We recap the SOTU items focused on healthcare.

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Feb. 8, 2019


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The 5 Minutes of the SOTU That We REALLY Paid Attention to


In Tuesday’s State of the Union address, President Trump: 1) re-affirmed his Administration’s commitment to rein in drug prices; 2) expressed a surprising policy reversal for HIV/AIDS treatment and prevention programs; and 3) promised to increase funding for pediatric cancer research.

The President asked Congress to “pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency.” As reported in our October 26, 2018 issue of Health Policy Weekly, the International Pricing Index (IPI) model would reset approximately 50% of Part B drug payments from average sales price (ASP) to a Target Price derived from the IPI. The continuing push for price disclosure was also mentioned: “We should also require drug companies, insurance companies, and hospitals to disclose real prices to foster competition and bring costs way down.”

Following last year’s appointment of a leading AIDS researcher, Robert Redfield, to Director of the Centers for Disease Control and Prevention, the Administration appears to have changed course regarding the HIV epidemic. Last January, Trump dismissed the entire Presidential Advisory Council on HIV/AIDS. In Tuesday’s address, he asked Congress for funding to eliminate the epidemic within 10 years. On the same day, Health and Human Services Secretary Alex Azar released details of the new initiative. By directing substantial funding to geographic hotspots, the President’s proposal would increase antiretroviral access, focus on tracking the spread of HIV, and promote prevention efforts through local task forces.

Then, noting how some childhood cancers have had no new treatments in decades, the President made a new funding request: “My budget will ask Congress for $500 million over the next 10 years to fund this critical lifesaving research.”

Both parties have expressed support for efforts to lower drug prices, evidenced in the recent announcements by the House and Senate to begin holding hearing on industry pricing practices. However, if and how the Administration and Congress might work together to implement pricing reform remains unclear. Strong stakeholder resistance to the IPI model is expected, especially from providers, and legal challenges are likely to slow down, if not completely derail, any serious transparency initiatives.


CBI Patient Assistance & Access Programs Conference 2019


Xcenda is a proud Platinum Sponsor of the 20th Annual Patient Assistance & Access Programs Conference coming March 4–6 to Baltimore, MD.

Xcenda’s Corey Ford, MHA, Director, Reimbursement and Policy Insights, will be moderating a panel focused on understanding the stakeholder view on the impact of copay accumulators on access and adherence. Panelists will include leaders from pharmaceutical manufacturers, patient advocacy groups, and patient services programs. Learn more >

Join us in Baltimore and save $300! Use promo code PBC877. Register here.



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Be There or Be Square: Pharma CEOs “Invited” to Drug Pricing Hearing


On Monday, the Senate Finance Committee announced its second drug pricing hearing of 2019 will be held February 26. Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) invited attendance from the executives of 7 major drug manufacturers: AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck & Co., Pfizer, and Sanofi.

At a hearing last week, both Grassley and Wyden expressed disappointment that pharmaceutical company executives had declined their invitations to testify. Grassley said he would be “more insistent” that executives show up at a subsequent hearing. The CEOs of all companies have agreed to appear at this hearing.

Drug pricing is going to be a major campaign issue for 2020, and the politicians of both parties are jostling for position in the public’s standpoint.


Legislative Bytes

  • The House Ways & Means Committee announced a February 12 hearing on the cost of rising prescription drug prices.
  • Republican House Energy and Commerce Committee leaders sent a letter to Chairman Frank Pallone, Jr. (D-NJ) and Subcommittee on Health Chairwoman Anna Eshoo (D-CA) requesting a hearing to review the Democratic “Medicare for All” proposal.
  • Senate Health, Education, Labor, and Pensions (HELP) Committee Democrats sent letters to Eli Lilly, Novo Nordisk, and Sanofi requesting information on recent price increases on insulin.

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Meet Cliff. He Minds the Gap


Late last week, the Centers for Medicare & Medicaid Services (CMS) released the 2020 Advance Notice and Draft Call Letter, which outlines proposed changes to the 2020 Medicare Advantage (MA) and Part D programs for the upcoming plan year. The Advance Notice and Call Letter serves as an annual blueprint for MA and Part D plans in terms of operations and potential policy adjustments to the program.

Feedback is due by end of day on March 1; the Final Notice and Call Letter will be available on April 1, 2019.

MA payments are expected to have an effective growth rate of 4.59% on average for 2020, which translates to a revenue increase of about 1.59%. On the Medicare prescription drug benefit side (Part D), CMS is emphasizing approaches to address overuse of opioids, building on efforts by the agency to address the issue. The agency is also proposing largely technical—and previously announced—changes to the Star Ratings program. The benefit parameters are making the usual minor adjustments, and the specialty tier is staying at $670 per month.
One thing new in the Call Letter is that we finally know what the “OOP cliff” will be for 2020. The out-of-pocket (OOP) threshold will increase by $1,250 from 2019 to 2020—an amount so large that it is known as the “OOP cliff.” The OOP threshold is the amount that a beneficiary must spend OOP before they enter catastrophic coverage; it includes the 70% manufacturer contribution for brand-name products during the coverage gap. The OOP cliff is caused by a little-noticed provision in the Affordable Care Act (ACA), where the growth rate of the OOP threshold was slowed from 2014 through 2019. Normally, the OOP threshold would grow just like the deductible and the initial coverage limit at the rate of beneficiary per-capita spending. But under the ACA, the OOP threshold grew in 2014 and 2015 at the rate of per-capita beneficiary spending less 0.25%, and then it grew at the Consumer Price Index + 2% in 2016, 2017, 2018, and 2019. In 2020, the OOP threshold resets as if its growth had never slowed down in the first place, thus causing the cliff. Any change to moderate the OOP cliff would require action by Congress.

Below are the proposed 2020 Part D benefit parameters, compared to 2019.

Given all the proposals currently floating around, the Call Letter is hardly the mouse that roared, but it is a reminder of ongoing tweaks to the program and how they might fit into an evolving policy landscape.


Tell Us How You Really Feel: Provider Survey on PA


In the presentation of its 2018 Prior Authorization (PA) Physician Survey, the American Medical Association (AMA) reports that 91% of respondents felt PA has a significant/somewhat negative impact on patient clinical outcomes. The AMA does not distinguish between “significant” and “somewhat” in its current presentation, but in its 2017 study presentation, which had similar results, 61% of providers indicated PA had a “significantly” negative impact and 31% indicated PA had a “somewhat” negative impact.

Most physicians (65%) reported waiting at least 24 hours, on average, to receive a PA decision, and almost half (45%) indicated a wait time of 2 or more days. Related delays in patient access occurred at nearly all practices (91%) with almost half (47%) of all practices experiencing delays often/always. Further, over one-fourth (28%) of physicians indicated the PA process had been responsible for a serious adverse event such as death, hospitalization, disability/permanent body damage, or other life-threatening event.

The PA process also impacts practice operations. A large majority (86%) indicated PA creates a high/extremely high burden for them. One-third of practices employ at least 1 staff member to work exclusively on PAs, and estimates are that, on average, almost 2 days (14.9 hours) are spent on processing 31 PAs per week.

Despite serious problems with PA, there is no movement toward eliminating the process. Payers view PA as an important tool in preventing unnecessary care, and demonstration programs conducted for CMS indicated a 5-year savings of $1.1 billion to $1.9 billion for Medicaid on these projects. Instead of pushing against PA, the AMA appears to acknowledge its value and is currently working with payers to develop a “best practices” approach to PA.


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:

  • We might be going through withdrawal…2 weeks and no ICER updates.
  • The Association of Community Cancer Centers (ACCC) has released a report, Immuno-Oncology: Connecting Science, Policy, and Real-World Care Delivery, that includes a summary of the year’s most significant immunotherapy research and clinical developments, as well as expert perspectives on management of immune-related adverse events, patient education, and coordination of care with specialists (such as dermatologists, endocrinologists, pulmonologists, and radiologists) who may see patients treated with immunotherapies for cancer.
  • The National Academy for State Health Policy (NASHP) announced a March 7 webinar on leveraging state purchasing power to lower healthcare spending.
  • Switzerland’s universal healthcare system, which relies on private insurance companies, provides a potentially useful template for overhauling this country’s system, argues National Review’s Kevin Williamson.
  • A Kaiser Family Foundation analysis draws on data from Medicare’s Plan Finder website to calculate expected annual 2019 OOP costs for 30 specialty-tier drugs used to treat 4 health conditions—cancer, hepatitis C, multiple sclerosis, and rheumatoid arthritis.


We beg to differ (we’d be happy to explain it), but…

“Even health policy wonks are largely in the dark about where these rebates go—we may know the structure of the system, but we still don’t know what happens to the rebates on any drugs we take.”

– HHS Secretary Alex Azar, “Remarks to the AcademyHealth Conference,” February 5



77% | 92% | 70% | 66%


A PhRMA-commissioned survey sought to explore the expected effects the International Pricing Index (IPI) model that was introduced last October. The results:

  • 77% of companies said if the IPI proposal proceeds, it will affect their ability to pursue current or future R&D projects.
  • 92% of companies saw a risk of reducing investments in all Part B medicines, many of which are used to treat multiple sclerosis, rheumatoid arthritis, cancer, and genetic disorders.
  • 70% of companies expected significant cuts in cancer R&D.
  • 66% of companies expressed concerns about near-term job cuts, the eventual closure of facilities, or the abandonment of expansion plans.

Source: “In survey, PhRMA member companies highlight impact of IPI on R&DIn survey, PhRMA member companies highlight impact of IPI on R&D,” The Catalyst, February 5


CBI PAP 2019: 20th Annual Patient Assistance & Access Programs

March 4–6 | Baltimore, MD
Join Xcenda and Lash Group at the upcoming CBI PAP 2019 Conference in Baltimore, MD March 4–6. Xcenda’s Vice President of Reimbursement and Policy Insights and Editor-in-Chief of Health Policy Weekly, Jennifer Snow, MPH, will deliver the state of the industry address titled, “The Evolving Healthcare Landscape and the Impacts on Patient Access and Affordability.” Lash Group President Tommy Bramley, PhD, will deliver the conference’s keynote on “Empathy and Expertise—Evolving Patient Support Programs in the Digital Age.” 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
Vice President,
Reimbursement and
Policy Insights,

Scott Shields
Associate Director,
Health Policy



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


Stew Kaufman | Scott Shields | Stephen Wilson


Laurie Kozbelt | Ellen Olson | Tia O’Brien


Feb. 8, 2019


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