The Part B Access for Seniors and Physicians (ASP) Coalition voices “great concern” about the CMS proposed IPI model.

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Dec. 14, 2018

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FEATURED STORY
 

Father Christmas. St. Nicholas. Papi Noel:
International Prices Are Not Like Comparing Santas

 
 

On Monday, the Part B Access for Seniors and Physicians (ASP) Coalition sent a letter to Senate Majority Leader Mitch McConnell (R-KY), Senate Minority Leader Charles Schumer (D-NY), House Speaker Paul Ryan (R-WI), and House Minority Leader Nancy Pelosi (D-CA) sharing “great concern” about the Centers for Medicare & Medicaid Services’ (CMS) proposal to adjust Medicare Part B drug payment as proposed in the International Pricing Index (IPI) model.

The Coalition collected signatures from 339 patient and provider groups opposing the implementation of the IPI model, which they characterize as “an unprecedented, mandatory experiment affecting Medicare beneficiaries who take Part B-covered drugs” that “would import foreign-based price controls, regardless of value or innovation.”

The letter outlined the following concerns with the proposed IPI model demonstration:

  • Interjects new middlemen between physicians and patients
  • Reduces incentives for medical advancement in the long term
  • Reduces provider reimbursement for physician-administered medicines based on foreign “reference” prices
  • Sets a precedent for CMS to apply foreign price controls to other healthcare providers and services
  • Focuses solely on short-term cost reductions, emphasizing only medication costs, with little—if any—meaningful analysis of overall health costs, the impact of medications on use of higher-cost services, or quality measures
  • Eliminates patients’ ability to choose a provider not subject to the model
  • Overlaps and interferes with existing Center for Medicare and Medicaid Innovation (CMMI) demonstrations, making it difficult to evaluate the benefits of reforms that represent significant investments by CMS and providers

Compared to the Part B Drug Payment Model proposed by the Obama Administration in 2016, public reaction to the proposed IPI model has been muted—likely because of the swirl of the Administration’s other policy proposals and the fact that this is an advance notice of proposed rule-making, not an actual proposed rule. Few politicians have indicated their opposition; neither have many patient advocates and provider societies—until the ASP Coalition letter. There appears to be a wait-and-see approach for this demonstration until a proposed rule to advance the policy is released, potentially in spring 2019.

 
 

Xcenda’s MCN Forum in San Diego: Your Path to Payer Market Insights

 
 

Monday, March 25, 2019  |  San Diego, CA

Looking for payer input to refine your clinical, market access, and/or health economic and outcomes research plans?

Xcenda is hosting a 1-day event in San Diego on March 25, 2019. Gain real-time, truly interactive, qualitative and quantitative insights only from Xcenda’s Managed Care Network (MCN) Forum.

Learn more >

 

 

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LEGISLATIVE UPDATES
 

Help Us Help You: Congress Looking for Ideas to Lower Healthcare Costs

 
 

On Tuesday, Senate Health Committee Chairman Lamar Alexander (R-TN) sent a letter to healthcare experts and stakeholders requesting innovative ideas to help reduce costs for patients and employers. The call for assistance came after the Senate Health Committee concluded a series of 5 hearings on the issue and heard testimony that 30% to up to 50% of healthcare costs are unnecessary.

Alexander argued that, since 2000, instead of focusing on changes that would result in lower healthcare costs and ways to eliminate barriers to innovation and price transparency, discussion among legislators and stakeholders has been about how to make changes to health insurance rather than lowering the cost of healthcare. In a statement, he noted, “The five hearings we held reminded us of something else we should agree on: one major reason for the unnecessarily high cost of healthcare is that the healthcare system does not operate with the discipline and cost-saving benefits of a real market. Too many barriers to innovation drive up costs. And most Americans have no idea of the true price of the healthcare services they buy—which also drives up costs.”

Alexander requested ideas describing specific ways the federal government could help lower the cost of healthcare. He requested written comments with any possible legislative, regulatory, or sub-regulatory solutions by March 1, 2019.

With the Administration proposing policies left and right with their ideas of how best to lower drug prices and out-of-pocket costs for Medicare beneficiaries (eg, step therapy for Part B drugs in Medicare Advantage, the proposed IPI, etc), Alexander’s request provides other stakeholders—economists, doctors, nurses, patients, hospital administrators, state regulators and legislators, governors, employers, and insurers—an opportunity to submit their ideas to shape healthcare policy discussions.

 

Legislative Bytes

 
 
  • Senators Richard Blumenthal (D-CT), Kamala Harris (D-CA), Jeff Merkley (D-OR), and Amy Klobuchar (D-MN) introduced the CURE High Drug Prices Act that would give the Department of Health and Human Services (HHS) the power to force a biopharmaceutical company to lower the price of a product if the department believes the hikes were excessive. Regulators could also force companies to pay a civil penalty up to 3 times the excessive amount the drug manufacturer received as a result of the price increases and could require that consumers and payers be reimbursed for the excessive amount.
  • The House of Representatives passed the Improving Medicaid Programs and Opportunities for Eligible Beneficiaries (IMPROVE) Act (H.R. 7217) that includes the following Medicaid bills:
    • Advancing Care for Exceptional (ACE) Kids Act (H.R. 3325), to improve the delivery of care for children with complex medical conditions who receive care under Medicaid by providing enhanced federal matching for a limited period of time for care coordination services
    • Ensuring Medicaid Provides Opportunities for Widespread Equity, Resources (EMPOWER) and Care Act (H.R. 5306), to extend the Money Follows the Person Demonstration (MFP) program in Medicaid for an additional 3 months. The MFP program provides resources to state Medicaid programs to help transition individuals with chronic conditions and disabilities from institutions back into local communities.

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REGULATORY UPDATES
 

FDA Pours Some Sugar on Insulin

 
 

On Tuesday, Food and Drug Administration (FDA) Commissioner Scott Gottlieb announced the release of new guidance advancing the agency’s biosimilars policy framework. The FDA plans to expand the definition of what is considered a biologic product and remove barriers to biosimilar development in connection with Risk Evaluation and Mitigation Strategy (REMS) programs.

Tuesday’s guidance would allow for insulin, human growth hormone, and other selected drugs to be reclassified as biologics under section 351 of the Public Health Service Act (PHSA), thus making them subject to competition through the biosimilars pathway. Gottlieb stated there are no approved insulin products that can be substituted at the pharmacy level, partly because it is hard to bring a substitutable generic insulin to the market under the conventional drug pathway.

Gottlieb called this a “watershed moment” since there is no approved generic insulin, and branded insulin will be ineligible for the customary 12-year period of reference product exclusivity. Gottlieb said the agency is shaping the guidance to prevent brand sponsors from being able to “game the exclusivity provisions” or obtain any unwarranted additional exclusivities.

Addressing the necessity of reference product samples being available for biosimilar development, Gottlieb cited new guidance over concerns that some manufacturers may be using the REMS program to withhold access for biosimilar sponsors. When requested, the FDA will review biosimilar applicants’ study protocols for comparable safety protections and issue a statement to the reference manufacturer “that comparable protections exist, and that the FDA won’t consider it to be a violation of the branded drug company’s REMS to provide the biosimilar sponsor with a sufficient quantity of the reference product to perform testing necessary to support its biosimilar application.”

In July, the FDA released its Biosimilars Action Plan (BAP). At that time, Gottlieb noted how current regulations favored a lack of competition in biosimilars, with only 3 of the 11 approved biosimilars on the market. In Tuesday’s guidance, he reiterated the FDA’s commitment to bringing biosimilars to market. The new guidances should facilitate competition among insulin products, thus driving down prices for that critical medicine.

 

Look Ma, Lower Rx Growth: National Spending on Healthcare Report

 
 

Per a recently released CMS report, national spending on healthcare slowed for a second consecutive year in 2017, to $3.5 trillion—a growth rate of 3.9%, following 4.8% growth in 2016 and 5.8% in 2015. The rate of growth has been dropping by nearly a whole percentage point each year as of 2015.

Notable findings from the analysis show:

  • The growth rate in private health insurance dropped by 2 percentage points from 6% in 2016 to 4% in 2017.
  • Medicaid and the Children’s Health Insurance Program (CHIP) also saw an overall reduction in their respective rates of growth in 2017. Federal spending on Medicaid decelerated by nearly 4% while state and local Medicaid expenditures accelerated by nearly 3% in 2017. Federal spending on CHIP decreased by roughly 30% while state and local spending increased by nearly 62% in 2017.
  • Out-of-pocket expenditures also slowed by nearly 2% from 4.5% growth in 2016 to 2.6% in 2017.
  • The overall growth rate for the Department of Defense and the Department of Veterans Affairs increased by roughly 4% and 3%, respectively.
  • Hospital care accounts for 33% of overall health expenditures. While overall growth in hospital spending decelerated by 1%, the rate for out-of-pocket hospital expenditures increased by 2.75% whereas insurance spending decreased by 1.7%.
  • The growth rate for physician and clinical expenditures dropped by 1.4%, though it still accounted for 20% of overall health spending. Similarly, out-of-pocket spending on physician care also dropped 2.5%.
  • Growth in spending for retail prescription drugs went up just 0.4%—the lowest increase since 2012. Prescription drugs account for 10% of healthcare expenditures. The overall growth for prescription drugs decreased by nearly 2%, represented by similar rate reductions in out of pocket (−2.5%), private health insurance (−4.3%), and Medicaid (−2%). Conversely, the Department of Defense experienced an accelerated growth rate of 24% in 2017.

Despite what the report attributed as fewer people obtaining care as a result of the suspension of the Affordable Care Act’s (ACA) health insurance fee and slower growth in medical benefits, private health insurance spending still accounted for 34% of total national health expenditures, or $3.5 trillion in 2017 ($10,739 per person). Medicare accounted for 20% (roughly $706 billion) of overall health spending, followed closely by Medicaid, which made up 17% (roughly $582 billion). Out-of-pocket spending by the uninsured population accounted for 10% of national health expenditures (roughly $365 billion). Overall, healthcare spending accounted for roughly 18% of the national gross domestic product.

 

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:

  • The HHS Office of Inspector General submitted its semi-annual report to Congress.
  • CMS posted the minutes and transcript from the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) meeting on chimeric antigen receptor (CAR) T-cell therapy and patient-reported outcomes from August.
  • The Coalition for Affordable Prescription Drugs released a framework for evaluating proposals that address drug pricing.
  • A Kaiser Family Foundation (KFF) report found 4.2 million currently uninsured individuals could purchase bronze-level ACA exchange plans for 2019 and pay nothing in premiums after tax credits.
  • A different KFF analysis found the uninsured rate increased from 10% to 10.2% in 2017.
  • Kaiser Health News discusses how much money patients are told they must have available before receiving an organ transplant. The article explains that nearly all the nation’s transplant centers require patients to show how they can cover their costs, which can total $400,000 for a kidney transplant or $1.3 million for a heart, in addition to $30,000 a year for anti-rejection drugs. “You get what I call a ‘wallet biopsy,’” said Arthur Caplan, a bioethicist at New York University Langone Medical Center.


 
OPEN ENROLLMENT BY THE NUMBERS

It’s that time again...open enrollment for the insurance exchanges. As we have done each year, we will compare weekly enrollment in the current and previous years for the 39 exchanges that use the HealthCare.gov platform for the 2019 benefit year, including the federally facilitated exchanges, state partnership exchanges, and some state-based exchanges.

 
Comparison of 2018 and 2019 Weekly Cumulative Open Enrollment Snapshots for HealthCare.gov

 

 

 


 
 
 
HEARD ON THE STREET
 

“Traditional Medicare cannot be left behind….

“[CMS] has got to be straight with the seniors about all of their healthcare options, with the federal government not favoring one type of Medicare over another….

“The Centers for Medicare & Medicaid Services cannot become an advertising arm of private insurance, or any other type of Medicare, because the role is to make sure that seniors get straight talk about all of their options.”

– Sen. Ron Wyden (D-OR), expressing concern that the Administration’s online enrollment tools and emails to beneficiaries were promoting Medicare Advantage plans over fee-for-service Medicare

Source: “Bipartisan Leadership in Health Care: CHRONIC Care Act of 2018,” Bipartisan Policy Center, December 6

 

 
POLICY BY NUMBERS
 

15

 

The number of disease areas investment bank Leerink believes will become dangerously overcrowded over the next 5 years, putting a dozen companies at risk

Source: “Warning, investors: Way too many drugs will be vying for market share in 15 diseases,” FiercePharma, December 13

 
 

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 AUTHORS:

Jenna Kappel | Irene Sheynis | Scott Shields | Stephen Wilson

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Tia O’Brien

 

Dec. 14, 2018

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