CMS approves Washington State’s request for “Netflix” model to pay for hepatitis C drugs.

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June 14, 2019


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“Are You Still Watching?” Washington State Receives Approval for “Netflix” Model


On Tuesday, the Centers for Medicare & Medicaid Services (CMS) approved Washington State’s Medicaid state plan amendment to allow value-based supplemental rebate negotiation and subscription-style prescription drug purchasing of hepatitis C drugs. Washington is the fourth state approved to tie the payment of a prescription medication to its delivered value, a trend growing in popularity among states as a cost-control mechanism for pricey drug therapies.

Traditional CMS-authorized supplemental rebates are exempt from Medicaid’s “Best Price” rule, which requires manufacturers to offer their lowest negotiated price to states participating in Medicaid. Instead, the value-based supplemental rebates will be negotiated between states and manufacturers, with agreements predicated on specified value metrics and guidelines.

Washington’s proposed purchasing strategy for hepatitis C drugs will function like a Netflix subscription. Each year, the state will pay a fixed sum to a chosen pharmaceutical manufacturer for an unrestricted supply of the drug.

In 2018, Gov. Jay Inslee (D) issued a directive to eliminate the hepatitis C virus (HCV) in the state by 2030. Newly acquired HCV infection rates in Washington increased 126% in 2013–2017 when compared to the preceding 5-year period, and rates are expected to rise in parallel with increases in injection drug use and opioid abuse. As a result, Gov. Inslee called on state health officials and associated partners to make improvements to public health infrastructure and design a purchasing strategy that would afford treatment to the 65,000 Washingtonians living with chronic HCV.

In April, AbbVie was identified as the apparently successful bidder to work with the state. Its drug is anticipated to treat (and will ideally cure) 97% of all patients living with HCV in Washington.

The agreement seems to be a win-win strategy for both the state and manufacturer: the state is incentivized to treat as many individuals as possible with the unlimited drug supply, and the manufacturer is guaranteed a pre-established payment. Other states will be watching.


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Legislative Bytes

  • House Ways and Means Chairman Richard Neal (D-MA) will head the House Democrats’ Trade Working Group, a task force charged with negotiating with the Trump Administration to overhaul elements of the US-Mexico-Canada trade agreement.
    • The Democratic members were appointed by Speaker Nancy Pelosi (D-CA) and are divided into 4 subgroups: Drug Pricing, Labor, Environment, and Enforcement. Reps. Earl Blumenauer (D-OR) and Jan Schakowsky (D-IL) will lead the Drug Pricing team.
  • Sen. Margaret Wood Hassan (D-NH) introduced S.1785 that would exclude authorized generic drugs from calculation of the average manufacturer price for purposes of the Medicaid drug rebate program.
  • The Senate Aging Committee announced a June 19 hearing on the Complex Web of Prescription Drug Prices, Part III.
  • Florida Gov. Ron DeSantis (R) signed CS/HB 19: Prescription Drug Importation Programs, which establishes 2 programs—the Canadian Prescription Drug Importation Program (CPDI Program) and the International Prescription Drug Importation Program (IPDI Program)—to import Food and Drug Administration (FDA)-approved prescription drugs into the state for consumers and public programs. President Donald Trump has been supportive of the plan and has directed Health and Human Services Secretary Alex Azar to work with DeSantis. Vermont and Colorado have enacted similar laws, though all states first need permission from the federal government.

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NPC Asks “Tell Me Why” to ICER’s “I Want It That Way”


On Monday, the National Pharmaceutical Council (NPC) announced that it submitted comments to the Institute for Clinical and Economic Review (ICER) in response to a national request for public input on a methodological update to its Value Assessment Framework (VAF). NPC grounded its comments in the Guiding Practices for Patient-Centered Value Assessment, recommending modifications to the framework and assessment process as well as an expanded focus to include non-drug interventions. Specific suggestions for ICER included:

  • Instituting a more collaborative and transparent model development process that includes making ICER models available for public use and using 2 base cases to account for both payer and societal perspectives
  • More frequently utilizing real-world studies and formally considering these data as part of ICER’s Evidence Rating Matrix
  • Including broader results and context in press releases and report-at-a-glance documents
  • Extending the length of public comment periods
  • Establishing a disease-specific working group of clinical experts for each assessment

Last Friday, ICER announced plans to review acute therapies for the treatment of migraine, including 2 oral calcitonin gene-related peptide (CGRP) receptor antagonists, rimegepant and ubrogepant, as well as a 5-HT1F agonist, lasmiditan. These agents are currently under FDA review with an anticipated decision in the final quarter of 2019. Stakeholders are encouraged to share information relevant to the development of the evidence report recommendations during the Open Input period, which will end on June 25.

ICER also updated the timeline for its Valuing A Cure Initiative and now plans to post the white paper and draft methodology on August 6 and accept public comments through September 6. The Valuing A Cure Initiative is a year-long project to develop, test, and build consensus around methodological options for determining value-based prices for potential cures. ICER plans to finalize the white paper and methodology before the end of 2019 and will include, where appropriate, the recommendations in ICER’s 2020 VAF.

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

Note: To those of you now stuck with the Backstreet Boys in your head, you’re welcome.

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CMS Quality Plan: No Apologies to the Whales Here*


Detailed information on CMS’ progress toward a value-based health system was recently published in the 2019 CMS Quality Measure Development Plan (MDP) Annual Report. The report highlights CMS’ efforts over the past year to implement initiatives from the MDP, a strategic framework for clinical quality measure development to support the Medicare Merit-based Incentive Payment System (MIPS) and eligible Medicare alternative payment models (APMs).

Since the publication of the MDP in 2016, CMS has continued efforts to implement initiatives from the framework. This past year, CMS provided $26.6 million in financial grants as part of a 3-year collaborative agreement with 7 different organizations. This funding is intended to support partnerships with professional organizations, specialty societies, patient advocacy groups, and health systems, to address any gaps in the quality measure portfolio. The MDP Technical Expert Panel identified gaps in 5 specialties (allergy/immunology, emergency medicine, neurology, physical medicine and rehabilitation, and rheumatology) and recommended 76 subtopics for measure development to address this need.

CMS made additional progress in developing high-value quality measures by funding the development of 59 new measures and eliminating 26 established measures the agency determined were misaligned with the Meaningful Measures framework objectives. Consolidation of these measures resulted in a more focused list of proposed measures that CMS hopes will contribute to improved outcomes.

Further, CMS continued engagements with patients, caregivers, clinicians, and professional societies to ensure that multiple stakeholder perspectives were considered in the development of new quality measures.

CMS’ activities, as documented in the annual report, should help alleviate the burden of data collection for quality measure reporting, which is critical to enlisting clinicians in the transition to a value healthcare system.

*Reference to a story in The Washington Post about a very determined Italian man and his journey to Nantucket. 


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:

  • The final rule to eliminate rebates on prescription drugs from Medicare Part D and Medicaid managed care organization programs was sent to the Office of Management and Budget for regulatory review.
  • The departments of Health and Human Services, Labor, and the Treasury issued a final regulation that will expand the use of health reimbursement arrangements (HRAs). The departments estimate this expansion of HRAs will benefit approximately 800,000 employers and more than 11 million employees and family members, including an estimated 800,000 Americans who were previously uninsured. See FAQs.
  • CMS Administrator Seema Verma in a blog post argued against single-payer healthcare, stating that competition is the engine for lowering healthcare costs.
  • CMS released a fact sheet for 2019 Qualifying Alternative Payment Model Participants.
  • The US Preventive Services Task Force recommended insurers cover pre-exposure prophylaxis, or PrEP, seen as crucial in the fight against HIV for at-risk populations. The recommendation means that insurers will have to cover TRUVADA (emtricitabine and tenofovir disoproxil fumarate) without copays, deductibles, or coinsurance in the 2020 plan year. TRUVADA is the only formulation of PrEP approved by the FDA for use in persons at risk of sexual acquisition of HIV infection.
  • The American Medical Association’s House of Delegates adopted the following new policies to improve the Affordable Care Act:
    • Increasing the amount of, and expanding eligibility for, premium tax credits, including removing the “subsidy cliff”
    • Increasing amounts of cost-sharing reductions received by individuals who qualify for them
    • Extending eligibility for cost-sharing reductions beyond 250% of the family poverty level


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“We have to defend capitalism in this world. We have to be able to say to people, look, you cannot have a system that develops new drugs unless you can get access to the capital. And you can’t get access to the capital unless you get a return on investment that is commensurate with the huge risk we are taking in this business.

“I see my role as to optimize patient access to medicine and optimize a return on investment, not to maximize either….

“I get criticized by people on the left, because I don’t maximize the amount of drugs I can get to people. I can’t do that and be able to raise money. And people on the right will say, why are you giving the Ebola vaccine away? I’m not trying to maximize profit.”

– Merck CEO Ken Frazier, speaking at the Biotechnology Innovation Organization’s annual conference

Source: “From BIO meeting, Merck CEO backs capitalism, rebuts industry’s critics,” BioPharma Dive, June 5



5 | 20


The FDA approved Amgen’s KANJINTI (trastuzumab-anns), the fifth biosimilar to be approved for Roche’s HERCEPTIN (trastuzumab) and the 20th biosimilar overall.



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


Rachel Besse | Minha Choi | Anuja Kanaskar | Scott Shields


Laurie Kozbelt | Ellen Olson


June 14, 2019


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