T-minus 1 hour: major speech from President Trump on prescription drug pricing at 2:00 PM ET.

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May 11, 2018

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FEATURED STORY
 

It’s Friday, I’m in Love: Policy Adrenaline Over Address on Prescription Drug Pricing

 
 

President Donald Trump is scheduled to deliver a major speech on tackling high drug prices at 2:00 PM ET this afternoon. The initiative represents one of his key campaign promises that was reiterated at Health and Human Services (HHS) Secretary Alex Azar’s swearing-in ceremony:

“We have to get the prices of prescription drugs way down and unravel the tangled web of special interests that are driving prices up for medicine and really hurting patients.”

Officials have been unusually close-lipped about details of the plan; however, the Administration did release a fact sheet for the President’s speech (with instructions not to publish). Accordingly, the President is planning to take immediate action, as well as solicit input on future actions, “to encourage innovation, while also promoting better price competition and addressing foreign freeloading.”

The fact sheet referenced the proposals outlined in his fiscal year 2019 budget request and indicated the White House will build on efforts already taken “to increase competition and curb high drug prices.” Examples of actions taken included the Food and Drug Administration’s (FDA’s) accelerated approval rate for generic drugs and the Medicare Part B payment change for drugs purchased by 340B covered entities.

Additionally, in a proposal to delay (again) implementing the 340B ceiling price and penalty rule (see related story below), the Health Resources and Services Administration (HRSA) appeared to list at least some of the targets of the upcoming drug-pricing initiatives:

“HHS is in the process of developing new comprehensive policies to address the rising cost of prescription drugs. Those policies will address drug pricing in government programs, such as Medicare Parts B and D, Medicaid, and the 340B discount drug program.”

An HHS notice regarding lowering drug prices and reducing out-of-pocket costs is under review at the Office of Management and Budget and is expected to be released after the stock markets close today.

Presumably, the Trump Administration learned some lessons regarding the ill-fated, withdrawn Part B Drug Payment Model proposed by the Obama Administration in March 2016. The vitriol expressed by the pharmaceutical industry, much of the patient community, and the Republican caucuses of the House and Senate, among other stakeholders, created an inhospitable environment for the Drug Payment Model. The rumors regarding the forthcoming Request(s) for Information (RFI) would seem to indicate Administration officials want to create programs that will at least have tacit support from the pharmaceutical industry. Rest assured, this weekend we will be devouring the news and, depending on the content, may have a special issue release early next week.

 

Four Key Questions About Payer/Provider Strategies

 
 

What do pharmaceutical manufacturers need to know about payer and provider strategies in 2018? Our own Corey Ford of Xcenda’s Reimbursement Strategy and Tactics team answers 4 questions on payer and provider strategies in the latest issue of PM360. Learn more

 

“As the health policy and broader landscapes continue to shift, programs should be nimble and continually assess if they have the resources in place to support their patient populations.”

Corey Ford, Reimbursement Strategy and Tactics, Xcenda

 
 

 
LEGISLATIVE UPDATES
   

A Heady Topper to Importation Efforts: VT Bill to Governor’s Desk

 
 

A bill allowing Vermont to import cheaper prescription drugs from Canada is headed to the governor. On Monday, the Vermont Senate voted unanimously 29-0 to concur with the House-passed version of S.175.

The bill would allow Vermont to contract with an approved Canadian prescription drug wholesaler for the importation of certain high-cost prescription drugs. Governor Phil Scott (R) has not indicated if he will sign the bill. Scott’s officials earlier this year said getting approval from federal regulators would be “problematic.”

According to AP, Scott spokeswoman Rebecca Kelley said Wednesday the governor supports the goal of making prescription drugs more affordable, but he has questions about the implementation of the bill. The importation of drugs has met stiff resistance from those steeped in understanding the consequences of such actions, despite the allure of potentially obtaining high-priced drugs less expensively from abroad. Last year, the 4 most recent FDA commissioners (2 from the Bush Administration and 2 from the Obama Administration) warned Congress that American patients will suffer if they import drugs from other countries, citing fake, substandard, and contaminated drugs as potential consequences.  

   

Legislative Bytes

 
 

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REGULATORY UPDATES
 

Medicaid States Learning to Walk the (New) Lines

 
 

On Monday, remarks by the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma reaffirmed the Administration’s commitment to allowing states to manage their Medicaid programs. However, Verma drew a line for those whose “circumstances change” and ruled out a request to implement lifetime limits.

In a letter to the Kansas Medicaid Director, CMS underscored its disapproval on the matter of lifetime limits. While the community engagement/employment sections of the Kansas proposal are still under review, CMS indicated it will not approve the current formulation by the state to impose a 3-year maximum lifetime limit on beneficiaries deemed able to work. Similar lifetime-limit proposals pending review by CMS for Arizona, Utah, Maine, and Wisconsin are now considered unlikely to be approved.

In line with the Administration’s recently issued Executive Order for state welfare programs to “improve employment outcomes,” on Monday CMS issued a letter of approval for New Hampshire to implement a “community engagement requirement” for eligible beneficiaries. The new rule stipulates adults aged 19 to 64, who enrolled in Medicaid when it was expanded under the Affordable Care Act (ACA), must engage in at least 100 hours per month of approved activities such as employment, education, or community service. Exemptions will be allowed for those who are disabled or pregnant.

Congressional critics, questioning the impact and administrative cost of any new work measures, have recently requested an investigation by the Government Accountability Office. Others have noted how the seasonal and irregular hours of part-time employment could disadvantage recipients required to satisfy a set monthly requirement.

None of this is likely to dampen the pace of reform. Consent from CMS to implement the new work rules has been granted to 4 states: Arkansas, Indiana, Kentucky, and New Hampshire. Six other states have submitted waiver requests, and 4 more states have issued public notifications of intent to draft a waiver request.

 

Fifth Time Is the Charm? Kicking the 340B Can Down the Road

 
 

Last Friday, HRSA proposed to once again delay the promulgation of the 340B ceiling price and penalty final rule. This would be the fifth time the Trump Administration has delayed implementing the Obama-era final rule originally scheduled to take effect on April 1, 2017.

HRSA cited the HHS plan to develop a broad drug-cost containment plan to cover Medicaid, Medicare Part B and Part D, and the 340B Program as justification for delaying the 340B rule.

According to HHS, delaying the implementation of the rule would “allow a more deliberate process for considering alternatives and supplemental regulatory provisions and allow for sufficient time for additional rulemaking.”

Released in January 2017, the final rule set guidelines for 340B price ceiling and penalties for manufacturers that knowingly overcharged covered entities. The rule required manufacturers to use an average manufacturer price (AMP)-based pricing formula for existing drugs and a wholesale acquisition cost (WAC) pricing formula for new drugs. The rule also finalized the “penny-pricing” policy that sets the 340B price for a drug at $0.01 for drugs with a ceiling price below $0.01.

In the proposed rule, HRSA stated that delaying the 340B rule would not negatively affect stakeholders in a “meaningful way” because most manufacturers are already following the penny-pricing standards and there are other remedies available to providers that believe they have not been provided with the full discount they are entitled under the 340B program.

Both chambers of Congress have been scrutinizing the 340B program for the past year, and legislative efforts to reform 340B are expected to continue as both the House and the Senate have introduced a number of bills. The Senate Health Committee has scheduled a second hearing on 340B for May 15.

 

CMS Aims to Make Healthcare in Rural America Great Again

 
 

This week, CMS debuted its novel Rural Health Strategy intended to provide access to high-quality, affordable healthcare to nearly 60 million Americans who live in rural America. “For the first time, CMS is organizing and focusing our efforts to apply a rural lens to the vision and work of the agency,” stated CMS Administrator Seema Verma. “The Rural Health Strategy supports CMS’ goal of putting patients first. Through its implementation and our continued stakeholder engagement, this strategy will enhance the positive impacts CMS policies have on beneficiaries who live in rural areas.”

The 8-page, agency-wide Rural Health Strategy (with accompanying fact sheet), based upon input from a multitude of government stakeholders, rural providers, and beneficiaries, focuses on 5 key objectives to achieve the agency’s vision for rural health:

  • Apply a rural lens to CMS programs and policies
  • Improve access to care through provider engagement and support
  • Advance telehealth and telemedicine
  • Empower patients in rural communities to make decisions about their healthcare
  • Leverage partnerships to achieve the goals of the CMS Rural Health Strategy

Poverty, a fragmented healthcare delivery system, lack of affordable insurance, and a multitude of other reasons have been documented as barriers to patient access for rural patients. According to the North Carolina Rural Health Research Program, 83 rural hospitals have closed since 2010.

CMS has already taken action implementing key steps laid out in CMS’ Rural Health Strategy; the agency hopes this focus on health equity for rural Americans will address the unique needs of this sometimes-overlooked population.

 

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:

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Manufacturer Survey: Proactive Communication of HCEI

 

We want to hear from you.

We invite manufacturer partners to participate in a survey regarding policy impacts on proactive communication of healthcare economic information (HCEI). Participants will receive a copy of the survey results once available AND are eligible for a drawing for a pair of Apple AirPods!

START SURVEY >
 
 
HEARD ON THE STREET
 

“A subset of ACOs has taken on significant downside risk. These ‘two-sided ACOs’ have shown significant savings to the Medicare program while advancing quality. And we applaud this success and support the boldness of providers that participate in these models.

“However, the majority of ACOs, while receiving many waivers of federal rules and requirements, have yet to move to any downside risk. And even more concerning, these ACOs are actually increasing Medicare spending, and the presence of these ‘upside-only’ tracks may be encouraging consolidation in the market place, reducing competition and choice for our beneficiaries. While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results.”

 – CMS Administrator Seema Verma, hinting at the Administration potentially enforcing when accountable care organizations (ACOs) must shift from upside-only risk (“one-sided ACOs”) to upside and downside risk (“two-sided ACOs”)

Source: “Speech: Remarks by CMS Administrator Seema Verma at the American Hospital Association Annual Membership Meeting,” May 7

 

 
POLICY BY NUMBERS
 

91.4% and 37.4%

 

Maryland insurer CareFirst is requesting a 91.4% increase to its premiums for its individual exchange plans, while Kaiser Foundation is requesting a 37.4% increase for similar plans.

Source: “Rate Requests,” Maryland Insurance Administration Rate Review

 
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:

Zachary Bridges | Ashanti Johnson | Scott Shields | Stephen Wilson

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

May 11, 2018

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