CMS issues proposed rule to require list price for prescription drugs on broadcast TV.

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Oct. 19, 2018

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FEATURED STORY
 

As (May Be) Seen on TV: Drug Prices Could Be Required in TV Ads

 
 

On Monday, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to require direct-to-consumer (DTC) television advertising of prescription drugs and biological products, directly or indirectly reimbursed by the Medicare and Medicaid programs, to include the WAC (wholesale acquisition cost), or “list price,” of the product. “Television advertising” includes broadcast, cable, streaming, and satellite. Print communications would not be included under this proposed rule.

The DTC requirement would apply to any prescription drug or biological product that has a list price greater than $35 for a 30-day supply or typical course of treatment. The accompanying required statement would acknowledge that, if patients have health insurance, their costs may be different. This statement is expected to be at the end of ads and “presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily.”

Interestingly, the proposed rule also states, “To the extent permissible under current laws, manufacturers would be permitted to include an up-to-date competitor product’s list price, so long as they do so in a truthful, non-misleading way.”

According to the proposed rule, the Administration would maintain a public list of drug products found to be in violation of the price disclosure requirement; however, the primary enforcement mechanism would be the threat of lawsuits under the 1946 Lanham Act, which regulates unfair competition in the form of false or misleading advertising.

The price disclosure in the DTC proposed rule has a 60-day comment period and, if finalized, could be implemented within 30 days from the publication date of the final rule.

In anticipation of the proposed rule, early Monday PhRMA released voluntary principles for DTC that include providing the web address of a site that would allow patients to see the list price of the medicine, out-of-pocket costs, or other context about the potential cost of the medicine and available financial assistance.

However, in a keynote address at the annual Academy of Medicine forum Monday, Health and Human Services Secretary Alex Azar criticized PhRMA’s initiative as falling far short, stating, “We will not rely on voluntary action to accomplish our goals.”

Disclosure of drug prices in DTC television ads was included in the Administration’s drug pricing blueprint released in May. To date, the Administration has implemented several proposals from the blueprint, including:

  • Allowing Medicare Advantage plans to use step therapy for Part B drugs (new starts) in plan year 2019
  • Indication-based formulary design in Part D plans starting in plan year 2020
  • Prohibition of gag clauses in pharmacy contracts for commercial, exchange, and Medicare plans
 
BLUEPRINT WATCH
 

Showing Us How It’s Done? CVS Health Plan With POS Rebates

 
 

Earlier this month, CVS Health announced a new Medicare standalone prescription drug plan (PDP), “SilverScript Allure,” among its offerings for 2019. The unique feature of this Part D plan is that it will apply a portion of manufacturer rebates to certain drugs on Tiers 3, 4, and 5, a policy offered by the Trump Administration in its 5-point Part D plan released with its 2019 budget request.

CVS Health is positioning the audience for SilverScript Allure to consumers who take brand medications in higher tiers. However, the anticipated monthly premium for Allure is $80.00 in the Washington, DC area, higher than the other SilverScript plans as well as more than twice as expensive as the $32.90 national average for Part D premiums. This raises the question of whether including rebates in point-of-sale purchases will actually provide beneficiaries with significant cost savings.

Notably, the plan does not specify what percentage of the manufacturer rebates is applied, nor does it list upfront the drugs included in the feature of applying rebates to the out-of-pocket costs.

There is speculation (after all, it did launch in DC) that CVS Health priced the premium as high as it did to stave off Administration discussions about potentially requiring plans to share rebates at the point-of-sale, per its 5-point plan to “modernize” the Medicare Part D drug benefit. Alternatively, it could be priced higher due to CVS Health’s uncertainty about a new plan offering.

HPW Rebuild

 
A CARTOON INTERLUDE
 

A Love Note to Immunologists: CAR T Cells Destroy Their Nemesis

 
 



Source: “A Cure Within: Scientists Unleashing the Immune System to Kill Cancer,” by Neil Canavan (Cold Spring Harbor Laboratory Press, 2017)

 

Responding to Stakeholder Input: Finding the Patient Voice in ICER’s Value Assessments

 
 

We partnered with Partnership to Improve Patient Care (PIPC) to quantify the extent to which ICER incorporates stakeholder input in its final assessments, particularly patients. The objective of this analysis was to better understand the extent to which ICER meaningfully engages patients and other stakeholders throughout its public comment process. Download the report to learn more. 

Download the report now >

 

 

HPW Rebuild

 
REGULATORY UPDATES
 

Reading Between the Lines: Reinforcing Marketplace “Flexibility”

 
 

On Tuesday, CMS Administrator Seema Verma highlighted the Administration’s recent efforts to “preserve and strengthen” Medicare with continued efforts to move the program toward value-based care. At the America’s Health Insurance Plans (AHIP) 2018 National Conference on Medicare, Verma noted the disadvantages of a “Medicare for All” program, including higher healthcare spending, less innovation, and potential impacts on healthcare for seniors. She also described how policy changes under Part D and Medicare Advantage are helping to improve the program as evidenced by enrollment growth, increased plan choices, and premium decreases.

Verma highlighted the Administration’s ongoing and future plans to lower cost and improve quality:

  • Empower Part D plans to bargain for better rates with manufacturers
  • Develop new consumer tools comparing services and cost between outpatient hospital care and ambulatory surgery centers
  • Allow more flexibility for Medicare Advantage to address the social determinants of health, such as adult day care services, in-home support services, caregiver support services, and home-based palliative care
  • Adopt commercial approaches to improve quality and lower cost, such as step therapy
  • Bring transparency to healthcare records by allowing patients access to them
  • Reduce regulatory burdens on providers and streamline quality-reporting requirements
  • Continue to innovate with alternative payment models, and develop new models that identify “high-value providers” and alternative payment models

Patient advocates remain concerned that choice of language (flexibility, empower) favors plans and revenue over patient access. While Democrats seem poised to take back control of the House next month, near-term prospects for “Medicare for All” legislation remain dim with Republicans entrenched in the Senate and the White House. However, the Administration remains focused on efforts to address some of the issues officials believe are driving increased costs, such as drug pricing, lack of interoperability, overly burdensome regulations, and inefficiencies.

 

Bundle Me This: CMS Announces Participants in BPCI Advanced Model

 
 

Last week, CMS announced the participation of 1,299 entities in the Administration’s Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model. A total of 1,547 Medicare providers and suppliers are participating in this alternative payment model, including 832 acute care hospitals and 715 physician group practices. Participants will receive a single bundled payment for certain episodes of care based on quality measures, instead of payment for each individual service under the traditional fee-for-service system.

The voluntary BPCI Advanced Model launched a year after the original BPCI Initiative ended and will continue through December 31, 2023. Initially, the program will include 32 bundled clinical episodes—29 inpatient and 3 outpatient. Participants may receive an additional payment if total costs of each episode of care are less than a spending target, or they may be required to repay Medicare if expenditures exceed the target price.

The BPCI Advanced Model differs from the original BPCI Initiative in several ways:

  • Outpatient episodes are included for the first time, as well as additional bundled clinical episodes.
  • Participants will receive preliminary target prices from CMS before the start of each model year to help plan for the year.
  • Participants may be exempt from reporting requirements under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015’s Merit-Based Incentive Payment System (MIPS) since the new model qualifies as an Advanced Payment Model (Advanced APM).

CMS also released an evaluation report of Models 2–4 of the original BPCI Initiative and an accompanying “Findings At-a-Glance” document.

Additional models are expected to be launched in the future as CMS works to expedite value-based models to improve quality and reduce costs, moving further away from the fee-for-service system. This could result in a change in which services and drugs these model participants decide to use during the episode of care to contain costs.

 

MACF: Making America Cancer Free

 
 

A recent study published in JAMA analyzed mean cancer death rates with differing income levels to determine associated factors that may contribute to cancer disparities. Notably, the study reports that high-income counties (median income $55,780) had a mean cancer death rate of 185.9 per 100,000 person years, 43.8 points lower than low-income counties (median income $33,445). Besides having lower income, counties with smaller populations, in rural areas, and with reported poor health had the highest death rate.

The final analysis suggested the factors that most likely explained this disparity were food insecurity (accounted for 19.1% of the association between county income and cancer deaths), low-quality healthcare (17.9%), and smoking (12.7%). Other factors, in order of decreasing association, included physical inactivity, obesity, unaffordable care, state Medicaid fee index, and state smoke-free laws. The study also found that a disproportionate number of low-income county residents with high cancer deaths were non-Hispanic black Americans.

The study highlights the harsh reality that while advancements in oncology treatments have reduced cancer mortality, there has not been a corresponding reduction in cancer disparity, due in part to a lack of targeted public health programs. Future policies should target the mediating factors in this study to help achieve equity in cancer outcomes. It is worrisome that these disparities remain. Targeted public health programs and programs that will strive toward improved outcomes for patients in disadvantaged counties seem essential to reduce disparities in cancer deaths across the country.

 

Business in the Front, Party on the Back: Business of ACA Insurers Improved

 
 

Last week, the Henry J. Kaiser Family Foundation (KFF) released an issue brief examining financial data that offer evidence of improving insurer profitability in the individual insurance market under the Affordable Care Act (ACA).
 
Kaiser reviewed premiums, claims, medical-loss ratios, gross margins, and enrollee utilization data from second quarter 2011 through second quarter 2018. Data for 2017 indicate insurers began returning to profitability levels seen prior to when the exchanges began in 2014. The Kaiser brief suggests that the rate increases of 2017 were only a necessary one-time market correction to adjust for a sicker-than-expected risk pool.

Data for the first 6 months of 2018 indicate better financial performance than in previous years. According to Kaiser, the premium increases in 2018 were necessary to account for policy uncertainty and the cessation of cost-sharing subsidy payments, although subsequently reinstated.

For 2019, Kaiser projects only “modest” to flat or even decreasing premiums. A more pessimistic forecast was released in February 2018 from the Urban Institute, with premiums expected to rise an average of 18% in 2019 along with declining enrollment. Among insurers recently requesting large average rate increases for 2019 were Washington State at 19% and New York at 24%.

Concluding there is currently no evidence to suggest a future collapse of the individual insurance market, the Kaiser brief emphasizes the uncertain impact of policy reforms. KFF believes administrative actions, such as repeal of the individual mandate penalty taking effect in 2019 and expansion of short-term, limited-duration insurance options, remain potent dangers to the future of the individual market.

 

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:

  • CMS announced 2019 Medicare Parts A and B premiums and deductibles:
    • About 99% of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.
    • The Medicare Part A inpatient deductible that beneficiaries will pay when admitted to the hospital is $1,364 in 2019, an increase of $24 from $1,340 in 2018.
    • The standard monthly premium for Medicare Part B enrollees will be $135.50 for 2019, a slight increase from $134 in 2018.
    • The annual deductible for Medicare Part B beneficiaries is $185 in 2019, an increase from $183 in 2018.
  • CMS sent a proposed rule to the Office of Management and Budget (OMB), “Medicare Coverage of Innovative Technologies.”
  • The Food and Drug Administration sent a proposed rule to OMB, “Nonprescription Drug Product With an Additional Condition for Nonprescription Use.” The proposed rule is intended to increase access to nonprescription drug products and would establish requirements for a drug product that could be marketed as a nonprescription drug product with an additional condition that an applicant must implement to ensure appropriate self-selection, appropriate actual use, or both by consumers.
  • A JAMA Viewpoint explores the role of group purchasing organizations (GPOs) in healthcare, concerns with their current payment structure, and potential solutions.
  • ProPublica and NPR co-published a story describing how Montana hired a former insurance insider to help bring its employee health plan out of financial crisis.


 

Trends in Healthcare: Disruptors and Opportunities

 
 

AMCP Foundation Research Symposium
Monday, October 22 | 12:30–5:30 PM ET

Xcenda is excited to collaborate with the AMCP Foundation in sharing the latest industry insights at AMCP Nexus 2018 in Orlando.

Matt Sarnes, PharmD, and Breanna Popelar, PharmD, MS, will unveil the latest research findings on key trends impacting the healthcare industry. A variety of stakeholder perspectives will be shared on key complex yet interrelated topics affecting the future of healthcare—from innovative and curative therapies, to expedited drug approval, to challenges in patient affordability.

Learn more about our contributions to AMCP Nexus >

 

 

 
HEARD ON THE STREET
 

“On the pricing front overall, I think as we look into 2019 and what we’re seeing in the contract…we’re going to see a continued evolution in some of the categories where there are very high levels of competitors. But, it’ll be an evolution in pricing, not a revolution or a step change…. [I]t definitely continues to be an area of focus for the payers and in [those] heavily contracted categories.”

– Jennifer Taubert, EVP and Worldwide Chairman—Pharmaceuticals, Johnson & Johnson

Source: Johnson & Johnson (JNJ) Q3 2018 Results—Earnings Call Transcript, October 16

 

 
POLICY BY NUMBERS
 

- 1.5%

 

The average premium for the second-lowest-cost silver plans for the 2019 coverage year will drop by 1.5%, the first time average premiums have dropped since the implementation of the federally facilitated exchange in 2014.

Source: “Premiums on the Federally-facilitated Exchanges drop in 2019,” CMS, October 11

 
UPCOMING MEETINGS & CONFERENCES
 

AMCP 2018 Nexus

October 22–25 | Orlando, FL
Xcenda is proud to support AMCP at this year’s AMCP Nexus conference in Orlando. We’re also proud to contribute research and present findings at the AMCP Foundation Research Symposium on Monday, October 22 from 12:30–5:30 PM ET. Don’t miss meeting Xcenda’s team of experts and consultants at booth #407. Students are also welcome to join our team at the Residency and Fellowship Showcase on Wednesday, October 24, 5:00–8:00 PM ET. 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
Vice President,
Reimbursement and
Policy Insights,
Xcenda

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

Amy Grogg, PharmD
Senior Vice President | Commercialization Solutions | 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 | Commercial Consulting | Xcenda

CONTRIBUTING AUTHOR:

Stacie Heller | Isabell Kang | Jenna Kappel | Scott Shields | Soham Shukla | Stephen Wilson

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

Oct. 19, 2018

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