Stakeholders from pharma, PBMs, and other healthcare stakeholders sit in on the House Energy and Commerce Committee hearing on drug transparency.

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May 24, 2019


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Editor’s Note: We *think* we are going to take next week off from Health Policy Weekly (cue jingle, we’re thinking Health.Policy.WEEEEEEEK.LY.) No summer hours around here, but we like to pretend. If something big happens, we’ll put something out. Same bat time, same bat channel.


Mirror, Mirror on the Wall: Will Seeing Drug Prices Make Them Fall?


On Tuesday, the House Energy and Commerce Committee held a hearing on Improving Drug Pricing Transparency and Lowering Prices for American Consumers, with witnesses including representatives from pharma, pharmacy benefit managers (PBMs), medical specialties, patient advocacy, and public policy.

While Democrats pushed for greater transparency, Republicans thought the impacts of some of the reporting requirements could lead to unintended consequences for patients (eg, reduced availability of samples). Members, on both sides, and witnesses did agree that transparency requirements alone would not help decrease drug prices, but that they could be “a piece of the puzzle” to bring down costs of drugs for consumers.

Early discussion in the 3-hour hearing centered on the Prescription Drug STAR Act (HR 2113, Prescription Drug Sunshine, Transparency, Accountability, and Reporting Act), passed unanimously last month by the Ways and Means Committee, with criticism from Republican panel members. Specifically, they felt the reporting requirements in the SPIKE Act (HR 2069, one of the bills in the STAR Act package)—ie, manufacturers needing to justify drug price increases that are 10% over 1 year, 25% over 3 years, or products launching at $26,000 or more—could present undue hardship for start-up manufacturers working on therapies to treat rare diseases.

Rep. Janice Schakowsky (D-IL) contrasted the SPIKE Act with her bill, the FAIR Act (HR 2296, Fair Accountability and Innovative Research Drug Pricing Act), which does not allow manufacturers to pick and choose information to report. Rather, the FAIR Act has bipartisan support and would require manufacturers to provide the Secretary of the Department of Health and Human Services (HHS) with the research and development costs for the drug, net profits attributed to the drug, and marketing and advertising spending on the drug. All non-proprietary information would be public.

Panel members felt the FAIR Act would be helpful for the public and Congress to more clearly understand the costs involved in the creation of innovative drugs. In particular, it would provide clarity about the estimated costs of 9 out of 10 drugs that fail to launch; as noted by one witness, manufacturers typically have to recoup a whopping $2.6 billion on the costs of drugs that do not receive approval by the Food and Drug Administration (FDA).

Other notable discussion points:

  • Discussion of the appeals process and how difficult it is for a patient to understand it. When a PBM switches a patient’s drug to a lower-cost alternative that is not therapeutically equivalent, it often takes a physician and a lawyer to appeal.
  • Linking price to the “clinical value of the drug” for single-source drugs with no competitors could lead to better accountability of the manufacturers who develop them.
  • Allowing Medicare to consider getting involved in negotiating prices or using reference pricing (without formulary exclusion) for single-source drugs with no competitors should be considered as a way to decrease cost. (See story below on the Congressional Budget Office thoughts to this idea.)
  • There was still a strong difference of opinion between representatives of PhRMA and the Pharmaceutical Care Management Association (PCMA) about whether (PhRMA) or not (PCMA) the Administration’s proposed rebate rule would decrease drug costs.

The hearing wrapped up quickly as House members received notice of a special briefing all Representatives needed to attend. As one committee member aptly put it, this wasn’t the first hearing on prescription drug prices, and it won’t be the last.


AMCP Webinar: Trends in Healthcare: Artificial Intelligence and Tech


Wednesday, May 29 | 2:00–3:00 PM ET

Health IT, artificial intelligence, and big data: it’s all contained within the technology global influencer we are tracking in the AMCP Foundation Trends in Healthcare. Register now to gain insight and prepare for the tech changes arriving at your organization in the coming years.

Xcenda’s Amy Duhig, PhD, Vice President of Strategic Market Access and Intelligence, will join Tina Moen, PharmD, Senior Deputy Chief Health Officer and Chief Pharmacy Officer at IBM Watson Health, to discuss the latest findings from the Foundation’s environmental monitoring. Two innovative case studies about artificial intelligence and wearables will be discussed.

Register now >



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Legislative Bytes

  • Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) released the Lower Health Care Costs Act of 2019, draft legislation that includes 5 main sections: potential approaches for preventing surprise medical bills, lowering prescription drug prices, increasing transparency in healthcare, bolstering public health, and improving the exchange of health IT. See press release.
  • Ways and Means Committee Chairman Richard Neal (D-MA) and Energy and Commerce Committee Chairman Frank Pallone Jr. (D-NJ), along with Ranking Members Kevin Brady (R-TX) and Greg Walden (R-OR) announced the solicitation for comments on draft legislation to reform and improve the Medicare Part D program that would establish an out-of-pocket cap for Medicare beneficiaries. See press release.
  • Sen. Marsha Blackburn (R-TN) introduced S 1532, which would require the Government Accountability Office to study the role PBMs play in the pharmaceutical supply chain and provide Congress with appropriate policy recommendations.
  • Sen. Bernie Sanders (S-VT), Sen. Michael Bennet (D-CO), Rep. Ro Khanna (D-CA), and Tulsi Gabbard (D-HI) introduced the Opioid Crisis Accountability and Results Act that would: prohibit illegal marketing and distribution of opioids; create criminal liability for top company executives; penalize drug manufacturers who illegally advertise, market, or distribute an opioid product; and require drug makers to reimburse the country for the negative economic impact of their products. See press release.
  • Sen. Chuck Grassley (R-IA) and Sen. Ron Wyden (D-OR) sent a letter to the Centers for Medicare & Medicaid Services (CMS) seeking insulin cost data. See press release.

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The “I’s” Have It—ISPOR, IVI, ICER


It’s been a busy week on the value front! On Monday, the Innovation and Value Initiative (IVI) launched a new series of research briefs highlighting key findings and methods emerging from its ongoing work in the development of open-source value models. The “Value Blueprints” series is intended to advance the discussion for the next generation of value assessment methods. The first 2 briefs are:

  1. “Patient Insights as the Foundation for Value,” which explores the frequent trade-offs that patients with non-small-cell lung cancer make during treatment decisions
  2. Exploring the Implications of the Value of Hope,” which examines whether the value of hope should be considered as a key component of patient-centered value assessment

IVI also announced that it is seeking proposals to estimate attribute-specific partial value functions and preference weights for use in multi-criteria decision analysis in the IVI’s individual patient simulation model for rheumatoid arthritis (IVI-RA model). The deadline for submissions is June 15, 2019.

The Institute for Clinical and Economic Review (ICER) announced, also on Monday, that it will be developing 2 cloud-based tools to help decision makers integrate ICER-generated analyses and content into their formulary, benefit design, and pricing strategy. The ICER Evidence Compendium will be a web-based interface that will include a searchable and sortable summary of frequently cited results from ICER’s evidence reports. The ICER Interactive Modeler will allow stakeholders to tailor parameters of ICER economic models based on a specific patient sub-population or a unique cost structure. Both of these tools will be subscription-based products. ICER will be conducting interviews with potential end users to help inform the final design and subscription model.

On Wednesday, ICER released a Draft Evidence Report for its evaluation of 2 gene therapies to treat Duchenne muscular dystrophy (EXONDYS 51 [eteplirsen] and golodirsen) as well as EMFLAZA (deflazacort), a corticosteroid. This draft report will be open to public comment until 5:00 PM ET on June 18, 2019.

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

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One Rule for Which We Can Stop Stalking at 4:15, At Least Until 6/4


On Monday, CMS released a memo to Part D plan sponsors containing additional information regarding submission of calendar year (CY) 2020 Part D plan bids. Part D plans have been asking CMS if/how the proposed rule excluding rebates on prescription drugs from safe harbor protection under the Anti-Kickback Statute (AKS) rebates would impact their bids.

Monday’s memo was the second CMS released relating to Part D bids with respect to the rebate reform proposal. In April, CMS informed plans that all bid submissions should be consistent with AKS law and regulations in effect at the deadline. In other words, plans would submit bids based on the current rebating system, not based on the Administration’s rebate proposed rule.

The memo released on Monday answers a number of questions CMS has received from stakeholders; many of these instruct plans to submit bids consistent with regulations current to the submission deadline.

The bid submission deadline is June 3, 2019, and many stakeholders had been asking whether the recent rebate proposal would be finalized before this deadline and how that might impact bids. As expected, the memo confirms that the rebate proposal will not be finalized by the bid submission deadline.


Punch List: HHS Has Busy Regulatory Agenda Remaining


The Trump Administration, including HHS, released its spring regulatory agenda on Wednesday. (Notably, the Office of Management and Budget listed the timetables for 2 controversial regulations—the International Pricing Index (IPI) in August, and drug-rebate reform in December—as being released later than expected, though such release dates are notoriously inaccurate. Word on the street is that on Thursday a CMS official said as much.

We have listed some relevant regulations from the agenda below, leaving out the standard annual updates for Parts A, B, C, and D, among others.


Rulemaking Stage




Proposed Rule

Conditions for Coverage for End-Stage Renal Disease Facilities—Third-Party Payments (CMS-3337-P)

July 2019

Proposed Rule

Medicare Coverage of Innovative Technologies

July 2019

Proposed Rule

Specialty Care Models to Improve Quality of Care And Reduce Expenditures (CMS-5527-P)

July 2019

Proposed Rule

International Pricing Index Model For Medicare Part B Drugs (CMS-5528-P)

August 2019

Proposed Rule

Comprehensive Care for Joint Replacement Model Three Year Extension and Modifications to Episode Definition and Pricing (CMS-5529-P)

September 2019

Proposed Rule

Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Payments (VBP) for Drugs Covered in Medicaid

October 2019

Final Rule

Regulation to Require Drug Pricing Transparency (CMS-4187-F)

December 2019


Proposed Rule

Revisions to the Safe Harbors Under the Anti-Kickback Statute and Beneficiary Inducements Civil Monetary Penalties Rules Regarding Beneficiary Inducement

July 2019

Final Rule

Removal of Safe Harbor Protection for Rebates to Plans or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection

November 2019



CBO: It’s Called Leverage


Last Friday, the Congressional Budget Office (CBO) provided an update to its 2007 responses to 2 questions relating to the potential impact of allowing the HHS Secretary to negotiate with drug manufacturers over Medicare Part D drug prices. Currently, the Secretary does not have statutory authority to negotiate or set reimbursement rates between manufacturers and Medicare prescription drug plans (PDPs).

In the update, the CBO confirmed its initial stance that the Secretary’s negotiating authority “would likely have a negligible effect on federal spending” without the ability to establish a formulary as leverage to negotiate with manufacturers. The CBO also reiterated that the Secretary could leverage public health emergency as a “bully pulpit” to pressure manufacturers to lower drug prices—particularly in select drug or drug types that have no close substitutes and are priced relatively high. However, the CBO concluded that the “overall impact on federal spending from negotiations targeted at selected drugs would be modest.”

Due to the mounting public pressure to reduce overall healthcare expenditures, key stakeholders are focused on shifting the paradigm to pressure manufacturers to lower drug prices. The difficulty is that we already have a system where there is negotiation and leverage through formulary design; extracting additional savings could require price controls, which risks the foundation of the current program.


Building the Case: The Growing Credibility of Biosimilars


Recently, a review published in Expert Opinion on Biological Therapy provided results from controlled trials and real-world evidence addressing the adoption of biosimilars for treatment of immune-mediated inflammatory diseases. The authors concluded that uncertainty over potential immunogenicity and concerns over patient responsiveness to new delivery devices were unfounded.
The authors found that among the 25 controlled trials where clinically stable patients were switched to biosimilars for etanercept, adalimumab, infliximab, and rituximab, there were no safety or efficacy concerns. In 3 trials with multiple biosimilar switches, comparable safety, efficacy, and immunogenicity were also noted.

In real-world observations from the Danish national registry, no safety events were reported after switching to an etanercept biosimilar. Similarly, 53 observational studies involving switching to an infliximab biosimilar also found no significant risk. Several surveys suggest innovations in the delivery devices for self-administered biosimilars for rheumatic patients were well received, and in some cases preferred to the reference products.
Biosimilar endorsement from prominent medical societies may still be inadequate to overcome widespread patient and provider hesitation. The authors recommend that more emphasis is needed on the economic benefits, levels of evidence, education of stakeholders, and engagement from manufacturers to accelerate the acceptance of biosimilars.


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 released guidance to manufacturers on 3 topics:
    • Treatment of rebates provided to Medicare Advantage plans (including those that offer prescription drug coverage [MA-PD plans]) for Medicare Part B utilization in the manufacturer’s determination of best price; calculation of a drug’s average manufacturer price (AMP) for inhalation, infusion, instilled, implanted, or injectable (5i) drugs (5i AMP); and average sales price (ASP)
    • Best approach for manufacturers to notify CMS of their intent to terminate their National Drug Rebate Agreement (NDRA)
    • Optional vs mandatory effective dates of the NDRA
  • The Kaiser Family Foundation released an analysis comparing prescription drug spending and use across large employer plans, Medicare, and Medicaid.
    • In 2017, total US retail prescription drug spending was $333 billion, after accounting for rebates, with the majority (82%) of spending incurred by the 3 major sources of payment in the US: private health insurance, Medicare, and Medicaid. Among all payers, private health insurance accounted for the largest share of drug spending, at 42%, followed by Medicare at 30%, and Medicaid at 10%. Patient out-of-pocket costs represented 14% of total retail drug spending.


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






“Perhaps the most difficult challenge, however, is payment [for advances in cell and gene therapies]. Fortunately, companies, think tanks, and policymakers are already exploring innovative solutions, such as the option to pay in installments over several years and the possibility of refunding payment if the treatment is not successful….

“But these new models are severely restricted by current Medicaid and Medicare payment barriers. The federal government should have the flexibility to encourage these novel and cost-saving approaches. Unless Congress passes new legislation, our health-care system will struggle to evolve from a fee-for-service approach to the value-based payment model necessary to effectively scale up these new therapies and provide patient access to them. Congress should clarify that value-based payment approaches that may help reduce overall health-care costs will not inadvertently trigger government price reporting or anti-kickback provisions.”

– Novartis CEO Vas Narasimhan, commenting about how the healthcare system is not configured to pay for gene therapy

Source: “Commentary: Novartis CEO: Gene Therapy Offers Hope of Cures in One Treatment, but US Needs New Pricing and Payment Model,” CNBC, May 17



Between 61° and 91°


For all of you women who have cardigans on the back of your chairs as you read this…
Within a temperature range of 61 and 91 degrees Fahrenheit, females generally exhibit better cognitive performance at the warmer end of the temperature distribution, while men do better at colder temperatures.

Source: “Battle for the Thermostat: Gender and the Effect of Temperature on Cognitive Performance,” PLOS ONE, May 22


AMCP Webinar | Trends in Healthcare: Artificial Intelligence and Tech

Wednesday, May 29 | 2:00–3:00 PM ET
Xcenda’s Amy Duhig, PhD, Vice President of Strategic Market Access and Intelligence, will join Tina Moen, PharmD, Senior Deputy Chief Health Officer and Chief Pharmacy Officer at IBM Watson Health, to discuss the latest findings from the AMCP Foundation Trends in Healthcare environmental monitoring of health IT, artificial intelligence, and big data. Two innovative case studies about artificial intelligence and wearables will be discussed. Register now


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 | Cliffrey Li | Scott Shields | Linnea Tennant


Laurie Kozbelt | Ellen Olson


May 24, 2019


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