We examine final guidance from the FDA on communications between manufacturers and payers.

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June 15, 2018


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According to the Map, We’ve Gone 4 Inches: Progress on Communications


On Tuesday, the Food and Drug Administration (FDA) finalized 2 guidances to clarify its policies on communicating medical product information to payers and to inform industry on how to communicate information about products in a manner consistent with FDA-required labeling. An accompanying statement from FDA Commissioner Scott Gottlieb discussed how the guidances could “enable better access to medical products and possibly more affordable options for Americans.”

Payer Communications

The FDA’s final guidance on payer communications includes 4 new questions and answers from the draft guidance regarding communicating information about unapproved products or unapproved uses of approved products to payers, formulary committees, and similar entities.

In a change from the draft version, the final payer communications guidance discusses how drug and device makers can communicate “truthful, non-misleading, and appropriate” information across the life cycle of their products. The guidance also states how manufacturers can discuss information about unapproved products or unapproved uses of approved products in a truthful, non-misleading manner.

“Consistent With the FDA-Required Labeling”

The second guidance, “Medical Product Communications That Are Consistent With the FDA-Required Labeling,” provides the FDA’s views on manufacturers’ communication of information that is consistent, but not in the FDA-approved labeling.

Gottlieb mentioned that “[t]his information, such as data from post-market studies and surveillance of a product’s approved uses, or additional information from the pre-market studies that were used to support approval of the product, may help inform decision-making regarding patient care.”

The agency clarified in the final guidance that it does not intend to rely on such communications as the basis for establishing a new intended use for a product different from its legally marketed use(s), provided the communication is consistent with required labeling. This should ease industry concerns that the FDA could use such communications to find that a company is marketing a product for an unapproved intended use.

The final guidances could help communications between payers and manufacturers and establish how the value of medicines can facilitate a shift toward value-based payment arrangements.


Serving Up a Nothing-Burger: Azar Testifies at Senate HELP Committee


On Tuesday, the Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing, “The Cost of Prescription Drugs: Examining the President’s Blueprint ‘American Patients First’ to Lower Drug Prices,” to have Health and Human Services (HHS) Secretary Alex Azar testify on President Trump’s efforts to lower prescription drug costs.

Azar reiterated the 4 key issues facing the country leading to high drug prices as outlined in the President’s Blueprint, and then listed the following approaches to fix the issues:

  • Restructure the current system, which Azar said rewards pharmacy benefit managers (PBMs), drug makers, and distributors to keep list prices high
  • Require manufacturers to disclose list prices on their direct-to-consumer (DTC) ads
  • Allow responsible communication between manufacturers and insurers on drug effectiveness and value
  • Eliminate or modify the 6 Part D protected classes
  • Harness private-sector negotiation by moving drugs from Part B to Part D
  • Prevent manufacturers from “gaming” the system through Risk Evaluation and Mitigation Strategy (REMS) abuses and withholding generic entry

Republican Senators were generally supportive of Azar. Democrats, however, repeatedly questioned him about why President Trump pledged to allow government negotiation of drugs and re-importation, yet those mechanisms were not included in his plan. Azar replied by commenting that the Administration was going to allow negotiation in Part B (by shifting some of those drugs to Part D and also with a competitive acquisition program [CAP]), and that allowing importation of drugs would introduce safety concerns.

When questioned about President Trump’s statement a couple of weeks ago that some manufacturers would announce “voluntary massive drops” in drug prices, Azar simply assured lawmakers that manufacturers are considering “substantial and material” price cuts, and shifted blame to PBMs for impeding their ability to lower prices due to rebates on high list prices. Senator Elizabeth Warren (D-MA) said she had sent letters to several large manufacturers, but none has cut list prices.

The hearing brought little new information to light. Rumors abound about upcoming proposed rules and requests for information around CAP; we’ll bring you the latest as we get it.


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Legislative Bytes


HPW Rebuild


Refusing to Call It Quitsies: GOP Finds New Angle to ACA Repeal


In a recent attempt to repeal the Affordable Care Act (ACA), Texas and 19 other Republican states filed a motion in February challenging the constitutionality of the ACA provision to require individuals to maintain “minimum essential coverage” [ACA § 5000A (a)]. The individual mandate is no stranger to judicial scrutiny but was ultimately found constitutional under Congress’ taxing power by the 2012 Supreme Court ruling in National Federation of Independent Business (NFIB) v. Sebelius.

Opponents of the ACA are now challenging the constitutionality of the same provision under new legislative circumstances—the passing of the Tax Cuts and Jobs Act of 2017. The Republican-driven legislation amended ACA §5000A (c) to eliminate the penalty paid for failing to maintain “minimum essential coverage.” Plaintiffs in Texas v. US argue that, without the penalty generating revenue for the government, the individual mandate is now a violation of Congress’ power under the Commerce Clause and can no longer be reasonably considered a tax. Quoting the original NFIB v. Sebelius ruling, the community-rating and guaranteed-issue provisions protecting patients with pre-existing conditions are not severable from the individual mandate and, therefore, should also be eliminated.

In letters addressed to congressional leadership, Attorney General Jeff Sessions stated the Department of Justice agrees with the plaintiff and, therefore, would not be defending the ACA in the suit against its constitutionality. This is a rare break from the traditional responsibilities of the executive branch to uphold laws enacted by Congress. Opponents of the department’s decision are condemning the Administration for “abandoning their duty to protect the law of the land and families’ healthcare just to satisfy their special interest donors.”

Eliminating protections against patients with pre-existing conditions may further destabilize the healthcare system and drive up uninsured rates and out-of-pocket costs. The Justice Department’s decision could ensure healthcare reform will continue to be a top issue leading into the midterm elections just a few months away.


More Than You Can Imagine: Outpatient Added to Maryland’s Grand Experiment


Building on the success of Maryland’s All-Payer Program for inpatient services launched in 2014, the state and the Center for Medicare and Medicaid Innovation (Innovation Center) are now expanding the program to include outpatient services. The model will launch as the Total Cost of Care (TCOC) model and will run for 5 years beginning January 1, 2019 through the end of 2023.

Maryland’s All-Payer inpatient model provides hospitals with global budgets providing a fixed amount of revenue for the upcoming year. Proponents claim that using a global budget incentivizes hospitals to meet target metrics of enhancing quality, improving health outcomes, and constraining the growth of hospital cost per capita. Earlier this year, Maryland officially announced that its hospitals successfully met those metrics by making quality improvements such as reducing unnecessary admissions and reducing hospital-acquired conditions.

The Innovation Center believes the TCOC model expansion into outpatient services will create incentives for providers to coordinate both inpatient and outpatient services that will provide patient-centered care across the care continuum. The model’s financial targets are expected to save a total of $1 billion over 5 years.

The TCOC model includes 3 programs focused on value and performance:

  1. The Hospital Payment Program creates a financial incentive for hospitals to provide value-based care and to reduce the number of unnecessary hospitalizations, including readmissions.
  2. The Care Redesign Program (CRP) allows hospitals to make incentive payments to nonhospital healthcare providers who partner and collaborate with the hospital and perform care-redesign activities aimed at improving quality of care.
  3. The Maryland Primary Care Program (MDPCP) offers a performance-based incentive payment to healthcare providers to provide “advanced primary care services” and incentivize them to reduce the hospitalization rate and improve the quality of care for their attributed Medicare beneficiaries, among other quality and utilization-focused improvements.

Maryland selected 6 high-priority areas to focus on improving population health: substance-use disorder, diabetes, hypertension, obesity, smoking, and asthma.

Maryland’s All-Payer Program for inpatient services has been a radical departure from Medicare’s Part A program, and this new inclusion of outpatient services continues the state’s departure from how the other 49 states are reimbursed by the Centers for Medicare & Medicaid Services (CMS). Whether or not the 5-year model works, it will provide healthcare researchers valuable information. The Old Line State exemplifies the concept of a state laboratory.


Bundled Payment Programs: To Mandate, or Not to Mandate


Earlier this month, Health Affairs published a study comparing baseline performance outcomes and characteristics among hospitals participating in Medicare’s voluntary (Bundled Payments for Care Improvement initiative, or BPCI) and mandatory (Comprehensive Care for Joint Replacement Model, or CJR) joint-replacement bundled payment programs.

The report found that each program engaged different types of hospitals, which may account for some of the differences between BPCI and CJR hospitals. Per the research, BPCI hospitals had higher mean patient volume, were larger, were likely to be not for profit, and were more teaching intensive than those in the mandatory CJR program. The report also identified that BPCI hospitals had costlier institutional post-acute care provided by inpatient rehabilitation facilities and home health agencies. In comparison, CJR-mandated hospitals exhibited greater baseline spending for inpatient rehabilitation facilities, skilled nursing facilities, and home health agencies—despite both groups exhibiting similar risk exposure, care quality, and baseline episode spending.

The study’s authors concluded hospitals that bundle joint replacement in the voluntary and mandatory CMS programs vary with respect to a number of organizational characteristics, but not baseline spending or quality. The authors believe a mix of both mandatory and targeted voluntary programs may be required to engage a broad range of hospitals to further improve cost savings and quality care.

It seems unlikely that the findings will impact government programs anytime soon; the current Administration has been halting mandatory programs developed by the Obama Administration. However, the findings provide food for thought for private sector ventures as well as state governments as they grapple with implementing value-based care.


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!


“It’s like saying you served dinner when you only wrote a grocery list. And in this case, most of the ingredients on the list are a big nothing-burger.”

 – Senator Patty Murray (D-WA), following her criticism that statements such as the President’s Budget and the Blueprint are vague proposals rather than actual policies

Source: “The Cost of Prescription Drugs: Examining the President’s Blueprint ‘American Patients First’ to Lower Drug Prices,” Senate HELP Committee hearing, June 12





An increasing number of new generics may affect drug prices less than regulators and policymakers hope because biological medicines have a growing influence on the market, and the number of patent expirations is decreasing. Generic competition won’t affect 46% of the estimated sales revenue of the top 100 drugs through 2023.

Source: “Is New Generic Competition Enough to Lower Drug Costs?” PwC, June 2018


AMCP Webinar: Managing Care in the Wave of Precision Medicine

June 20 | Webinar
Xcenda’s Kristen Migliaccio-Walle, Director, Global HEOR, will lend her expertise to the discussion. Free to AMCP members. Learn more


CBI Reimbursement and Access 2018

August 15–16  | Philadelphia, PA
Xcenda’s Corey Ford, MPH, Director of Reimbursement Strategy and Tactics, will team up with Lash Group’s Jim Dickey, Director of Product Experience, to present a session titled, “Emerging Trends in PBM Restrictions on Commercial Copay Assistance.” They will examine and discuss the emerging copay accumulator trends. 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.


Jennifer Snow
Senior Director,
Health Policy

Scott Shields
Associate Director,
Health Policy



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


Reeya Patel | Shawn Rhodus | Irene Sheynis | Scott Shields


Laurie Kozbelt | Ellen Olson


June 15, 2018


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