Seven pharmaceutical chief executives address drug pricing at Senate Finance Committee hearing.

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Mar. 1, 2019

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FEATURED STORY
 

Only the Second Most Interesting Hearing This Week: Rx Pricing

 
 

On Tuesday, the Senate Finance Committee held part 2 of the prescription drug pricing hearing that included chief executives from 7 pharmaceutical companies: AbbVie, AstraZeneca, Bristol-Myers Squibb, Janssen of Johnson & Johnson, Merck, Pfizer, and Sanofi.
 
Chairman Chuck Grassley (R-IA) told the executives there is a balance of incentive and innovation with drug costs and what Medicare beneficiaries pay. Before the executives’ testimony, he warned them not to play the “blame game.” Several executives mentioned that pharmaceutical benefit managers (PBMs) do a good job of negotiating and that their net prices decreased significantly even though their revenue increased, while the PBMs and insurers set the formularies. However, Ranking Member Ron Wyden (D-OR) said, “PBMs don’t set list prices; drug makers do.”

The hearing was chock full of takeaways.

  • Senators noted lawsuits related to patents that are delaying the launch of several biosimilars that would increase competition and help reduce costs.
  • Executives criticized the potential International Pricing Index (IPI) model, but Senators criticized them for setting prices lower in other countries while “gouging” US Medicare patients.
  • All executives agreed out-of-pocket costs should be reduced for beneficiaries, urging Congress to create more policies that would limit spending at the point-of-sale. One executive recommended capping Part D out-of-pocket costs.
  • Executives voiced support for the recent proposal to remove the safe harbor for rebates to allow patients to benefit from lower prices at the point-of-sale, and they urged Congress to require transparency for consumers. However, many noted that having a commercial-Medicare bifurcated system would lead to complexities and new issues, so they stressed the importance of creating the same rules in the commercial sector.
  • All executives and, generally, the panel members supported value-based arrangements to pay more for drugs that show positive outcomes and less for those that do not, with executives urging panel members to make payment reforms that would help facilitate these programs, including elimination of Medicaid best price and removal of the anti-kickback statute.

Yesterday, Wyden sent letters to the CEOs calling on them to affirm they will support a federal law mandating lower list price if rebate changes go into effect.

Expect more hearings on the topic with the panel expanding invitation to PBMs and insurers—and possibly other stakeholders in the US healthcare system. As a sign of continued intense interest in this issue, the Senate Aging Committee announced a 2-day hearing on prescription drug prices next week (see Legislative Bytes).

 
 

Executive Q&A With Jennifer Snow on Moving Medicare Coverage

 
 

Shifting coverage for some drugs from Medicare Part B to Medicare Part D is perhaps one of the most talked-about proposals within the Trump Administration’s blueprint for lowering drug costs.

In an executive Q&A, Xcendas Jennifer Snow, Vice President of Reimbursement and Policy Insights and Editor-in-Chief of Health Policy Weekly, provides insights on the impact of shifting coverage from Part B to Part D. She also shares what healthcare stakeholders need to know about the potential impact of this change. Learn more >

 

 

 

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LEGISLATIVE UPDATES
 

Medicare Free for All

 
 

On Wednesday, Rep. Pramila Jayapal (D-WA), Co-Chair of the Congressional Progressive Caucus, released the Medicare for All Act of 2019 with more than 100 Democratic co-sponsors, including frontrunner candidates in the Democratic presidential primary—Sens. Cory Booker (D-NJ), Kamala Harris (D-CA), and Elizabeth Warren (D-MA).

The bill would move every American onto 1 government insurer in 2 years, while providing everyone with medical, vision, dental, and long-term care at no cost.

The bill does not include a cost estimate or revenue-raisers for financing the new system. Jayapal has suggested options include a new tax on high earners or mandated employer contributions. The Mercatus Center developed a cost estimate of Bernie Sanders’ Medicare for All Act of 2017 (S.1804)—the best proxy for Jayapal’s bill—calculating that Sanders’ plan would have added $32.6 trillion to federal budget commitments during the first 10 years of its implementation.

Critics of the plan cite, among other arguments, its crushing new taxes, forcing nearly half the country to switch from their current private plans to a public insurer (echoed by Kevin Brady [R-TX], Ranking Member of the Ways and Means Committee) and believe such a single-payer system would drastically reduce quality of care. The American Hospital Association opposes the single-payer plan based on a number of factors and, instead, supports expanding Medicaid to the remaining states, strengthening marketplaces, and increasing enrollment efforts.

Supporters, including National Nurses United, tout the bill’s comprehensiveness and an end to medical bankruptcies.

The bill cannot succeed in the current Congress—nor would President Donald Trump sign it into law—but single-payer healthcare is gaining traction and will be a major theme during the presidential campaign.

Readers interested in learning more about the bill can read the summary and section-by-section breakdown.

 

Legislative Bytes

 
 
  • Sens. Chuck Grassley and Ron Wyden began a bipartisan investigation into insulin prices and sent letters to 3 manufacturers asking how they set prices for their insulin products.
  • The Senate Aging Committee will hold 2 days of hearings focused on reducing prescription drug prices. On March 6, the committee will hear from a panel of patients. On March 7, the committee will focus on policy solutions to the rising costs of prescription drugs.
  • The House Ways and Means Committee will be competing with the Senate Aging Committee next Thursday (March 7) as they hold their hearing, Promoting Competition to Lower Medicare Drug Prices.
  • Sen. Richard Durbin (D-IL) introduced S.551 that would require manufacturers of certain single-dose vial drugs payable under Medicare Part B to provide rebates with respect to amounts of such drugs discarded.
  • Rep. Lloyd Doggett (D-TX) introduced H.R.1344 that would prohibit brand name drug manufacturers from compensating generic drug companies to delay the entry of a generic drug into the market.
  • Rep. Brian Higgins (D-NY) introduced H.R.1346 that would provide an option for individuals aged 50–64 to buy into Medicare.

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THE VALUE CORNER
 

Sure It’s Awesome, Just Cut the Price 90%

 
 

Last week, the Institute for Clinical and Economic Review (ICER) released the Evidence Report, Revised Voting Questions, and Response to Stakeholder Comments for its assessment of the comparative clinical effectiveness and value of the spinal muscular atrophy (SMA) treatments SPINRAZA (nusinersen) and ZOLGENSMA (onasemnogene abeparvovec) in preparation for the upcoming public meeting of the New England Comparative Effectiveness Public Advisory Council (New England CEPAC) in Boston on March 7.

The report concludes that the evidence provides high certainty of a substantial net health benefit associated with SPINRAZA and ZOLGENSMA compared to prior standard care in patients with infantile-onset (type I) SMA. However, ICER found both treatments far exceed traditionally acceptable cost-effectiveness thresholds. To achieve cost-effectiveness thresholds of $100,000 and $150,000 per quality-adjusted life-year (QALY), ICER’s value-based price benchmark for SPINRAZA is between $72,000 and $130,000 for the first year of treatment and between $36,000 and $65,000 for each successive year. ICER’s value-based price benchmark for ZOLGENSMA is between $310,000 and $900,000 per treatment.

For SPINRAZA, ICER’s price benchmark represents a discount of nearly 90% from the list price. ICER believes that “among the various companies that are now bringing gene therapies to market, Novartis has a real opportunity here to demonstrate both scientific and ethical leadership by setting the launch price of ZOLGENSMA in line with the benefits patients will likely receive.” Whether or not Novartis will follow this recommendation is yet to be determined.

ICER also announced plans to assess the comparative clinical effectiveness and value of VASCEPA (icosapent ethyl) and XARELTO (rivaroxaban) as additive therapies for cardiovascular disease (CVD).

Stakeholders are encouraged to provide recommendations and guidance to ICER during the open input period for the VASCEPA and XARELTO value assessments on or before March 12 at 5:00 PM ET (publiccomments@icer-review.org). For more information about the open input period, visit ICER’s website to access its Manufacturer Engagement Guide, Patient Participation Guide, and Patient Guide to Open Input. More details of ICER’s planned analysis will be provided in a draft scoping document available on March 18. ICER’s website provides timelines of all key posting dates and public comment periods for the assessment of additive CVD therapies.

As always, if you need assistance with all things ICER or value-related, please contact Kristen.Migliaccio@xcenda.com.

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REGULATORY UPDATES
 

Rocky Mountain High: Approval for Medicaid Drug Price Negotiation

 
 

Earlier this week, Colorado became just the third state to receive approval from the Centers for Medicare & Medicaid Services (CMS) to negotiate drug prices for Medicaid, based on performance. This will only be used for fee-for-service components and will be a voluntary program, where Colorado can enter into value-based agreements with manufacturers. Other states that have won approval are Oklahoma and Michigan.

In a follow-up letter applauding CMS’ decision, the Colorado Department of Health Care Policy and Financing stated it had not yet identified specific drugs or manufacturers it plans to approach with value-based contracts. “We want to start by identifying those drugs where the outcomes are more concrete and easier to measure,” said Cathy Traugott, Pharmacy Section Manager for the Department. “We will take what we learn from those situations before moving into drug categories that are more complex.”

Expect other states to follow suit if Colorado, Michigan, and Oklahoma show net savings or improved outcomes from their agreements.

 

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 meeting dates for requesting revisions to the Healthcare Common Procedure Coding System (HCPCS):
    • Drugs/Biologicals/Radiopharmaceuticals/Radiologic Imaging Agents: May 13–15
    • Durable Medical Equipment (DME) and Accessories, Orthotics and Prosthetics (O&P) Supplies, and Other: June 11–12
  • The Kaiser Family Foundation posted an issue brief on claims denials and appeals in Affordable Care Act marketplace plans.
  • One of the largest-ever studies of work-related risks in young adult cancer survivors found that, of 872 survivors, 14.4% borrowed more than $10,000, and 1.5% said they or their family had filed for bankruptcy as a direct result of illness or treatment. Additionally, 58% of respondents said that cancer or treatment interfered with physical demands of their job, and 54% said that cancer or treatment interfered with their ability to perform mental tasks related to their job.


 
HEARD ON THE STREET
 

“I use ‘Car Talk’ clips when I teach first-year medical students. I tell them to be on the lookout for the key parts in the problem-solving process…. I would listen to their podcast every weekend. One day I said to myself, ‘My goodness, these guys are doing the same job I have.’ They collect the data, define the problem, and pick from several solutions. That’s essentially what a doctor does.”

– Dr. Gurpreet Dhaliwal, Professor of Medicine at the University of California, San Francisco, and a physician at the San Francisco VA Medical Center, explaining how he uses the show to teach clinical reasoning—the process doctors use to make a diagnosis. He even published an essay about his approach in JAMA in 2011.

Source: “‘Does Your Knee Make More of a Click or a Clack?’—Teaching ‘Car Talk’ to New Docs,” NPR, February 27

 

 
POLICY BY NUMBERS
 

19% | 0.5% | 14%

 

Issuers offering individual market coverage on Healthcare.gov denied approximately 1 in 5 (19%) in-network claims in 2017. Healthcare.gov consumers appealed less than half of 1% of denied claims, and issuers overturned 14% of appealed denials.

Source: “Claims Denials and Appeals in ACA Marketplace Plans,” Kaiser Family Foundation, February 25

 
UPCOMING MEETINGS & CONFERENCES
 

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

 

AMCP Managed Care & Specialty Pharmacy Annual Meeting

March 25–28 | San Diego, CA
Join AmerisourceBergen companies, US Bioservices and Xcenda, at AMCP’s Annual Meeting at the San Diego Convention Center, March 25–28. Meet with our specialty pharmacy, commercialization, and market access experts at the largest gathering of managed care professionals who work, lead, and innovate in the ever-changing world of pharmaceutical management. Visit AmerisourceBergen at booth 818. 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 AUTHORS:

Anuja Kanaskar | Isabell Kang | Jenna Kappel | Scott Shields

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

Mar. 1, 2019

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