We take a look at the FAQ issued by HHS on manufacturer coupons and out-of-pocket cost-sharing.

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Sept. 13, 2019


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Policy by FAQ: Why Bother With Formalities? Coupons Don’t Count Toward OOP


While we were on hiatus, the Departments of Labor, Health and Human Services (HHS), and Treasury issued a Frequently Asked Questions (FAQ) as official guidance delaying implementation of a 2020 rule related to health plan treatment of the value of drug manufacturer coupons toward out-of-pocket (OOP) cost-sharing.

The initial rule appeared in the HHS Notice of Benefit and Payment Parameters (NPP) for 2020, published on April 25, 2019, which permitted health plans to exclude drug manufacturer coupons from annual OOP maximums when a generic equivalent is available. The rule itself did not state the inverse—that plans must apply the coupon values to OOP maximums when there is no generic equivalent—though the preamble indicated that this was HHS’ position.

The rule led to confusion for insurers as it was read in potential conflict with existing Internal Revenue Service guidance related to health savings accounts. Acknowledging the rules’ conflicting guidance, the FAQ indicates that the agencies will revisit drug manufacturer assistance in guidance form for the 2021 plan year and that the application of drug coupons toward cost-sharing limitations will not be federally enforced in 2020.

Manufacturer coupon exclusions (referred to as copay accumulators) are increasingly being built into employer health plans—insurers and pharmacy benefit managers have long complained that coupons undermine formularies and the rebate system that supports formularies. The coupon exclusion rule, which attempted to strike a balance between encouraging patients to choose lower-cost generic drugs while also adhering to the design of Affordable Care Act (ACA)-imposed health plan cost-sharing limitations, is one of the myriad initiatives this Administration has proposed to lower prescription drug costs. But this one could come at the price of patient access.


Ensuring Access to Meds Remains a Moving Target


Learn what Health Policy Weekly’s Editor-in-Chief Jennifer Snow had to share with Pharmacy Practice News about the added pressure on patient assistance foundations and patient representatives to help patients cover their medications.

Read article >



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Not All Accidental Releases Are Accidental: Pelosi Drug Pricing Plan


Details of a possible proposal addressing drug pricing by Speaker of the House Nancy Pelosi (D-CA) were revealed on Monday. Senior Democratic aides announced that the document is “an out-of-date draft,” that it is not representative of a formal plan or details that have been distributed to the caucus, and that the committees are still in discussion.

Although the summary draft may not be an official proposal or in its final form, it highlights the substantial changes to current drug pricing methodology possibly being proposed by a Democratic-controlled House and represents a view so left-leaning it could make the Senate Finance Committee’s proposal from July look palatable to more conservative members.

The summary draft plan suggests:

  • Having the HHS Secretary directly negotiate prices for the top 250 high-cost drugs that don’t have a minimum of 2 generic or biosimilar competitors. Prices negotiated by HHS would also apply to the private market, not just Medicare
  • Establishing an International Pricing Index to prevent US drug prices from exceeding 1.2 times the average prices in 6 other countries
  • Issuing penalties and fees to manufacturers that refuse to negotiate with HHS, amounting to 75% of the gross sales of the drug in question from the previous year
  • Implementing inflationary penalty rebates that look retrospectively to 2016 in Medicare Part B and Part D if manufacturers raise list prices above inflation rates
  • Altering the Medicare Part D benefit design to provide an annual OOP cap on spending

Analysts have already criticized the plan as being “too aggressive,” claiming it is unlikely to be taken up by a GOP-controlled Senate or to get support from Congressional Republicans who have historically opposed direct government negotiation and policies impacting the commercial market. However, President Trump welcomed the Pelosi plan approach earlier this week, setting up an interesting dynamic for Senate Republicans if the President were to endorse Pelosi’s final plan.

The industry continues to wait with anticipation for a formal proposal to be announced by Speaker Pelosi. Reactions, support, and/or opposition from Congressional Republicans as well as the White House will be key areas to watch. It remains to be seen if a divided Congress will be able to pass legislation on drug pricing by the end of the year, especially ahead of a vital election year.


Legislative Bytes


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No Vacay for Value: ICER Kept Itself Busy During Summer’s End


Welcome back to the Value Corner; it has been a busy couple of weeks while Health Policy Weekly was on break. As mentioned in our August 23 “Corner,” the Institute for Clinical and Economic Review (ICER) posted its proposed 2020 Value Assessment Framework (VAF) update for public comment. Below is a summary of the key updates and restatements of current methods. Specifically, ICER will:

  1. Augment efforts to use real-world evidence (RWE), including generation of RWE to complement existing data sources
  2. Revise and expand potential other benefits and contextual considerations
  3. Continue to use multiple measures to assess cost-effectiveness (ie, Quality-Adjusted Life-Year [QALY] and Equal Value of Life-Years Gained [evLYG])
  4. Report pricing benchmark results for common cost-effectiveness thresholds from $50,000 to $200,000
  5. Implement a formal process for reassessment of any new evidence 1 year after the release of Final Evidence Reports
  6. Add a “Controversies and Uncertainties” section to the cost-effectiveness chapter of reports to broaden the discussion of alternative model structures
  7. Expand its evidence-rating categories to capture high certainty of at least a comparative net health benefit
  8. Compare its evidence ratings to Germany’s health technology assessment (HTA) agency rating system

ICER is accepting public input on the proposed changes to its 2020 VAF until October 18. In addition, ICER will livestream a meeting of invited stakeholders on September 17 starting at 8:30 AM to gather additional input on its draft assessment methods for single or short-term transformative therapies (SSTs), which will complement and build upon the ongoing update to the 2020 VAF.

On Wednesday, ICER released the Draft Evidence Report for type 2 diabetes (T2D), assessing the effectiveness and value of oral semaglutide and other treatments. Although ICER concluded that oral semaglutide is expected to provide incremental health benefit vs alternative T2D treatments in terms of major adverse cardiovascular events prevented, ICER was unable to draw conclusions on cost-effectiveness with any certainty. ICER stated the ultimate value of oral semaglutide will be determined by its price and long-term effectiveness. The Draft Report will be open for public comment until October 8, and the Final Evidence Report will be published on October 31. ICER also posted its Draft Scoping Document for the assessment of sickle cell disease, which will consider 2 prospective new therapies (crizanlizumab and voxelotor). This Draft Scoping Document is open for public comment through September 20.

Additionally, ICER announced 2 new topics for assessment in 2020: ulcerative colitis and cystic fibrosis. The ulcerative colitis review will evaluate ENTYVIO (vedolizumab), REMICADE (infliximab), INFLECTRA (infliximab-dyyb), HUMIRA (adalimumab), SIMPONI (golimumab), XELJANZ (tofacitinib), and STELARA (ustekinumab). The cystic fibrosis assessment is an update to ICER’s May 2018 review and will focus on elexacaftor/tezacaftor/ivacaftor as well as any new evidence that has become available on the 3 other Food and Drug Administration (FDA)-approved treatments previously evaluated. Both reports will be reviewed by the California Technology Assessment Forum (CTAF) and will be open for public comment until September 24 and September 25, respectively.

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

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Cigna Embarcs on a New Way to Pay for Gene Therapy


Cigna recently announced a new offering, Embarc Benefit Protection, in partnership with Express Scripts, eviCore, Accredo, and CuraScript SD to provide a way to make high-cost gene therapies more accessible and affordable for patients. Through this offering, patients pay nothing OOP for the cost of the therapy. Participants of the network, such as employers and health plans, pay $1 per-member per-month to provide patients with access to covered gene therapy treatments. Pharmacies and distributors are paid by Embarc. According to Steve Miller, MD, Cigna’s Executive Vice President and Chief Clinical Officer, payers that participate in the offering will be getting the best price for the therapy and uniform utilization management.

The Embarc Benefit Protection offering will initially include 2 gene therapies, LUXTURNA (voretigene neparvovec-rzyl), a treatment for a type of inherited retinal disease, and ZOLGENSMA (onasemnogene abeparvovec-xioi), a treatment for spinal muscular atrophy in children less than 2 years old, with more gene therapies potentially added in the future.

The rationale for the zero cost-share? Dr. Miller said eliminating the patient’s copay was a key focus in designing the program. Someone with a $6,000 OOP maximum is not appreciably contributing to the cost of a $2 million therapy, but it may lead them down the path of bankruptcy.

As pharmaceutical companies continue to develop innovative therapies costing millions of dollars, more inventive ways for payers to anticipate, manage, and pay for them will continue to be needed to ensure patient access and affordability for these new, life-changing therapies.


Let Me Count the Ways: More Americans Go Without Health Insurance


With this week’s US Census Bureau report, the impact of changes by the current Administration to the ACA’s coverage requirements became clear: the rate of uninsured Americans grew by 0.6% from 2017 to 2018 (7.9% to 8.5%). That increase translates to approximately 2 million more people without health insurance, or a total of 27.5 million uninsured Americans. Not since the last financial crisis, from 2008 to 2009, has the uninsured rate increased.

Highlights from the report:

  • Private commercial health insurance remains more prevalent than public insurance (67.3% compared to 34.4%, with some people having more than 1 type of care); of private insurance, employer-based insurance remained the most common (55.1%).
  • State or federal health exchange plan coverage estimates were included in the report for the first time, approximating 3.3% of the population, or 30.8% of those with direct-purchase insurance.
  • Medicaid coverage decreased slightly (down 0.7% to 17.9% of the population), and Medicare increased slightly (0.4%) due to more Baby Boomers reaching age 65.
  • The percentage of uninsured people decreased in 3 states (New York, South Carolina, and Wyoming) and increased in 8 states (Alabama, Arizona, Idaho, Michigan, Ohio, Tennessee, Texas, and Washington), with most states maintaining relative status quo.

What is not reflected in the Census report is the impact of the implementation of any of the Administration-approved work requirements for Medicaid coverage. If the rules do not get blocked by court action, it is likely that Medicaid coverage could decrease, though this may be offset as some states reconsider Medicaid expansion. And, there is the potential (though slim) that changes to Medicare benefit plans could also impact future reports.


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 Centers for Medicare & Medicaid Services (CMS) informed Idaho that its application for a state innovation waiver to expand its Medicaid program was incomplete. Idaho failed to include sufficient analysis for CMS to assess the effects of the proposed waiver. However, CMS suggested that, even if Idaho’s application were revised to include this analysis, its waiver would not be approved.
  • The Medicare Payment Advisory Commission (MedPAC) posted the slides from its meeting on September 5 and 6.
  • A PharmacoEconomics analysis studied the impact of plan‑level access restrictions on the effectiveness of biologics among patients with rheumatoid arthritis (RA) or psoriatic arthritis (PsA). The study found that, compared with patients in plans without access restrictions or with prior authorization only, RA and PsA patients in insurance plans with step therapy had lower odds of treatment effectiveness, mainly due to lower odds of adhering to treatment.


“[We] US Senators...urge the Department of Health and Human Services to use its regulatory authority to reform direct and indirect remuneration (DIR) with respect to pharmacies under the Medicare Part D program.... CMS documented an extraordinary 45,000% increase in DIR fees paid by pharmacies from 2010 to 2017. This is an untenable trend for pharmacies and causes higher prices for beneficiaries at the pharmacy counter.”

– Chairman Chuck Grassley (R-IA) and ranking member Ron Wyden (D-OR) led a bipartisan group of 23 committee members on September 11 urging HHS Secretary Alex Azar and CMS Administrator Seema Verma to require that health plans share DIR pharmacy fees with Medicare patients at the time they purchase drugs.



80% vs 18%


Nearly 80% of studies of medical interventions are randomized trials, but only 18% of studies of US healthcare policy are.

Source: “Which Health Policies Actually Work? We Rarely Find Out,” The New York Times,
September 9


AMCP Nexus 2019

October 29November 1 | National Harbor, MD
Xcenda and Dymaxium are proud to join managed care colleagues in National Harbor, MD for 4 days that spotlight the innovative practices currently impacting the managed care and healthcare community. Join us at booths #311 and #313. 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 | Jennifer Le | Reeya Patel | Scott Shields | Robin Tan


Laurie Kozbelt | Ellen Olson


Sept. 13, 2019


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