs of the CAR-T products ($475,000 for KYMRIAH and $373,000 for YESCARTA) leaves mean additional nondrug costs of about $30,000 to $35,000, including leukapheresis, lymphodepletion therapy, and management of the adverse effects of CAR-T.

Despite the estimated costs of administering and managing the treatment being “only” 7% of total costs, there are a couple of important implications. Under the proposed outcomes-based pricing arrangement, only the CAR-T therapy cost would be refunded. The $30,000 to $35,000 nondrug costs are equivalent to many of today’s expensive medications. Should the patient experience more severe reactions, the costs would be even higher.

Though the cost estimates of CAR-T therapies are useful, the authors failed to examine the benefits of the therapies. Therefore, one hopes payers and other interested stakeholders continue to recognize this estimate is only part of determining their value.

 

Jedi Mind Trick: Changing Beneficiary Behaviors

 
 

In April, the Centers for Medicare & Medicaid Services (CMS) expanded the Medicare Diabetes Prevention Program (MDPP), a performance-based payment model aimed at preventing the onset of type 2 diabetes in eligible Medicare beneficiaries with an indication of pre-diabetes. This innovative model is the first successful program tested through the Center for Medicare and Medicaid Innovation (CMMI) to be expanded nationally. As an extension of the Diabetes Prevention Program (DPP) model test, the MDPP promotes structured clinical and behavioral intervention through a patient-centered curriculum and classroom-style group sessions.

Under the new guidelines, community-based organizations, in addition to traditional healthcare providers, can now enroll as qualified suppliers of these behavioral services. Per the MDPP, trained community health professionals will empower pre-type 2 diabetes beneficiaries to maintain at least a 5% weight loss through curriculum-driven coaching and proven behavior modification strategies. As an added bonus, CMS will offer these services to qualifying Medicare beneficiaries without copayment or referral.

By encouraging greater participation on a national scale, CMS is hoping the MDPP initiative will help improve outcomes for a large proportion of American seniors, more than a quarter of whom have type 2 diabetes. By driving quality of care reforms for a disease that is prevalent among a great subset of Medicare-eligible beneficiaries, CMS is hoping to tackle increasing healthcare costs through market-based incentives. CMS is forecasting that its investment in this model will save more than $180 million for the Medicare program, which currently spends more than $104 billion annually on this preventable disease.

 

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:

 
HEARD ON THE STREET
 

“We (physicians) pay our bills in a capitalist system but are reimbursed in a socialist system.”

 

 – Angus Worthing, MD, rheumatologist and Chair of Government Affairs, American College of Rheumatology

Source: “Deconstructing the Prescription Drug Supply Chain,” Politico Live, May 3

 

 
POLICY BY NUMBERS
 

12 Million

 

The Bill and Melinda Gates Foundation, together with Alphabet’s Larry Page and his family, are launching a $12 million grand challenge to spur research into a universal flu vaccine as of April 27.

Source: Grand Challenges website

 
UPCOMING MEETINGS & CONFERENCES
 

ISPOR 2018 International Meeting

May 19–23 l Baltimore, MD
Join our global HEOR experts at this year’s ISPOR 2018 International Meeting in Baltimore, May 19–23. Visit us at booth #801 to learn how Xcenda can apply real-world expertise in global HEOR, reimbursement, stakeholder insights, and market access consulting and communications to inform your strategies for your brand. View our 10 accepted posters in the exhibit hall, and join our issue panel and podium presentations. 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
Senior Director,
Health Policy
Xcenda

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

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

Kristine Flemister, PharmD
President | Xcenda

Tommy Bramley, PhD, RPh
President | Lash Group

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:

Andrew Gaiser | Stew Kaufman | Irene Sheynis | Scott Shields | Stephen Wilson

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

May 4, 2018

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