The Senate Finance Committee hears testimony from PBMs on drug pricing and their value to healthcare.

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Apr. 12, 2019


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And PBMs Make 3: Senate Hearings on Drug Pricing


The third Senate Finance Committee hearing on drug pricing, this one with pharmacy benefit managers (PBMs) testifying, provided about as much transparency into the drug-supply process as is expected to come from the redacted Mueller report. Executives from the 5 leading PBMs, including Cigna; CVS Health and CVS Caremark; UnitedHealth Group, which owns OptumRx; Prime Therapeutics; and Humana testified about the value they bring to the healthcare system, noting the importance of patient access to choices of treatments and programs they have instituted to promote adherence and improve outcomes.

The panel members did acknowledge that high drug costs benefit PBMs in Medicare Part D, because the faster the beneficiary can move into the catastrophic phase, the less PBMs have to pay and the more that Medicare is required to pay.

  • PBM executives noted that the Administration’s proposed model to make changes to the safe harbors for rebates allowing patients to receive discounts at the point of sale would result in many beneficiaries paying higher premiums.
  • PBMs responded to panel members’ concerns regarding consolidation in the industry by pointing out there are 60 PBMs across the country—even though the 3 largest PBMs comprise 85% of the market. PBM executives then deflected to the manufacturers, saying that there is not enough competition and more biosimilars need to come to market. They also noted that a shorter period of exclusivity would help spur biosimilars onto the marketplace.
  • There was at least one area of alignment between pharmaceuticals and PBMs. When asked about arbitration that would allow for the negotiation of sole-source drugs, PBM executives said that they would prefer to exhaust all other efforts first, including increased competition with biosimilars.
  • PBM executives also got an earful about drug shortages for patients with serious health issues. After some deafening silence, a PBM executive said the biggest challenge is single-source manufacturers … and figuring out how to deal with that issue during shortages.

Congress won’t ease up on PBMs—or drug pricing—anytime soon, with the panel asking for their specific ideas in writing about what role they can play in improving the system. However, with such a complex system, potential changes may lead to unintended consequences.


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We’re Gonna Need a Bigger Piggy Bank: Sanders Re-Introduces “Medicare for All”


On Wednesday, Democratic presidential candidate Sen. Bernie Sanders (S-VT) released his healthcare reform plan, “Medicare for All.” The new version of his January 2016 proposal builds on the same principles of its previous iteration; ie, achieving universal coverage and guaranteeing every American access to healthcare as a right.

The plan proposes replacing the current system of multiple public and private insurers with a single, government-run plan for all. Under Medicare for All, everyone would be guaranteed generous health benefits, including hospital care, preventive services, prescription drug coverage, and long-term care—all with no out-of-pocket costs or premiums. Private plans would be prohibited from competing with Medicare and only allowed to cover a small portion of elective services.  

Although Sanders’ plan is backed by some prominent Democrats and 63 national organizations and unions, critics of the plan highlight the high cost to implement a single-payer system, the impact to the federal deficit, and destabilization of coverage for millions of Americans. Some studies have suggested implementing a single-payer system could increase government spending on healthcare by more than $25 trillion over a decade.

The plan does not include specifics on how the expanded coverage would be funded; however, in a separate document, Sanders proposed covering the plan’s costs with new progressive taxes on workers and employers, raising taxes on the wealthy, and imposing a fee on large financial institutions. He argues that although citizens could pay more in taxes, patients would ultimately save on out-of-pocket costs, and overall federal spending would be offset with significant savings in reduced administrative costs.  

There will likely be more plans introduced by other presidential candidates and the current administration; healthcare reform will no doubt continue to be a key issue in the upcoming 2020 presidential election.


States Get in on the Action: NY Looks to Change PBM Pricing Model


In November 2018, the New York City Pharmacists Society (NYCPS) and the Pharmacists Society of the State of New York (PSSNY) launched a campaign called FixRx to improve the quality of healthcare provided by pharmacists and to address the issue of spread pricing in the payment of prescription drugs.

According to a survey of 532 pharmacies conducted by the NYCPS in early January, 99% are concerned that PBM practices will jeopardize their business in 2019, 70% had already reduced store hours or laid off employees in 2018 because of PBMs, and 92% were considering making cuts this year.

Recently, New York legislators took steps to respond to issues raised by FixRx and community pharmacists by amending the state’s public health law and adding a new subdivision to its 2020 budget. The new statute states that the social services law shall include provisions ensuring payment to the PBM for services is limited to the actual ingredient costs, a dispensing fee, and an administrative fee for each claim processed. Furthermore, the Department of Health may establish a maximum administrative fee. The new law also prohibits PBMs from collecting the rebates and discounts for their own profit.

The elimination of the current PBM pricing model is projected to save New York taxpayers at least $43 million; savings could be potentially higher based on a study released in January by the PSSNY.

PBMs have received a fair bit of criticism recently, including by House Representatives this week. New York’s actions towards PBMs may foreshadow how other states and the federal government will restructure the payment continuum for prescription drugs.


Legislative Bytes

  • House Ways and Means Committee marked up the Prescription Drug Sunshine, Transparency, Accountability and Reporting (STAR) Act of 2019 (HR 2113)
  • Sen. Sheldon Whitehouse (D-RI) and Rep. Janice Schakowsky (D-IL) introduced S 1033 and HR 2085, bills to establish a public health insurance option. See the press release for more information.
  • Sen. Ted Cruz (R-TX) and Rep. Palmer (R-AL) introduced S 1030 and HR 2108, bills to allow individuals to opt out of Medicare Part A.
  • House Ways and Means Health Subcommittee Chairman Lloyd Doggett (D-TX) introduced HR 2087, a bill to require certain manufacturers to report drug pricing information under the Medicare program.
  • Congressman Jim Jordan (R-OH), Ranking Member of the Committee on Oversight and Reform, and Congressman Mark Meadows (R-NC), Ranking Member of the Government Operations Subcommittee, sent letters to 12 pharmaceutical companies raising questions about the “sweeping” drug-price investigation conducted by House Committee on Oversight and Reform Chairman Elijah Cummings (D-MD).
  • Senator Bill Cassidy (R-LA) introduced a package of 3 bills focused on reducing drug prices by getting generics to market faster:
  • Rep. Mark Meadows (R-NC) introduced HR 2209 that would establish the position of Chief Pharmaceutical Negotiator in the Office of the US Trade Representative, who would be responsible for conducting trade negotiations and enforcing trade agreements related to acts, policies, and practices of foreign governments that fail to appropriately reward United States innovation with respect to pharmaceuticals.

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ICER Focusing on Diabetes Treatments and Peanut Allergies


Yesterday, the Institute for Clinical and Economic Review (ICER) announced plans to assess the comparative clinical effectiveness and value of treatments for type 2 diabetes mellitus. The report will likely compare oral semaglutide, a GLP-1 agonist, to 3 products currently on the market: VICTOZA (liraglutide), another GLP-1 agonist; JARDIANCE (empagliflozin), an SGLT-2 inhibitor; and JANUVIA (sitagliptin), a DPP-4 inhibitor. As part of this review, ICER also may compare oral semaglutide to the sulfonylurea class of drugs as a whole. Oral semaglutide is currently under Food and Drug Administration (FDA) review with an anticipated decision in the second half of 2019. (An injectable form of semaglutide is already approved by the FDA, marketed as OZEMPIC.)

Any interested stakeholders may submit comments and key information relevant to the development of the Evidence Report during the Open Input period. All input can be emailed to and must be received by 5 PM ET on April 29, 2019 to be considered.

ICER also released the Draft Evidence Report for their evaluation of treatments for peanut allergy this week. ICER is assessing the clinical effectiveness and value of 2 new technologies that are expected to be approved by the FDA next year to induce immune tolerance, VIASKIN Peanut (DBV Technologies) and AR101 (Aimmune Therapeutics), in addition to a non-commercialized oral immunotherapy. This Draft Evidence Report and Draft Voting Questions will be open for public comment until 5 PM ET on May 8, 2019. The revised Evidence Report and Voting Questions will be posted on May 28, 2019.

As always, if you need assistance with all things ICER or value-related, please contact


The Medicine Maker: Cell and Gene Pricing: How Can Manufacturers Get it Right?


Manufacturers are becoming increasingly more open to alternative payment and reimbursement models for cell and gene therapies.

Xcenda's Ana Stojanovska, Vice President of Commercial Consulting, discusses her approach and experience when working with manufacturers and their payment models in The Medicine Maker.

Read the article >




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Like Skiing on a Bunny Slope When You’re (Almost) Ready for the Black Diamond:
Part D Final Rule


Late last week, the Centers for Medicare & Medicaid Services (CMS) released a final rule covering technical program updates for Medicare Advantage (MA) (Part C) and the Medicare prescription drug benefit (Part D) programs for contract years 2020 and 2021, following the proposed rule from late 2018. Despite the momentary panic felt by your editors in seeing the words “final rule” and “Part D,” this was not the more controversial Part D rule that could change protected classes.

Based on the press release, CMS expects that patients will have access to increased plan flexibility and plan choices, with new benefits, starting in plan year 2020. Beneficiaries now have the option of increased supplemental services (eg, telehealth) and for those who are unsatisfied with their current healthcare, the rule provides a more streamlined grievance and appeals process. Additionally, the agency has tried to improve the integration for MA Dual-Eligible Special Needs Plans.

CMS also adjusted how plans are rated to help better inform beneficiaries. Specifically, adjustments are planned for the Star Ratings methodology policies, to improve stability and predictability, and also to account for extreme and uncontrollable circumstances (eg, hurricanes). There will also be clarification around the process by which prescribers or providers are added to a “preclusion list”; CMS prohibits payment for all Part D drugs and MA items or services that are prescribed or furnished by those on the list, so gaining clarity around the process would be helpful.

This may be representative of a shift in the agency’s thinking. Given recent rulings and comments from Administrator Seema Verma, it appears that CMS is placing increasing importance on preventive care.

Those interested in learning more about the final rule can refer to the press release and fact sheet.

Compared to the recent proposed rule on rebate reform and the pending rules on Requiring Drug Pricing Transparency, Benefit and Payment Parameters for 2020, and Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses, this rule was relatively devoid of policies affecting drug coverage and payment. We were happy not having to devote a lot of time and mental horsepower on this one as we gear up for a busy spring.


Tough to Replace a Legend (the Hair! the Socks!): Sharpless to Head FDA


Last Friday, the Department of Health and Human Services (HHS) Secretary Alex Azar appointed Norman (Ned) Sharpless, MD, to replace the outgoing FDA Commissioner Scott Gottlieb, who resigned in March.
Unlike his peers with backgrounds in policy and industry (Gottlieb was at, and has returned to, the American Enterprise Institute, while Azar was president of Eli Lilly), Sharpless is decidedly more academic. Working as a career scientist, with 170 publications on aging and cancer, Sharpless leaves his position as director of the National Cancer Institute, which he held since 2017. Before that, he was the director of the University of North Carolina (UNC) Lineberger Comprehensive Cancer Center since 2014.

However, Sharpless is not entirely unfamiliar with innovation in industry. He co-founded 2 clinical-stage biopharmaceutical companies: G1 Therapeutics focuses on novel cancer therapies and Sapere Bio uses senescence biomarkers to predict adverse health outcomes.

“Dr. Sharpless’ deep scientific background and expertise will make him a strong leader for FDA,” Azar said in a statement.

At this time, policy positions from the new commissioner are difficult to predict. Sharpless will likely continue Gottlieb's policies towards increasing competition in the marketplace, streamlining new product reviews, combating the opioid epidemic, and preventing youth access to e-cigarettes. It remains to be seen whether we can develop a policy crush on Sharpless; Gottlieb’s hold was (is?) pretty strong.


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:


“Pharmacy benefit managers guard their operations with greater secrecy than HBO is guarding the ending of Game of Thrones.”

– Sen. Ron Wyden (D-OR), Ranking Member, Senate Finance Committee

Source: “Wyden Statement at Finance Committee Hearing on Drug Prices and Pharmacy Benefit Managers,” Full Committee Hearing: Drug Pricing in America: A Prescription for Change, Part III, April 9



$99 per month


Sanofi has unveiled a program that will supply insulin products for $99 per month. The Insulins Valyou Savings Program, launched in a smaller form last year, will deliver its insulin products for $99 per month. At that fixed price, Sanofi will offer up to 10 boxes of insulin pens and 10 mL vials per month regardless of a patient's income. The program is not valid under state or federal healthcare programs.

Source: “Insulins Valyou Savings Program,” April 10


2019 Asembia Specialty Pharmacy Summit

April 29–May 2 | Las Vegas, NV
Join Platinum sponsor AmerisourceBergen at this year’s Asembia Specialty Pharmacy Summit at the Wynn & Encore Las Vegas. Each year, the Summit welcomes thousands of senior executives, key decision makers, and other industry professionals to the nation’s largest annual gathering for specialty pharmacy. Visit the AmerisourceBergen associates at booth #311. 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



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


Anuja Kanaskar | Isabell Kang | Jenna Kappel | Reeya Patel | Scott Shields | Tammy Washington | Stephen Wilson


Kylie Matthews | Ellen Olson


Apr. 12, 2019


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