Trump Administration announces plan to allow importation.

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Dec. 20, 2019

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Editor’s Note: Little full, a lot of sap this time of year. We appreciate you hanging in there with us. If we woke up tomorrow with our heads sewn to the carpet, we wouldn’t be more surprised than we are right now with all the support we get.

Wishing you all the hap-hap-happiest holidays, and see you back on the 10th. Unless something big happens that pushes us off our sofas and into our offices.

 
FEATURED STORY
 

The Wait for the Importation Proposal Is Over: Hallelujah! Holy Cow!
Where’s the Tylenol?*

 
 

On Wednesday, the Department of Health and Human Services (HHS) announced a proposal to allow importation of certain prescription drugs from Canada. This is a step advancing the “safe importation plan” announced by the Trump Administration in July to allow states and manufacturers to import lower-cost prescription drugs from foreign countries.

HHS Secretary Alex Azar noted, “[T]he announcement outlines 2 pathways for the safe importation of prescription drugs—sketched in the Administration’s “safe importation plan” earlier this year—to help provide more affordable medications to American patients. The President has recognized the opportunity to lower costs for American patients through safe importation, and we at HHS and FDA [Food and Drug Administration] are delivering on that possibility through a safe, commonsense approach.” The proposed rule, Pathway 1, applies to drugs that meet FDA labeling standards. Pathway 2, the FDA guidance, allows the assignment of new National Drug Codes (NDCs) so manufacturers could offer the imported drug at a lower price.

Pathway 1 would allow states to import certain prescription drugs from Canada under specific conditions that ensure the importation is cost-effective and safe for American consumers. The proposal expressly excludes from importation eligibility controlled substances, biological products, intravenous drugs, and products subject to the FDA’s Risk Evaluation and Mitigation Strategy (REMS) program. The proposal would allow states and certain other non-federal government entities to submit importation program proposals, which can be co-sponsored by a pharmacist, a wholesaler, or another state or non-federal governmental entity, to the FDA. Eligible prescription drugs would require US labeling prior to importation and undergo testing for authenticity and degradation to ensure the drugs meet established standards, along with demonstrating significant cost reductions.

The new draft guidance for industry, or Pathway 2, would help facilitate importation of FDA-approved prescription drugs, such as biologics, that are manufactured abroad and intended for sale in a foreign country. The guidance does not apply to generic drugs. The Administration is soliciting comments on whether the guidance should be extended to generic drug manufacturers.

Comments on the proposed rule will be accepted until March 7, 2020, and comments on the draft guidance are due February 21, 2020.

Experts have questioned the ability of importing drugs from Canada to lower drug costs for Americans, as our neighbor to the north has about a tenth of the US population and does not import enough drugs to make a material impact on US demand. Additionally, Canadian officials are not wedded to the idea of becoming a drug supplier to the US for a myriad of reasons, not the least of which is concern about drug shortages.

*Yes. Yes, we know this isn’t 100% correct. But even we recognize that this is a professional publication. We all have bosses.

 
 

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
 

Where Do You Think You’re Going? Nobody’s Leaving…Oh Wait. They Are.
Congress Passes Spending Before Break

 
 

This week, Congress passed a domestic spending package, sending the legislation to the President for his expected signature before government funding expires at midnight tonight.

The bill includes a $426 billion tax cut plan that would permanently repeal 3 major health industry taxes levied to help pay for the Affordable Care Act (ACA): the 40% “Cadillac” tax on the most generous employer-provided health insurance plans, the 2.3% excise tax on medical devices, and the health insurance tax on issuers.

The spending package also includes the Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act, which would allow a biosimilar or generic developer to bring a civil action against an innovator drug company if the latter refuses to make available sufficient samples of a product for testing. It would also empower the FDA to approve alternative REMS programs if a generic or biosimilar developer and the innovator company are unable to arrive at a single shared system.

Despite spending the majority of the past 2 years debating how to confront drug prices and “surprise” medical bills, Congress largely punted on those heretofore “critical” topics. There remains the possibility of attaching either effort to legislation in May.

The combination of removing taxes on health industries, coupled with the inability to agree on drug pricing and—especially—surprise medical bills, shows that Congress may be bitterly opposed ideologically but still maintains a lack of discipline in budgeting and allowing industry divisions and fierce lobbying to leave patients with high healthcare costs. (I’m looking at you, surprise medical bills.)

 

Legislative Bytes

 
 
  • Sen. Chuck Grassley (R-IA) introduced S 3078 that would improve the efficiency of the Medicare appeals process.
  • Rep. Lauren Underwood (D-IL) introduced HR 5444 that would streamline the transition of certain products from approval as a drug to licensure as a biological product.
  • Rep. Katie Porter (D-CA) introduced HR 5442 that would require pharmacies to disclose the cost differential of a prescription drug based on whether individuals use prescription drug coverage.

HPW Rebuild

 
THE VALUE CORNER
 

Patient Engagement in Value:
Do You Think They Want to Know if Squirrels Are High in Cholesterol?

 
 

In the December issue of the American Journal of Managed Care monthly newsletter, a featured article written by Charles Phelphs, PhD, focuses on utilizing multi-criteria decision analysis (MCDA) for health technology assessments (HTAs). The article highlights barriers to MCDA use, such as the need for too many data and complicated methodology, and provides suggestions for expanding the use of MCDA. Dr. Phelps posits that expanding MCDA use will require additional training on MCDA methods, consensus regarding core attributes to drive data-gathering efforts, software that is more user-friendly to make group decisions, and simplified methods for individual patient use.

Last Thursday, an article titled, “Resolving Tension Between Cost-Effectiveness Analysis and Patient Centricity” was published in Forbes Magazine. The author notes that patient centricity is an important aspect to incorporate into evidence-based value frameworks, which serve to inform healthcare decision makers, and that these frameworks should utilize cost-effectiveness models that adjust for patient outcomes.

Last Friday, the National Pharmaceutical Council (NPC) published its response to the Institute for Clinical and Economic Review’s (ICER) call for public input on the selection of non-drug assessment topics for 2020. NPC recommended the following topics for ICER’s consideration: 1) excision surgery for the treatment of endometriosis vs drug therapy; 2) robotic approaches to surgical interventions; and 3) coronary artery bypass surgery or stents vs drug therapy. NPC also called for ICER to become involved in identifying areas where low-value care exists and recognizing where there are opportunities to reduce or eliminate non-drug health spending.

Recently, BioPharma Dive published an article on how pharmaceutical manufacturers believe current approaches to value-based pricing for gene therapies are inadequate with regard to hemophilia gene therapies due to the enormous long-term savings they provide, which are predicted to be between $90 million and $114 million per patient. Matt Kapusta, CEO of UniQure, considers a one-time pricing agreement with manufacturers to be a simpler option for hemophilia gene therapies compared to yearly value-based payments, particularly given their relative long-term cost-effectiveness.

The Value Corner team wishes everyone a wonderful holiday season and Happy New Year! As always, if you need assistance with all things ICER or value-related, please contact Kristen.Migliaccio@xcenda.com.

HPW Rebuild

 
REGULATORY UPDATES
 

Instead of a Mandate, Could We Catch Them in a Coat and Hit Them With a Hammer to Get Them to Enroll?

 
 

On Wednesday, a 3-judge panel of a federal appeals court struck down as unconstitutional the “individual mandate” in the ACA that required non-exempt Americans to carry health insurance or pay a tax penalty. The ruling weakens one of the health law’s key components but does not completely invalidate the rest of the law.

A central question in the case was whether the “individual mandate” became unconstitutional after Congress reduced the tax penalty to zero dollars in 2017. The appeals panel referred the case back to a federal district judge in Texas for additional review and consideration of the severability of the individual mandate, after the lower court had ruled to throw out the entire law.

The 2-1 decision, by a panel of the US Court of Appeals for the Fifth Circuit in New Orleans, leaves the fate of the law in limbo, creating uncertainty when access to healthcare is at the forefront of the 2020 Presidential campaign.

The appellate court ruling comes nearly a year after Judge Reed O’Connor of the Federal District Court in Fort Worth struck down the entire law. The lower court ruling determined that the individual mandate could not be severed from the rest of the ACA because it was essential to the regulation of the health insurance market.

Democratic-led states heading the legal defense of the ACA said they would challenge the appeals court ruling directly to the Supreme Court. It is unlikely the law’s fate will be resolved before the 2020 election; the continuing battle over the health law will undoubtedly serve to inspire both sides.

 

Better Than Jelly of the Month Club:
Financial Risk-Sharing Could Be Gift That Keeps on Giving (or Taking) for 5 Years

 
 

Last week, Blue Cross Blue Shield of Michigan (BCBSM) announced it will roll out its first financial risk-sharing model, Blueprint for Affordability, along with 7 partner organizations. This contracting model represents the next advance of its value-based reimbursement approach, as BCBSM and partners will pool financial risk and share in the financial loss or success of improved patient outcomes. The risk-sharing agreements will cover Blue Cross Commercial PPO and Medicare Advantage PPO plans, and they will remain in effect for 5 years beginning January 1, 2020.

Blueprint for Affordability operates based on a physician group’s ability to meet agreed-upon financial targets. If a physician group’s expenses are below financial targets, the group will be rewarded with a share of the cost savings accrued. If the physician group exceeds the financial target, it will be responsible for rebating to BCBSM a portion of the overage.

The goal of the Blueprint for Affordability model is to stabilize BCBSM members’ healthcare costs—and to improve the quality of care they receive. BCBSM believes the plan will achieve this goal by incentivizing provider organizations to avoid unnecessary tests and scans and to reduce emergency room visits, rehospitalizations, and complications.

The financial structure of the model resembles the 2-sided version of the Medicare Shared Savings Program. Critical to the success of Blueprint for Affordability, from the patient perspective, will be the commitment of the payer and providers to improving quality of care, as it is relatively easy to lower costs by sacrificing quality—which doomed the capitation movement in the 1990s.

 

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
 

“Separately and together, these laws impose nationwide restraints on the list price of biopharmaceutical manufacturers’ products and intentionally bind every other state in the nation to Oregon’s policy choices regarding prescription drug pricing. The laws also compel pharmaceutical manufacturers to turn over a host of competitively sensitive, trade-secret information—including manufacturers’ reasons for price increases—and then threaten to disclose that sensitive information to the public.”

 – Attorneys for PhRMA, which has initiated litigation against Oregon by challenging the state’s Disclosure and Advance Notification laws as unconstitutional

Source: “Complaint for Declaratory and Injunctive Relief,” PhRMA, December 9

 
POLICY BY NUMBERS
 

81 Days

 

The Kaiser Family Foundation (KFF) has estimated the time of year when the average person with employer coverage satisfies their deductible, and how the date has changed over time. KFF uses this as a proxy for understanding how deductibles are rising. This year, “Deductible Relief Day”—the day when enrollees have, on average, incurred enough health spending to hit the average deductible in an employer plan—will fall on May 19. That is 81 days, or almost 3 months, later than when it first started tracking it in 2006.

Source: “Deductible Relief Day: How Rising Deductibles Are Affecting People With Employer Coverage,” KFF, May 15

 

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:

Anuja Kanaskar | Aishani Patel | Scott Shields | Aileen Soper | Ryan Sullivan

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

Dec. 20, 2019

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