We take a closer look at Speaker Pelosi’s plan for lower drug prices.

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Sept. 20, 2019

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FEATURED STORY
 

Like When You Watch the Olympics and Think, Yeah I Could Do That:
House-Proposed Drug Bill Could Normalize Drug Pricing Proposals

 
 

On Thursday, House Speaker Nancy Pelosi (D-CA) introduced HR 3, the Lower Drug Costs Now Act of 2019, to reduce the cost of prescription drugs. The bill was slightly different from the draft plan leaked last week. Markedly absent from this bill were the other major stakeholders included in the healthcare system—the plans and the pharmacy benefit managers.

HR 3 would:

  • Allow the federal government to directly negotiate the prices of a minimum of 25 and up to 250 drugs, without generic or biosimilar competition, representing the greatest total cost to Medicare and the healthcare system; these prices would be extended to all purchasers, not just Medicare
  • Require that negotiated prices would not exceed more than 120% of an average international market price (AIM), which would be calculated at the weighted average price in 6 countries: Australia, Canada, France, Germany, Japan, and the United Kingdom
  • Impose an escalating penalty for pharmaceutical companies that refuse to participate in the negotiation or do not reach agreement—a stiff 65% tax on the drug’s gross sales, increasing by 10% every quarter the manufacturer is out of compliance, to a maximum of 95%
  • Restrict price increases to the rate of inflation, with a lookback to 2016. Manufacturers could either lower their price or pay the difference to the federal government as a rebate
  • Cap Part D beneficiary out-of-pocket costs at $2,000 per year after reaching the catastrophic phase

The House Committee on Energy and Commerce announced a hearing on the bill for next Wednesday, and the House Ways and Means and the Education and Labor Committees are expected to hold hearings as well.

House Republicans immediately criticized Pelosi’s bill, calling it “a socialist proposal to appease her most extreme members.” Progressives have criticized the plan for being too narrow.

Meantime, we continue to await the legislative text and Congressional Budget Office score of the Senate Finance Committee’s Prescription Drug Pricing Reduction Act of 2019 (PDPRA) (passed out of committee in July), which shares in concept establishment of inflationary caps on Medicare Parts B and D drug price increases and capping Part D out-of-pocket spending. Of note, the plan continues to face opposition from Senate Republicans.

Late yesterday, President Trump weighed in on Speaker Pelosi’s plan, tweeting, “Because of my Administration, drug prices are down for the first time in almost 50 years—but the American people need Congress to help. I like Sen. Grassley’s drug pricing bill very much, and it’s great to see Speaker Pelosi’s bill today. Let’s get it done in a bipartisan way!”

Democrats aim to put a drug pricing package on the House floor this fall, pressuring Republicans to take a challenging vote on an issue that ranks among voters’ top healthcare concerns.

 
 

Pre-Approval Information: A 360-Degree View of Dossiers for Payers and Manufacturers

 
 

Live Webinar
Tuesday, October 1, 2019 | 2:00–3:00 PM ET

Gain insights around the evolution of the pre-approval information exchange between manufacturers and payers.

Join Xcenda’s Evelyn Sarnes for a live webinar that will present diverse perspectives from stakeholders as well as insights collected via the FormularyDecisions.com community—home of the AMCP eDossier System.

Register now >

 

 

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LEGISLATIVE UPDATE
 

Legislative Byte

 
 

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THE VALUE CORNER
 

Value Round-Up: Sometimes Glitter Turns Out To Be Gold

 
 

On Tuesday, the Institute for Clinical and Economic Review (ICER) hosted a live webinar with invited US and global stakeholders to provide input on its proposed changes to its value assessment framework (VAF) to be applied in the assessment of potential curative and other treatments that are defined as “single or short-term transformative therapies (SSTs).” These adaptations are part of ICER’s “Valuing A Cure” Initiative, a year-long project to develop, test, and build consensus around methodological options for determining value-based prices for potential cures.

Key points discussed during the webinar include:

  • Accurately capturing uncertainty in economic evaluations and within ICER’s VAF
  • Re-evaluating the definition of SSTs
  • Exploring novel methodologies that may be utilized when conducting probabilistic sensitivity analyses and cost-acceptability curves
  • Incorporating additional elements of value in economic evaluations and within ICER’s VAF

ICER plans to publish a white paper with its final methodology for assessing SSTs on November 15, which will include, where appropriate, some recommendations that also apply to ICER’s 2020 VAF update.

The National Comprehensive Cancer Network (NCCN) announced this week that it will host a Patient Advocacy Summit focusing on “highlight[ing] the patient perspective related to delivering value-based and high-quality cancer care, implications associated with the term ‘value,’ and the application of the value proposition within policymaking and clinical decision-making.” The summit will take place on December 11 in Washington, DC; registration is now open.

Earlier this month, the Innovation and Value Initiative (IVI) published a research brief titled, “The Impact of Structural Uncertainty on Cost-Effectiveness Estimates,” focusing on the impact of model design assumptions on cost-effectiveness estimates for the IVI-RA (rheumatoid arthritis) simulation model. The brief was published as part of IVI’s Value Blueprints series that explores insights from IVI’s Open-Source Value Project (OSVP). The OSVP fosters collaboration and advances the methods and practice of value assessment through iterative development of disease-specific economic models.

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

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REGULATORY UPDATES
 

Judge: Sites Not Neutral

 
 

Over the past few years, hospitals have been purchasing physician practices and converting them to off-campus provider departments, in part, to take advantage of being able to bill via the Medicare Outpatient Prospective Payment System (OPPS), which has much higher payment rates than the Medicare Physician Fee Schedule (MPFS). The OPPS final rule effective on January 1, 2019 implemented “site-neutral payment,” which lowered payment rates for certain services provided in off-campus, provider-based departments to the MPFS amounts.

On Tuesday, a federal judge ruled that the Centers for Medicare & Medicaid Services (CMS) was not authorized to lower those payments in the absence of a budget-neutral approach, which is how OPPS rates are derived. The American Hospital Association had estimated the site-neutral payment would cause hospitals to lose $380 million in 2019 and $760 million in 2020.

The judge wrote that, while vacating the rule, she would not require CMS to issue payments that were improperly withheld, citing case law that the rule must be remanded to the agency for further action. The parties will be required to submit a joint report by October 1, 2019 to determine future briefing or remedies required. The case was similar to last year’s ruling that the Administration could not reduce payments to hospitals for drugs purchased under the 340B program. The judge had ordered both parties to submit briefs about a proposed remedy.

The order for joint remediation mimics a similar court action this May, when a federal judge ordered the Department of Health and Human Services to come up with a remedial measure that would address hospital payment cuts under Medicare’s 340B drug discount program for 2018 and 2019, which the judge previously ruled were unlawful.

Perhaps CMS could incorporate site-neutrality payment in future rulemaking, which should put it on firmer legal ground. The Administration’s persistence with pursuing site-neutrality payment will be a good barometer about its willingness to go against the powerful hospital community.

 

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:



 
HEARD ON THE STREET
 

“As proposed, a single hypothesis is being tested: that a bonus-and-penalty payment adjustment to two types of providers will increase transplantation and home dialysis use. We think it is a mistake to bet everything on a single intervention covering the entire United States….”

– Hrant Jamgochian (Chief Executive Officer, Dialysis Patient Citizens), expressing concerns about the mandatory CMS End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model demonstration

Source: Comment on the CMS Proposed Rule: Medicare Program: Specialty Care Models to Improve Quality of Care and Reduce Expenditures, September 4

 
POLICY BY NUMBERS
 

67% vs 72%

 

In 2012, a majority of hospital markets (67%) were already considered highly or very highly concentrated. This number increased to 72% of metro areas by 2016. Increases in concentration levels were widespread, as over two-thirds of all metros’ hospital markets experienced increases over time.

Source: Healthy Marketplace Index, Health Care Cost Institute, September 17

 
UPCOMING MEETINGS & CONFERENCES
 

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.

 
 
 
 
 
FEATURED CONTRIBUTORS
 

EDITOR-IN-CHIEF:
Jennifer Snow
Vice President,
Reimbursement and
Policy Insights,
Xcenda

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

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

CONTRIBUTING AUTHORS:

Anuja Kanaskar | Jenna Kappel | Joaquin Zabalza Seguin | Scott Shields

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

Sept. 20, 2019

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