The Elijah E. Cummings Lower Drug Costs Now Act (HR 3) passed on a largely party-line vote of 230-192.

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Dec. 13, 2019

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FEATURED STORY
 

Like Sands Through an Hourglass…Legislative Efforts Unlikely To Go Anywhere

 
 

Three bills. Three trajectories…

HR 3:
After making a deal with the progressive wing of the Democratic Party on Tuesday, House Speaker Nancy Pelosi (D-CA) cleared the way for a vote yesterday on a sweeping bill that would empower Medicare to negotiate drug prices. The Elijah E. Cummings Lower Drug Costs Now Act (HR 3) passed on a largely party-line vote of 230-192, with all but 2 Republicans voting against it. Reps. Brian Fitzpatrick (R-PA) and Jaime Herrera Beutler (R-WA), both moderates who face competitive re-election races next year, broke ranks to vote in support of the bill.

Progressives had complained that the original bill did not provide the federal government with sufficient ability to control drug prices, so Speaker Pelosi agreed to a couple of changes to strengthen its authority. HR 3 would increase the minimum number of drugs whose prices would be negotiated by the federal government to 50, up from 25 in the original bill. The bill also now includes a provision that forces manufacturers to offer rebates to employer-sponsored health plans if they raise prices above the rate of inflation. (The previous version of the bill only required manufacturers to pay inflationary rebates to Medicare.)

In addition to those most recent changes, House Democratic leaders had previously changed the main cost-saving mechanism in the bill from arbitration to direct negotiation and also expanded negotiation-eligible drugs to include medications with 1 generic or biosimilar competitor. See the Legislative Updates for a discussion of the Congressional Budget Office’s (CBO’s) estimate of the budgetary impact of HR 3.

Senate Majority Leader Mitch McConnell (R-KY) has said the sweeping drug pricing bill will not get a vote in the Senate. On Tuesday, the White House stated that President Trump would veto Pelosi’s bill if Congress passed it, further dimming the measure’s prospects. But it will likely serve as a rallying cry for the November elections.

HR 19:
On Monday, Rep. Greg Walden (R-OR) introduced the Lower Costs, More Cures Act of 2019 (HR 19) as a countermeasure to HR 3 that Republican Whip Steve Scalise (LA) said—unlike Speaker Pelosi’s bill—“could be on President Trump’s desk today.”

HR 19 would create the role of a “chief pharmaceutical negotiator” at the Office of the United States Trade Representative to advocate on behalf of American patients in trade agreements with respect to prescription drug prices.

In addition, the bill seeks to limit annual out-of-pocket costs for Medicare beneficiaries at $3,100, caps the cost of insulin for seniors in the Medicare Part D program, requires insurers to make information about drug prices transparent at doctors’ offices so patients are apprised of the potential costs before a prescription is written, and streamlines the regulation of over-the-counter products.

Nevertheless, while HR 3 is DOA in the Senate, HR 19 will not even make it that far.

Senate Finance Committee’s Prescription Drug Pricing Reduction and Health and Human Services Improvements Act:
Last Friday, the Senate Finance Committee released a revamped version of its Prescription Drug Pricing Reduction and Health and Human Services Improvements Act that passed in July. The bill still caps beneficiaries’ Part D expenses at $3,100 and also attempts to control drug price increases in Medicare Part B and Part D by requiring additional rebates back to Medicare if manufacturers choose to increase their prices more rapidly than inflation.

The revised version updates the details of the Part D cost-sharing obligations (7% manufacturer discount during initial coverage phase; 14% manufacturer discount for catastrophic coverage, down from 20% in the original bill; 20% enrollee coinsurance during initial coverage, while current law is 25%). It also would permit some beneficiaries to spread out the costs of their medications throughout the year (“smoothing”), as HR 19 does. The bill now also uses the projected savings to provide funding for existing health programs.

White House officials support the Senate package, but rumors suggest Senate Majority Leader McConnell still remains opposed, and most Republicans on the committee voted against the package during the markup, primarily due to the inflationary rebate provisions. Therefore, its future in a Senate vote is unclear.

 
 

The Impact of Step-Therapy Policies on Patients

 
 

When payers insert themselves into the clinical decision-making process, it can diminish the trust and confidence patients have in their healthcare providers. 

Download this complimentary paper written by Xcenda in collaboration with Madelaine A. Feldman, MD, FACR, that explores the practice of step therapy and its impact on key stakeholders in the US healthcare system.

 

 

HPW Rebuild

 
LEGISLATIVE UPDATES
 

As the World Turns: Biologics Exclusivity Lost in Trade Deal

 
 

This Tuesday, the top officials of the US, Mexico, and Canada signed the revised United States-Mexico-Canada Agreement (USMCA) to replace the North American Free Trade Agreement (NAFTA). The original USMCA was signed last year but was not approved by Congress.

A fact sheet from the Democratic US House of Representatives summarized the main revisions to the USMCA in terms of enforcement, labor, environment, and prescription drugs. One major revision pertains to exclusivity for certain prescription drugs. In previous versions of the USMCA, there were calls for biologics to have 10 years of exclusivity, but it was a sticking point in the negotiations between the 3 countries and the Democrat-led House. In the new USMCA, drug makers will continue to receive only 5 years of protection in Mexico and 8 years of protection in Canada.

However, the pharmaceutical industry disagrees. In a statement released by Stephen Ubl, President and CEO of PhRMA, “…Eliminating the biologics provision in the USMCA removes vital protections for innovators while doing nothing to help US patients afford their medicines or access future treatments and cures. The only winners today are foreign governments who want to steal American intellectual property and free ride on America’s global leadership in biopharmaceutical research and development....”

With the competing impeachment proceedings, it is unlikely the USMCA will get through Congress before the end of the year. The Senate is likely to take it up after completing the impeachment trial in January, Majority Leader McConnell said.

 

Which Do You Use as Your Guiding Light? Competing Analyses on Drug Pricing Bill

 
 

On Tuesday, the CBO released its full analysis and budgetary effects of HR 3, the Elijah E. Cummings Lower Drug Costs Now Act; the bill is discussed in the Featured Article. The CBO previously released a partial score of Pelosi’s drug pricing plan in October, focusing on the impact of direct government price negotiations as presented in the plan. The completed analysis estimates enacting HR 3 would increase spending by $40 billion and increase revenues by $46 billion over a 10-year period.

The analysis also estimates the largest impact on spending would come specifically from 2 provisions of the plan: direct government price negotiations that would lower spending by $456 billion; and providing dental, vision, and hearing coverage under Medicare that would increase spending by $358 billion over the next 10 years.

Opponents of the bill, including the Trump Administration, criticize the plan for threatening medical innovation and access to new therapies for patients. The CBO estimates the bill would decrease revenues by $500 billion to $1 trillion for pharmaceutical manufacturers, with subsequent less investment in research and development. As a result, the CBO’s estimates there would be 8 fewer drugs introduced to the US market over the 2020–2029 period and about 30 fewer drugs over the following decade.

In a contrasting analysis posted last week by the White House, the Council of Economic Advisers estimates the impact of HR 3 on drug innovation would be far greater, with as many as 100 fewer drugs entering the US market over the next decade and worse health outcomes for the US population.

As discussed in the Featured Article, HR 3 is unlikely to become law—at least in this Congress. Nevertheless, the contrasting viewpoints make for ready-made campaign talking points.

 

Legislative Byte

 
 

HPW Rebuild

 
THE VALUE CORNER
 

It Isn’t Just the Young and the Restless That Should Count in VAFs

 
 

On Monday, the Institute for Clinical and Economic Review (ICER) announced the publication of its Final Evidence Report and Report-at-a-Glance assessing RYBELSUS (oral semaglutide) for the treatment of type 2 diabetes mellitus (T2DM). Members of the New England Comparative Effectiveness Public Advisory Council (CEPAC) voted unanimously that adding RYBELSUS to ongoing metformin background therapy provides a superior net health benefit relative to JANUVIA (sitagliptin). However, there was insufficient evidence to distinguish the net health benefit of RYBELSUS from JARDIANCE (empagliflozin), and results comparing VICTOZA (liraglutide) to RYBELSUS were promising but inconclusive. The panel also concluded that, compared to background therapy alone, RYBELSUS provides an “intermediate” long-term value for money. Its annual estimated net price also falls within ICER’s value-based price benchmark range of $6,000–$6,400 per year, which reflects ICER’s cost-effectiveness threshold range of $100,000–$150,000 per quality-adjusted life-year (QALY); it is unlikely to reach commonly cited thresholds compared to JARDIANCE, however.

On Tuesday, the National Pharmaceutical Council posted an interview with Sue Peschin, President and CEO of the Alliance for Aging Research, regarding the need to consider the preferences of older patients in value assessments. Ms. Peschin discusses her concerns around existing value assessment frameworks (VAFs) and how they fail to adequately capture the unique choices facing geriatric patients with multiple comorbidities, as well as their use of QALYs to evaluate treatments for older populations.

Also on Tuesday, the Innovation and Value Initiative (IVI) announced the publication of a research brief titled, “Aligning Value Assessment With Treatment in Chronic Disease,” which was prompted by the release of ICER’s final Evidence Report evaluating Janus kinase (JAK) inhibitors for the treatment of rheumatoid arthritis. 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.

On Monday, Advisory Board published an opinion article describing ICER’s growing influence and how ICER has started a national conversation among manufacturers, payers, providers, and patients about how value is defined and measured in the US. The authors note several limitations of ICER’s assessments, such as how ICER infrequently assesses the value or cost-effectiveness of a treatment for patient subpopulations outside of narrowly defined clinical indicators, which has caused some backlash from patient organizations.

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

HPW Rebuild

 
REGULATORY UPDATES
 

But What Is the Spending at General Hospital? NHE Data Released

 
 

National healthcare expenditure (NHE) data published last week by the Centers for Medicare & Medicaid Services (CMS) found spending increased 4.6% (0.4% more than in 2017), reaching $3.6 trillion, or $11,172 per person in 2018. However, due to the 5.4% overall economic growth in the country, the percentage of the overall share of gross domestic product (GDP) related to healthcare spending decreased from 17.9% in 2017 to 17.7% in 2018.

The number of prescriptions dispensed (based on 30-days’ supply) increased 2.7% in 2018, vs 1.8% in 2017. Retail prices declined by 1%, reflecting a drop in generic prices and slower and relatively low growth in prices of brand drugs. Brand drugs increased their share of spending from 76.7% to 78.7%.

Other key findings from the report:

Healthcare expenditures back to 1960 are published on CMS’ website and updated annually.

Though the slower rate of growth compared to the economy writ large is somewhat encouraging, the faster growth of Medicare spending (6.4% in 2018 compared to 4.2% in 2017) is troubling for policymakers. The stresses on the Medicare program will only increase as more Americans become eligible. The much talked-about shift to value-based care will need to dramatically increase before spending gets too top heavy due to Medicare.

 

We’re All in Each Other’s Lives, Whether We Like It or Not.
Somehow I Think That We Do Like It: The Dynasty of the ACA

 
 

On Tuesday, the US Supreme Court heard another case regarding the Affordable Care Act (ACA). More than $12 billion is at stake for the nation’s health insurers as the High Court hears 4 combined suits from Moda Health Plan of Oregon, Maine Community Health Options, Blue Cross Blue Shield of North Carolina, and Land of Lincoln Mutual Health Insurance, a now-defunct plan from Illinois. The case revolves around the risk-corridor program, a temporary ACA provision designed to help health plans recover some losses in the first 3 years of the health exchanges, and the federal government’s decision not to pay out on that program.

Health plans claim they took a chance on the new exchange marketplaces, where they had little knowledge of how sick or expensive new enrollees would be, and counted on the risk-corridor funding to help counter the losses. However, in a budget bill signed by President Obama in December 2014, the Republican-controlled Congress took most of the money out of the program. The Obama Administration told insurers it would make up the difference with funds from the CMS budget, a decision supported by the General Accountability Office. The Trump Administration has argued the federal government never had the power under the law to make the payments out of the CMS budget. In response, insurers are suing for those unpaid funds and saying if they are not paid, private business will not be able to trust the federal government as a reliable partner even if there is a statutory promise.

An interesting switch in its normal stance is the US Chamber of Commerce defending the risk-corridor provision. The Chamber, which has historically been a leading opponent of the ACA and has spent millions of dollars for almost a decade fighting to overturn the law, in support of insurers said, “If allowed to stand, the decision will chill the business community from working with the federal government in the future.”

A ruling is expected by the end of the Court’s term in June 2020.

The Court’s decision could also impact the industry’s argument in a separate ACA lawsuit for $2.3 billion in unpaid “cost-sharing reduction” payments the Trump Administration stopped making in 2017. That case is currently working its way through the lower courts.

 

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:

  • Last Friday, the Food and Drug Administration (FDA) approved Amgen’s AVSOLA (infliximab-axxq), a biosimilar to Janssen’s REMICADE. AVSOLA has the same approved-indications label as its reference product. AVSOLA is the third biosimilar to REMICADE to receive FDA approval, after INFLECTRA and RENFLEXIS, and the 26th FDA-approved biosimilar overall.
  • The Medicaid and CHIP Payment and Access Commission (MACPAC) posted the agenda for its December 12 and 13 meeting.
  • A Duke Margolis Center for Health Policy report explored how Medicare Advantage plans have new flexibilities to offer supplemental benefits that support members’ broader health needs. The report found that, in the first 2 years, only a small number of plans offered new benefits, in large part due to the time it takes to design and implement a new supplemental benefit.


 
OPEN ENROLLMENT BY THE NUMBERS

It’s that time again...open enrollment for the insurance exchanges. As we have done each year, we will compare weekly enrollment in the current and previous years for the 38 states that use the HealthCare.gov platform for the 2020 benefit year, including the federally facilitated exchanges, state partnership exchanges, and some state-based exchanges.

 Comparison of 2019 and 2020 Weekly Open Enrollment Snapshots for HealthCare.gov

 

 

 
HEARD ON THE STREET
 

“The only thing that makes me think that transparency might reduce costs is hospital opposition to it.”

 – Farzad Mostashari, MD, Aledade co-founder and CEO, speaking at Forbes’ 2019 Healthcare Summit

Source: “CMS Administrator Seema Verma Scoffs at Hospital Execs’ Arguments Against Transparency,” Forbes, December 6

 
POLICY BY NUMBERS
 

76%

 

In a survey of nearly 2,000 registered votes, over three-quarters are concerned after hearing that HR 3 (discussed in the Featured Article and Legislative Updates) could mean the loss of at least 8 to 15 new medicines over the next 10 years, as projected by the CBO.

Source: “New Poll: 76% of Voters Concerned Speaker Pelosi’s Plan Would Result in Fewer New Medicines,” PhRMA, December 5

 

Xcenda Wins “Audience Favorite” at First Annual HEOR / RWE Innovation Webinar Series

 
 

Xcenda’s Marlo Blazer, PharmD, BCOP, and Erika Wissinger, PhD, took part in HealthEconomics.com’s First Annual HE Innovation Webinar Series—Part II where they presented 2 of Xcenda’s innovations, MetaMap Pro and Virtual Tumor Cases, in a pitch titled, “One Size Doesn’t Fit All: Conquering Hurdles to Patient Access in a Precision-Medicine World.”

Xcenda was named “Audience Favorite” in a live polling session during the webinar. 

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:

Dan Cadle | Jennifer Le | Reeya Patel | Scott Shields | Diane Smith | Robin Tan

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Tia O’Brien

 

Dec. 13, 2019

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