CMS released its Medicaid block grant proposal, “Healthy Adult Opportunity.”

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Jan. 31, 2020


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Potential for (I)PI Flags To Be Thrown Today


Rumors are flying around that the proposed rule for the potential International Price Index (IPI) will be released today. If it is, we plan to review it well in advance of the Super Bowl so our copies aren’t smeared with chicken fingers and bleu cheese.


A Political Football: If It Looks Like a Block Grant and Acts Like a Block Grant…


On Thursday, the Centers for Medicare & Medicaid Services (CMS) announced an optional Medicaid demonstration for states called the Healthy Adult Opportunity. The demonstration would allow states to shape their benefits for Medicaid beneficiaries under age 65 who are not disabled by giving the states a capped amount of funding and additional flexibilities in what benefits must be offered. This capped dollar approach is traditionally referred to as a block grant. Additional information on the waiver was also released in a letter to State Medicaid Directors.

One notable change is that states could apply to restrict drug coverage through closed formularies provided they meet essential health benefit requirements. Typically, states are required to cover all Food and Drug Administration (FDA)-approved drugs and, in exchange, receive significant discounts from pharmaceutical manufacturers. In the waiver, states would still receive the Medicaid discounts and rebates, and could work to negotiate lower prices with manufacturers. This is in stark contrast to CMS’ denial of Massachusetts’ waiver request in 2018, where CMS said Massachusetts would have to forgo mandatory manufacturer rebates if it had a limited formulary.

States would also be able to charge “nominal” premiums for coverage and apply additional conditions of eligibility, such as community engagement requirements for beneficiaries who are eligible for Medicaid on a basis other than disability.

While there is considerable flexibility being offered to states participating in this demonstration, the Administration is hoping to balance this with accountability through measurement and evaluation. The road ahead for this program is likely filled with speed bumps such as legal challenges and approval processes, but the Administration has said it will work to make available a template application to facilitate the application and approval process. It is likely movement forward will be based on party lines. Many state officials, like Gov. Jay Inslee of Washington State, have already indicated they are not interested.


Xcenda’s MCN Forum in Houston: Your Path to Payer Market Insights


MCN Forum | Tuesday, April 21 | Houston, TX

Looking for payer input to refine your clinical, market access, and/or health economic and outcomes research plans?

Xcenda is hosting a 1-day event in Houston, TX on April 21. Learn more about the Managed Care Network (MCN) Forum.

Learn more >

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Still at First Down, 10 to Go: House Republicans Try to Advance Part D Legislation


On Tuesday, the Ways and Means Committee Republican Leader Kevin Brady (R-TX) and Energy and Commerce Committee Republican Leader Greg Walden (R-OR) issued a letter to Democratic Chairmen Richard Neal (D-MA) and Frank Pallone Jr. (D-NJ) of the respective committees. The letter urges the Chairmen to re-engage in bipartisan discussions and work toward creating savings in the Medicare Part D program to provide “needed relief to seniors.”

Earlier in 2019, the committees were in the process of negotiating agreements to redesign the Part D benefit structure. However, these negotiations were halted at the introduction of the Elijah E. Cummings Lower Drug Costs Now Act (HR 3).

The Chairmen’s letter specifically calls out the negative impact HR 3 would have on the development of new drugs and small biopharmaceutical manufacturers. In contrast to the partisan bill introduced by Nancy Pelosi, the GOP Chairmen express that The Lower Cost, More Cures Act (HR 19) (introduced by Brady, Walden, and other GOP representatives) is “the only bipartisan, bicameral legislation in Congress to lower drug costs for Americans.”

The letter highlights 3 specific areas where HR 3, HR19, and other bills introduced show an opportunity to reach bipartisan agreement:

  • Creating an out-of-pocket (OOP) cap once beneficiaries reach the catastrophic phase
  • Dividing the financial burden after beneficiaries reach the cap across the entire plan year
  • Shifting the financial liability from the government to insurers and manufacturers by changing the incentives to manage costs

The issues of high prescription drug prices and federal spending on drugs have been at the forefront of policymaking, bicameral negotiations, and bipartisan discussions during this Administration. Neal and Pallone have not responded to the GOP Chairmen’s letter, and it is doubtful bipartisan legislation will be achieved on such a contentious issue during an election year.


Legislative Byte

  • Illinois Gov. JB Pritzker (D) signed SB 667 into law, capping OOP insulin costs at $100 for a 30-day supply.

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Keeping an Eye on the Ball: Value Round-up


Last Thursday, the Institute for Clinical and Economic Review (ICER) announced the release of its Draft Evidence Report evaluating ADAKVEO (crizanlizumab), OXBRYTA (voxelotor), and ENDARI (L-glutamine) for the treatment of sickle cell disease. OXBRYTA and ADAKVEO were recently approved by the FDA in November 2019, and ENDARI was approved in 2017. ICER is accepting public comments on this document until February 20, and the revised report will be reviewed by the New England Comparative Effectiveness Public Advisory Council (CEPAC) on March 26.

Last Friday, ICER announced the publication of its Draft Scoping Document assessing HEMLIBRA (emicizumab) and valoctocogene roxaparvovec for the treatment of hemophilia A. HEMLIBRA was approved by the FDA in October 2018, and valoctocogene roxaparvovec is a gene therapy currently under FDA review. The evaluation is an update of ICER’s April 2018 report and will examine any new data that have become available for HEMLIBRA. ICER plans to compare the interventions to each other and to prophylaxis with factor VIII preparations. Stakeholder comments on this document are being accepted through February 13, and the final assessment will be discussed during a public meeting of the New England CEPAC in August.

On Monday, the Chain Drug Review published an op-ed written by Dan Leonard, President and CEO of the National Pharmaceutical Council (NPC), describing his wish list for the healthcare sector in 2020. He argues that although the cost of care has been the focus of intense national discussion, it is more important to focus on maximizing value. While acknowledging there are challenges associated with determining the appropriate value of healthcare interventions, Mr. Leonard maintains that value assessment frameworks in the US are still evolving and that a variety of perspectives is needed to make optimal decisions.

If you need assistance with all things ICER or value-related, please contact Linnea Tennant.

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Tackling Personalized Medicine: CMS NCD on NGS for Ovarian and Breast Cancer


On Monday, CMS released a final decision memo expanding Medicare coverage of Next Generation Sequencing (NGS) as a diagnostic tool for patients with breast and ovarian cancer. CMS finalized coverage of NGS testing for patients with advanced cancers (recurrent, relapsed or refractory, metastatic, or advanced stage III or IV) back in March 2018. This National Coverage Determination (NCD) comes after a 30-day comment period on a proposal to expand NGS tests for ovarian and breast cancer, where CMS received 43 comment letters.

In the announcement, CMS states NGS is reasonable, necessary, and covered nationally when an ovarian or breast cancer patient has a clinical indication for germline testing, has risk factors for inherited breast or ovarian cancer, and has not been previously tested. CMS also outlines that the diagnostic laboratory test using NGS must be performed in a Clinical Laboratory Improvement Amendments (CLIA)-certified laboratory and have FDA approval. The NCD also allows Medicare administrative contractors more flexibility in determining coverage of NGS as a diagnostic laboratory tool for cancer diagnoses other than breast and ovarian.

By broadening Medicare coverage of NGS, CMS is increasing access to NGS laboratory diagnostic tools that offer the ability to help clinicians identify specific mutations in cancer patients and provide more personalized options in selecting the best course of targeted treatment for patients. However, CMS’ requirement for the diagnostic tool to be FDA-approved may limit access to NGS; currently, there is only 1 FDA-approved NGS diagnostic test on the market: FoundationOne CDx. Nevertheless, this market should open up now that CMS has outlined clear coverage parameters.


Using the Democratic Playbook: Bloomberg Drug Plan


Former New York City Mayor Mike Bloomberg, running as a Democratic candidate in the 2020 presidential election, has published his action plan to lower prescription drug costs. Bloomberg proposes 3 core strategies for reducing prescription drug costs:

  1. Increase competition by allowing the import of pharmaceuticals from other countries (provided they have satisfactory drug quality controls in place), revoke safe harbor protections between manufacturers and pharmacy benefit managers (PBMs), and allow Medicare to negotiate prescription drug prices and make the negotiated price public.
  2. Lower prescription drug costs for seniors by instituting a $2,000 annual OOP drug spending cap for all Medicare beneficiaries and reducing premiums and copay costs for beneficiaries by requiring Medicare Part D health plans to promote the most cost-effective drugs.
  3. Reduce branded drug protection and increase research funding by allowing only 1 20-year patent for branded drugs and by requiring pharmaceutical companies to pay royalties to the National Institutes of Health (NIH) if NIH intellectual property is used in the development of a successful commercial drug.

Many of Bloomberg’s proposed policy changes are similar—if not identical—to those of other Democratic candidates, as well as the Elijah E. Cummings Lower Drug Costs Now Act (HR 3) proposed by House Democrats and still mired in that chamber. The restructuring of Part D is also similar to what Republicans have proposed and probably stands the best chance of finding its way into law, regardless of Bloomberg’s political future.


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:


Have Questions on the Impact of AMCP Format v4.1?
Xcenda Has Answers.


The Academy of Managed Care Pharmacy (AMCP) released its new Format for Formulary Submissions (Version 4.1). The Format provides updated guidance on the evidence and information exchange between industry and payers for unapproved products and for new indications under US FDA review for approved products. It is anticipated these changes will impact the content manufacturers can share and the method by which they will provide this kind of preapproval information.

Xcenda and the FormularyDecisions team closely tracked the development of the new Format and are available to address questions and provide additional guidance surrounding these updates.

Turn to us to help align your organization’s information dissemination process with payers according to the new Format.

Contact us today >


“I may touch a third rail here. I think part of the problem is that the federal government has not been able to negotiate under certain parts of Medicare and Medicaid for pharmaceutical prices….

“The federal government, which accounts for I think a third of pharmaceutical spending, is essentially a price-taker, and that seems like a problem to me.”

 – Christine Wilson (R), Federal Trade Commission member

Source: “3rd Annual Price of Good Health Summit,” Council for Affordable Health Coverage, January 16




A report from the Council for Affordable Quality Healthcare (CAQH) finds 33% of healthcare administrative spending can be saved annually through automation.

Source: “Conducting Electronic Business Transactions: Why Greater Harmonization Across the Industry Is Needed,” CAQH, January 21


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


Anne Loos | Reeya Patel | Scott Shields | Jennifer Snow | Ryan Sullivan


Laurie Kozbelt | Ellen Olson


Jan. 31, 2020


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