Vermont Governor Phil Scott (R) signs bill to allow importation of prescription drugs from Canada.

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May 18, 2018

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FEATURED STORY
 

We Give the World a Future Princess. In Return? We Want Importation

 
 

On Wednesday, Vermont Governor Phil Scott (R) signed legislation permitting the importation of prescription drugs from Canada into the state. Last week, the Vermont Senate voted unanimously to concur with the House-passed version of bill S.175. The bill allows Vermont to contract with an approved Canadian prescription drug wholesaler for the import of certain high-cost prescription drugs.

Several steps remain before the program would take effect. The law must still be certified by the US Department of Health and Human Services (HHS)—a tall order—and Vermont must establish a funding mechanism to pay for the program.

The law is built on model legislation from the National Academy of State Health Policy (NASHP). Several other states allow individuals to import drugs from other countries, but not wholesalers. According to Trish Riley, NASHP’s Executive Director, requiring wholesalers to import the drugs is a key distinction that provides assurances the drugs coming into the state would be safe.

Importation was not part of the options sought by the Administration in its Blueprint proposals. HHS Secretary Alex Azar said the idea of importing prescription drugs from another country is a “gimmick,” and drug companies have also criticized such legislation. Pharmaceutical Research and Manufacturers of America (PhRMA) has maintained that “patient safety must be our top priority.”

This legislation could be a milestone for how states and individuals access high-cost prescription drugs. There are valid concerns, however, regarding the legitimacy and safety of prescription drugs procured outside the US. It will need to be seen if this moves forward or stalls; safety first.

 
EYES ON THE BLUEPRINT

We’re as interested as you in following what’s next with President Trump’s Blueprint to Lower Drug Prices. We’ve created a new section in Health Policy Weekly that will track the latest activities on drug reform. The first week after the President’s announcement did not disappoint.

   

The Long Walk: Administration Seeks Public Input on Drug Pricing Plan

 
 

President Trump’s Blueprint to Lower Drug Prices, outlined in his speech on Friday (and covered in our Health Policy Weekly Special Edition on Monday), sets the stage for reforming drug markets and reducing drug prices, increasing price transparency, and promoting competition.

Monday started the flurry of speeches by Administration officials discussing various aspects of the Blueprint, with HHS Secretary Azar elaborating on the drug pricing plan, which coincided with the department essentially re-releasing the Blueprint via the Federal Register so as to make an official Request for Information (RFI). Responses are due in 60 days.

During the talk, Azar indicated moving some or all of the Part B drugs to the Part D program, as the Administration believes that has the best promise of constraining the costs of high-priced medicines. Azar suggested 3 options for shifting Part B drugs to Part D: 1) moving all Part B drugs into Part D; 2) target “the drugs where [the US is] getting the rawest deal from pharma compared to other industrialized countries; and 3) focusing on drugs that treat the same condition to ensure they are reimbursed under the same (Part D) umbrella.

Azar also said the Administration is reviving a moribund program: the Competitive Acquisition Program. A request for proposal will be issued “in short order,” as he believes “there are more private sector entities equipped to negotiate these better deals in Part B, and we want to let them do it.”

On Tuesday, the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma mentioned the agency would be releasing a new version of its Drug Spending Dashboard. (See story below.)

Also on Tuesday, Food and Drug Administration (FDA) Commissioner Scott Gottlieb mentioned at an event hosted by the Alliance for Health Policy that the agency would launch a website listing companies from which prospective generic applicants have been unable to obtain the necessary samples of the reference listed drug due to limited distribution (including drugs under Risk Evaluation and Mitigation Strategy [REMS]). (See story below.)

Thursday brought a letter to Medicare Part D plans telling them that CMS finds any use of pharmacist “gag” clauses unacceptable.

These seem to be the first steps of many to come; the RFI solicits input on potential changes that will directly impact all entities in the pharmaceutical development and delivery continuum. Stakeholders should take advantage of the opportunity and see that recommendations are as steeped in evidence as possible. 

   

Fascinators: Bowler Us Over With Drug Spending Dashboard

 
 

This week, CMS updated its Drug Spending Dashboard and Medicare Part D Prescriber Public Use File to include 2016 drug spending and utilization data for fee-for-service Medicare enrollees. Data for Medicare Advantage (approximately 30% of the Medicare population) are unavailable.

Between 2012 and 2016, Part B drug spending increased over 5% annually. In 2016, the top 5 Part B drugs accounted for $7.7 billion (30%) of the $25.7 billion total drug spending.

CMS’ dashboards are timely given the recent discussions around controlling drug costs. But they do not necessarily provide context. While President Trump and Secretary Azar have highlighted policies that would move drugs from the Part B to the Part D benefit, these data suggest that Part B drug spending growth has been slower than spending growth in Part D.

Broad-sweeping policies, such as the President’s Blueprint, may necessitate much more analysis than what has currently been reviewed by the Administration to determine what may be increasing drug spending, if the expenditures are aligned with general healthcare market trends, if the spending increases are due to drug pricing itself or to utilization patterns, and if this is more a question of Part B vs Part D benefit design or the cost of drugs. And we sometimes step back and wonder if the questions are framed wrong to begin with—should we be spending MORE on drugs (utilization) and not less? To look at drug spend in a silo is dangerous. Xcenda will be focusing on many of these issues in the coming months and will provide our readers with insights into these issues. 

   

With a Markle in His Eye: Gottlieb Looks to Shame Offenders

 
 

On Thursday, the FDA released a list of pharmaceutical manufacturers that may, as Commissioner Gottlieb said, “create obstacles for generic developers in purchasing samples of their brand drugs.”

Generic drug developers generally need 1,500 to 5,000 units of the brand drug to develop their generic product and/or to conduct testing to show that their product is bioequivalent to the brand drug for FDA approval. Without these samples, generic drug makers may not be able to develop generic alternatives. Gottlieb reported that the FDA “has heard” that some brand companies adopt tactics to obfuscate efforts by generic companies to purchase these brand drugs at a fair value and in the open marketplace.

Meanwhile, Congress is currently debating the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which would provide generic manufacturers the ability to pursue legal action against companies suspected of delaying access to testing samples. (See related story in Legislative Update.)

The FDA acknowledged that the manufacturers have not been investigated or confirmed of “blocking access”; as a result, critics are referring to the list of manufacturers as merely a “shaming” effort. 

 

Value Assessment Frameworks in an Era of Personalized Medicine: Shared Objectives or Irreconcilable Differences?

 
 

Xcenda’s Kristen Migliaccio-Walle, Director of Global HEOR, moderates a panel at this year’s ISPOR International Meeting in Baltimore on Wednesday, May 23. The panel will expose and debate the challenges of valuing personalized medicines in the current value assessment framework environment and identify areas of consensus on which newer methodologies can be built.

Panelists include:

  • Dan Ollendorf, PhD, Chief Scientific Officer for the Institute of Clinical and Economic Review (ICER)
  • Robert W. Dubois, MD, PhD, Chief Science Officer & Executive Vice President, National Pharmaceutical Council (NPC)
  • Sara Traigle van Geertruyden, JD, Executive Director, Partnership to Improve Patient Care (PIPC)

Learn more about this issue panel and our contributions to ISPOR Baltimore.

 
 

 
LEGISLATIVE UPDATES
 

Legislative Byte

 
 

HPW Rebuild

 
REGULATORY UPDATES
 

Like Lemon and Elderflower, a Little Sweet and a Little Bitter: 340B Oversight

 
 

The Government Accountability Office (GAO) reports the Health Resources and Services Administration’s (HRSA) efforts to improve program integrity of the 340B program have fallen short as some, but not all, of the inadequacies identified in September 2011 have been addressed.

GAO found HRSA has made some progress on 2 recommendations:

  1. Audits of covered entities. GAO recommended HRSA conduct audits of covered entities, rather than relying on covered entities and manufacturers to ensure their own compliance with 340B program requirements. HRSA now audits 200 covered entities a year, less than 2% of entities participating in the 340B program.
  2. Guidance for manufacturers. GAO recommended HRSA refine its guidance for manufacturers for handling cases in which distribution of drugs is restricted, such as when there is a shortage in drug supply. In May 2012, HRSA clarified its policy and provided additional detail on the type of information manufacturers should include in their restricted-distribution plans.

However, GAO found that HRSA has yet to clarify guidance on patient and hospital eligibility for the program. The number of 340B covered-entity sites—38,396 as of 2017—has doubled over the last 5 years, and the number of contract pharmacies has also increased significantly, from about 1,300 in 2010 to around 18,700 in 2017. Given this significant growth, coupled with no clear guidance specifying patient or hospital eligibility, or how the revenue is to be used, GAO advised HRSA to make very specific improvements.

Although HRSA agreed with the GAO recommendations on patient and hospital eligibility, and subsequently released proposed guidance in 2015, the guidance was withdrawn in January 2017 “in accordance with recent directives to freeze, withdraw, or postpone pending federal guidance.” HRSA did inform GAO that it is in the process of determining next steps related to this guidance.

GAO has ongoing work related to the 340B program and plans to issue its reports this summer.

Obviously, the 340B program is in a state of flux, as evidenced by the withdrawn regulations, Congress’ hearings on the program in the past year, and its inclusion in the RFI for the Administration’s drug pricing plan. Legislation presumably is forthcoming, and the RFI will spark quite a few suggestions for changing the program’s operation. Many critics believe the 340B program is distorting the drug market and counterintuitively increasing prices for the federal government, commercial insurers, and patients.

 

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:

HPW Rebuild

 

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
 

“Let me be really clear about this: we are going to bring negotiation to Part B drugs, and we are going to give Part D plans more bargaining power. It’s going to happen, so it would be most productive if the pharmaceutical industry came to us with a plan for these changes. If pharma doesn’t come to us with a plan for which drugs make sense to move from Part B to D, we’ll decide that for them. And if pharma doesn’t come up with a solution to pricing the drugs where Part D is currently getting almost no discounts, we’ll fix that problem unilaterally, too…. As the President said last week, the gravy train is about to be derailed.”

 – HHS Secretary Alex Azar, speaking at an event hosted by the American Enterprise Institute

Source: “Fixing Healthcare: Driving Value Through Smart Purchasing and Policy,” May 16

 

 
POLICY BY NUMBERS
 

$79 vs $14 vs $9

 

A Kaiser Family Foundation (KFF) issue brief found health insurers enjoyed their best year ever in the exchange markets in 2017, even with the Trump Administration ceasing payments for cost-sharing subsidies in the last quarter of the year. The KFF analysis found that individual market insurers, after covering medical costs, had $79 per member per month in excess revenue in 2017, up markedly from $14 in 2016 and $9 in 2015.

Source: “Individual Insurance Market Performance in 2017,” KFF, May 17

 
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:

Amanda Forys | Maureen Holmes | Milda Kaitz | Scott Shields

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Tia O’Brien

 

May 18, 2018

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