CMS released the final rule on DTC television advertisements to include list prices for prescription drugs and biologics.

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May 10, 2019


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FDA Releases Final Document Aimed at Increasing Biosimilars Development


This morning, the US Food and Drug Administration (FDA) released a long-awaited final document, Considerations in Demonstrating Interchangeability With a Reference Product Guidance for Industry, with the goal to help increase the development of biosimilars. Changes from the draft guidance include:

  • Manufacturers can get a pass from the FDA if they provide justification for why they believe “switching studies” is not necessary
  • In some instances, the FDA may allow a non-US reference biologic to be used in switching studies
  • Switching studies will not be required for biosimilars that are intended only to be administered once to a patient

More to come next week!


Mama Said Knock You (Out) Toward Increased Transparency


On Wednesday, the Centers for Medicare & Medicaid Services (CMS) released the final rule to require direct-to-consumer (DTC) television advertisements of prescription drugs and biologics to include their wholesale acquisition cost (WAC), or list price. It is applicable to products for which payment is available through or under Medicare or Medicaid, which includes virtually all prescribed drugs and biologics.

Under the rule, manufacturers must list a product’s monthly wholesale price, if greater than $35 for 30 days. The information should appear in text large enough for most people to read and include a statement that patients with health insurance may pay a different amount. Manufacturers are permitted to include list prices of competitor products.

The final rule states that the Department of Health and Human Services (HHS) will publicize companies that create false or misleading ads. However, HHS believes the primary enforcement mechanism will be the threat of competitors filing suit under the deceptive and unfair trade practice provisions of the Lanham Act.

America’s Health Insurance Plans (AHIP) supported the rule, commending the Administration for the step to “shed some light on the ‘black box’ of drug pricing” and for providing information to patients that will “better empower” them to make the “right” healthcare decisions.

PhRMA, which expressed concern that the rule could be confusing for patients and may discourage them from seeking needed medical care, announced the launch of a new platform called the Medicine Assistance Tool (MAT). The tool links to the websites referenced in company DTC television advertising and includes a search tool to help patients connect to financial assistance programs. MAT adheres to PhRMA’s updated Guiding Principles on Direct-to-Consumer Advertisements About Prescription Medicines stating that DTC ads should direct patients to where they can find information about the cost of the medicine, which Health Policy Weekly covered at the time.

The final rule, which takes effect in 60 days, was part of the Trump Administration’s Blueprint to Lower Drug Prices. The rule was accompanied by a press release and fact sheet.

There are questions about the utility of publicizing wholesale price given that most people have prescription drug coverage and, therefore, will not pay the full WAC for a drug. While additional information can be useful, prescription drug cost-sharing needs to be considered on an individual basis.


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Mama Mia, Here We Go Again: IPI Proposal Builds on Failed Past Programs


This week, Xcenda released a paper exploring the wide-scale implications of the proposed International Pricing Index (IPI) model. The paper, done on behalf of the Part B Access for Seniors and Physicians Coalition (ASP Coalition), highlights the implications to patients including treatment delays and limited access to treatments and providers—all without necessarily sharing the cost savings.

When talking about the IPI model, it is often left out that this is a price control that imports prices from other countries without acknowledging the way those countries are able to maintain those prices—namely access. The 14 countries in the IPI model’s basket, on average, provide access to only 48% of the new drugs developed in the past 8 years, and it took an average of 16 months after their initial global launch for them to become available in those countries. If the US follows through with the IPI model, American patients may very well face those same access restrictions. Part B beneficiaries, who often have serious, complex conditions like cancer and rheumatoid arthritis, have the right to access treatments deemed clinically appropriate by their providers. Under the IPI model, vendors with no clinical expertise may have the power to impose restrictions on care and collect revenue as a new middleman in the system. Additionally, the IPI could have a significant impact on pharmaceutical research and development, resulting in fewer new drugs for patients.

These potential impacts lead us to consider the ultimate question: does the solution solve an existing problem or create new ones?

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It’s Not That Kind of Labor: House Appropriations Concerns Re: (Part) D Sections


On Wednesday, the House Appropriations Committee approved a significantly higher budget—$117 billion more than 2019—for the FY2020 Labor, Health and Human Services (Labor-HHS), Education, and Related Agencies. In the 2020 appropriations bill report, the Committee:

  • Expressed opposition to the Administration’s proposal to grant Part D plans the authority to exclude drugs from the 6 protected classes on their formularies and to increase usage of step therapy and prior authorization. The committee felt the proposal “would potentially delay access” to “critical therapies” for HIV, cancer, and mental illness
  • Recommended that CMS consider health benefit design pilot programs that would remove specialty tiers so patients could afford new gene therapy and biologic treatments, particularly for those with rare diseases
  • Protested against plans using copay accumulators; the committee believes such programs chill patients’ ability to receive charitable assistance to help defray the cost of their drugs
  • Requested HHS submit a report to Congress on changes to prescription drug prices over the past 10 years for programs including Medicare, Medicaid, and the Veterans Administration

If some of these activities are approved by the full House, perhaps Congress will be able to peel away at the onion that is prescription drug pricing and the drug supply chain. The House Energy and Commerce Committee hearing on Thursday certainly did not provide much of a transparent description about what is involved in the prescription drug price process. (See article below.)


Mama Said Don’t Give up, It’s a Little Complicated: High Hopes on Drug Pricing


Yesterday, the Health Subcommittee of the Committee on Energy and Commerce held a hearing on Lowering Prescription Drug Prices: Deconstructing the Drug Supply Chain with an aim to untangle the drug supply chain, as it believes Congress and consumers do not have a clear picture of this process. Witnesses who testified included representatives from manufacturers, pharmacy benefit managers (PBMs), and provider and patient advocacy groups. Chairwoman Anna Eshoo (D-CA) noted, “We have a lot of things to fix, and there really is an urgency to it…. What is a source of inspiration to me here is there is bipartisan agreement on this…. Medicine is part of public health, and we have the responsibility to make sure that medicines reach people.”

As part of this effort, on the same day, a bipartisan contingent of leaders from the Senate and House of Representatives introduced the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act that would require drug manufacturers to inform HHS 30 days before a planned increase of more than 10% in 1 year or 25% over 3 years for certain drugs with a WAC of $100 or more per month supply, or per a course of treatment that lasts less than a month. While some committee members expressed frustration at how they believed manufacturers and PBMs continued to point fingers at each other without offering solutions, there was broad support by those testifying to increase transparency of drug prices. Other issues discussed were:

  • Developing safe harbors from the anti-kickback and best-price regulations to increase implementation of value-based agreements in federal government systems
  • Designing real-time benefit checks between the prescriber and PBM
  • Capping beneficiary out-of-pocket costs in the catastrophic phase (5%)
  • Providing copayment assistance to Medicare beneficiaries that would require either a legislative or regulatory fix (by the Office of Inspector General) to allow manufacturers to offer this to patients
  • Considering changes to drug packaging to reduce wastage
  • Cautioning use of step therapy by plans

One thing is for sure: Congress intends to continue to look at drug costs from every angle.


Legislative Bytes

  • For the first time, the full House Energy and Commerce Committee addressed the drug pricing issue by approving 2 bills related to providing generic and biosimilar manufacturers with more transparent information about drug patents and marketing exclusivity: the Orange Book Transparency Act of 2019 (HR 1503) and the Purple Act Continuity Act of 2019 (HR 1520).
  • Expect more activity from the Committee next week with plans to take up the Strengthening Health Care and Lowering Prescription Drug Costs Act (HR 987), composed of several individual bills including the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 (CREATES Act) (HR 965).
  • On Monday, the Committee on Rules will meet to grant a rule to allow members to submit proposed amendments to the floor for consideration of the Strengthening Health Care and Lowering Prescription Drug Costs Act (HR 987).

Concept to Coverage:
Utilization of Value Assessment Frameworks in Payer Decision Making


ISPOR 2019 Symposium | May 21, 2019 | 7:15–8:15 AM CT

In an era when VAFs are formally being adopted and impacting coverage, pricing, and reimbursement decisions, we examine recent high-profile cases where specific VAFs are being utilized and discuss their impact on the broader trend toward formal adoption of VAF recommendations in the United States.

This symposium will also review recent payer trends and provide perspective from payer decision makers on their own experiences incorporating “value” into coverage determination.

Learn more about our participation at ISPOR 2019 >


Have immediate needs to evaluate how ICER and other VAFs may impact your product portfolio?

Contact us to set up a free 30-minute consultation at ISPOR 2019 >




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Don’t Tell Mom, 340B Reform (Almost) Dead


An attempt by HHS to change 340B reimbursement from average sale price (ASP) +6% to ASP −22.5% was ruled unlawful, for the second time in 7 months, by the same judge. The ruling was applauded by the plaintiffs: the American Hospital Association, America’s Essential Hospitals, and the American Association of Medical Colleges. But in his ruling, Judge Rudolph Contreras of the US District Court for the District of Columbia invited another effort by HHS to reform the payment, remanding the rate adjustment rules back to the agency and stating, “Despite the fatal flaw in the agency’s rate adjustments, vacating HHS’ 2018 and 2019 rules is not the best course of action, given the havoc vacatur may wreak on Medicare’s administration.” He also, notably, did not order hospitals to be compensated for lost 340B payments.

The effort by HHS to reduce reimbursement is motivated by a belief that the difference between the discounted price received by providers and the amount reimbursed by CMS represents an unwarranted windfall to providers. The plaintiffs in this case counter that claim, noting that the court decision would allow hospitals and health systems in this program to adequately serve their vulnerable patients and communities.

In a much clearer win for health providers, HHS, on April 1, published a list of 340B drug ceiling prices after an approximately 9-year delay. The ceiling prices represent the highest amount manufacturers can charge participating hospitals for 340B drugs. The move is designed to provide pricing transparency and eliminate the possibility of overcharging by manufacturers.


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:


Concerned About ICER’s Unsupported Price Increase Assessment?


Let’s talk about how the current value framework landscape can impact your launch.

On May 2, 2019, ICER announced an opportunity for public input on its methodology. Come talk with former ICER associates and current Xcenda value experts on proactive measures your HEOR teams can take to be prepared.

Contact us now, or if you’re attending ISPOR 2019 this month, connect with us in New Orleans.






“It’s very difficult for a patient to find out the price of anything. I’ll give you an example of a cancer survivor who has made the point to ask everyone who’s given him a chemo treatment, what does this cost? The answer was, ‘I don’t know’…. It seems to me the patient ought to be able to get an answer to what the cost is.”

– Sen. Dianne Feinstein (D-CA), Ranking Member on the Senate Committee on Judiciary, at the hearing on Intellectual Property and the Price of Prescription Drugs: Balancing Innovation and Competition, May 7 (Enter the DTC final rule published on May 8, see Featured Story)





A new report from the RAND Corporation finds that private health insurance plans pay hospitals more than 240% for healthcare compared to what Medicare plans would pay.

Source: “Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely,” RAND Corporation, May 9


ISPOR 2019

May 18–22 | New Orleans, LA
Xcenda’s global HEOR experts join more than 4,200 attendees from around the world at ISPOR 2019 in New Orleans. Timely topics such as VAFs and what to expect with them in the future will be our focus. Join us at booth #501 to meet our team and learn how we can help you navigate the changing healthcare landscape. 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



Doug Cook
President | Commercialization Services & Animal Health

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


Jenna Kappel | Stew Kaufman | Scott Shields


Laurie Kozbelt | Ellen Olson


May 10, 2019


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