President Trump touts drug pricing accomplishments in SOTU.

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Feb. 7, 2020

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FEATURED STORY
 

Was Congress Like This in 1917? SOTU Highlights Trenches

 
 

As expected, on Tuesday night, President Donald Trump touted his Administration’s drug pricing accomplishments during the annual State of the Union Address (SOTU), highlighting a record number of generic drugs approved by the Food and Drug Administration (FDA) and stating “for the first time in 51 years, the cost of prescription drugs actually went down.” (A fact that the Kaiser Family Foundation was quick to dispute.)

President Trump also called on Congress to pass bipartisan legislation that “dramatically lowers prescription drug prices,” which elicited chants from Democratic lawmakers to pass Speaker Nancy Pelosi’s (D-CA) aggressive drug pricing bill, the Elijah E. Cummings Lower Drug Costs Now Act (HR 3). Though the President opposes HR 3, he did give a nod to Senate Finance Committee Chairman Chuck Grassley (R-IA) who continues to build support for his more measured drug pricing bill, the Prescription Drug Pricing Reduction Act of 2019 (S 2543).

Equally important to the life sciences industry was what President Trump omitted from his speech. Many expected he would reference his Administration’s International Pricing Index (IPI) or “most favored nations” models—policies that would dismantle the current Part B system and reduce reimbursement for a significant number of drugs by limiting payment to a benchmark price established by foreign countries. We keep expecting the Administration will release such a proposal soon (potentially to coincide with Trump’s budget proposal expected next week) to demonstrate clear progress on drug pricing.

Congress also anticipated Trump would reference IPI in his speech; on Monday, Reps. Terri Sewell (D-AL) and Adrian Smith (R-NE) introduced the Strengthening Innovation in Medicare and Medicaid Act (HR 5741) which would limit the Administration’s ability to implement mandatory, nationwide models like IPI. See the Legislative Update for a deeper dive into HR 5741.

The logical time for Congress to try to pass drug pricing legislation is by May 22, the impending deadline for several Medicare and tax extenders. It is unlikely a large bill will pass, but elements of these proposals may find a home in “must pass” legislation, so continuing to look at impacts of these bills is important.

 
 

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

 
 

MCN Forum | Tuesday, April 21 | Houston, TX

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LEGISLATIVE UPDATES
 

Once Upon a Time—in Congress

 
 

On Monday, 4 US Representatives introduced the Strengthening Innovation in Medicare and Medicaid Act (HR 5741). The bipartisan legislation attempts to increase transparency and accountability from the Center for Medicare and Medicaid Innovation (CMMI). CMMI develops, tests, and ultimately implements new payment models in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP), with the goal of reducing healthcare costs and improving outcomes.

HR 5741 aims to safeguard the intended function of CMMI through increased accountability, transparency, and healthcare quality for underserved groups. A second notable goal is to remove the ability of the executive branch to waive certain Medicare and Medicaid rules, without regard to the effect on healthcare delivery outcomes.

Under HR 5741, the Secretary of Health and Human Services (HHS) would be accountable for ensuring the development of a plan to track and monitor access to care and adverse impacts. In addition, the Secretary would be responsible for ensuring plans monitor the impact that payment and delivery models have on health disparities and for mitigating potential declines in access or quality of care.

The act aims to increase CMMI transparency by creating a mechanism for public input, with special regard to the establishment, testing, implementation, evaluation, and expansion of the model. HR 5741 also has a provision for the development of an expedited process for congressional disapprovals.

Finally, the act attempts to improve health outcomes and provide financial support for providers serving disadvantaged groups. To improve population health outcomes, CMMI would be required to consult experts in health management—particularly, for safety net, community based, rural, and critical access providers. At the practice level, HR 5741 provides hardship exemptions for providers and suppliers that service vulnerable populations.

Representatives who proposed the legislation posit that the additional controls and oversight would result in improved outcomes and reduced cost within the CMMI model. In a press release Monday, the Community Oncology Alliance commended the representatives who introduced the potential legislation, intimating that without its protections, government-mandated treatment models would limit oncologist autonomy to treat and would force cancer patients to participate in “cookbook” rather than personalized treatment. Since the Affordable Care Act’s enactment, there have been bipartisan concerns about CMMI’s authority and its ability to upend the healthcare system (often a mark of legislators, not regulators). Stakeholders are hopeful a Senate companion bill will be introduced so the legislation has a chance—albeit slim—to be included in the “must pass” extenders package in May.

 

Legislative Byte

 
 
  • Rep. Charlie Crist (D-FL) introduced the Affordable Insulin for All Act (HR 5749) that would establish the American Insulin Program to provide for lower prices for insulin drugs. Read the press release.

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THE VALUE CORNER
 

ICER and NPC Are Like Ford vs Ferrari

 
 

Last Friday, the Institute for Clinical and Economic Review (ICER) announced the publication of its finalized 2020–2023 Value Assessment Framework (VAF) methods and procedures update. A webinar by Steve Pearson, MD, MSc, the Founder and President of ICER, is now available and covers ICER’s current philosophy and key VAF updates. Below is a summary of the key updates and restatements of current VAF methods:

  • Augment efforts to use real-world evidence (RWE), including generation of RWE to complement existing data sources
  • Revise and expand its voting structure to capture important potential other benefits and contextual considerations
  • Add a section on heterogeneity and subgroups to highlight subpopulations in which a treatment may work best
  • Continue to use multiple measures to assess cost-effectiveness (ie, quality-adjusted life-year [QALY] and equal value of life-years gained [evLYG])
  • Report pricing benchmark results for common cost-effectiveness thresholds from $50,000 to $200,000 for all reports, including those for ultra-rare disorders
  • Promote a modified societal perspective by including a “co-base case” when the societal costs of care for any disease are large relative to the direct healthcare costs and the impact of treatment on these costs is substantial
  • Implement a formal process for reassessment of any new evidence 12 months after the release of Final Evidence Reports
  • Launch a formal Patient Engagement Program to increase patient involvement with ICER
  • Expand its evidence-rating categories to capture high certainty of at least a comparative net health benefit

The National Pharmaceutical Council (NPC) responded to ICER’s final VAF adaptions for 2020 by describing how ICER addressed the suggestions NPC made during the public comment period on the draft version. Specifically, NPC had commented on 3 important factors for ICER to consider, including incorporating a societal perspective in ICER’s base cases, evaluating non-drug topics, and replacing or augmenting the QALY. NPC acknowledged that incorporation of a societal “co-base case” in ICER’s 2020 VAF update may offer a better understanding of the full impact of a treatment but questioned the robustness of these considerations in practice. Additionally, although NPC recognized that ICER’s plan to address 2 non-drug topics in 2020 is a step in the right direction, the continued use of QALY cost-effectiveness thresholds remains problematic from NPC’s perspective. The statement concluded that there is “no single ‘best’ VAF” and encouraged stakeholders to use ICER’s VAF in combination with other value assessment tools.

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

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REGULATORY UPDATES
 

Pain and Glory: Part D Proposals for 2021/2022

 
 

On Wednesday, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule for contract year (CY) 2021 and 2022 Medicare Advantage and Medicare Part D. CMS also released Part II of the Advance Notice for CY 2021 for Medicare Advantage and Part C.

In the fact sheet for the advance notice, CMS said it was not following the traditional annual Call Letter that provides guidance for stakeholders; instead, it released additional information through its listservs on Thursday afternoon. This included the annual calendar and guidance on plan bidding and bid review. With being force-fed over 1,000 pages worth of policy in 24 hours, we’ve been skimming like crazy to get you the gist of what is there. Highlights include:

Specialty Tier (in Proposed Rule)
CMS is proposing to allow a second specialty tier in Part D. These tiers would still be exempt from the exceptions process. There would be a maximum cost-sharing that would apply to the higher cost-sharing specialty tier; the tiers must have different cost-sharing. Patients could (maybe) request a tiering exception from the higher-cost specialty tier to the lower tier. There is also a proposal to modify what drugs are eligible for the specialty tier and to assign it to those drugs with monthly ingredient costs that are in the top 1% of all monthly ingredient costs.

Generic Utilization (Advance Notice)
As part of the Star Ratings program, CMS is interested in developing measures to assess generic and biosimilar utilization. The focus appears to be on generic alternatives rather than generic substitution. CMS is requesting comments on the use of a generic substitution measure but also a generic therapeutic alternative opportunity rate where the denominator would include branded drugs that are not A/B equivalents but, rather, just in the class of drugs.

Kidney
Continuing the Administration’s focus on kidney care, among the various proposals, CMS would extend Medicare Advantage eligibility to those diagnosed with end-stage renal disease. Kidney transplants would be covered under Medicare Fee-for-Service.

In addition, there were a number of proposed provisions on drug-management programs and potential at-risk beneficiaries. These largely build off the provisions in the Comprehensive Addiction and Recovery Act of 2016 (CARA) and the Substance Use-Disorder Prevention That Promotes Opioid Recovery and Treatment for Patients and Communities (Support) Act. CMS is also proposing that plan sponsors have a Beneficiary Real-Time Benefit Tool (RTBT) in place by January 2022 that would allow beneficiaries to see real-time information on formularies and benefits.

While the rules are largely a little technical and simply codify what has been put forth in legislation, the addition of the specialty-tier proposal and generic therapeutic-alternative measure highlight that the realities of beneficiaries who are chronically ill are still not seen by the Administration. Patient advocates have been asking for years that CMS end the specialty tiers because of the strain it puts on beneficiaries who have no other therapeutic alternatives and cannot ask for tiering exceptions because of the specialty-tier status. Instead, CMS doubled-down on specialty tiers. The same goes with the proposed therapeutic-alternative measure. It could cause plans to introduce additional step therapy or barriers to patient access to provider-preferred therapies. It is certainly not patient-first.

 

Marriage Story: FTC, FDA Hope to Form More Perfect Biosimilar Marketing Process

 
 

Biosimilars are back in the news this week as the Federal Trade Commission (FTC) and the FDA announced a partnership in an effort to restrain manufacturers of brand-name biologics from making false or misleading claims when promoting or comparing biologics to biosimilars. Conversely, the FTC and FDA admit that, as much as it would be problematic for a manufacturer to claim that a branded biologic is the safer option, or that there are clinically meaningful differences where there are none, it would be also problematic for a manufacturer to suggest a biosimilar is identical to a branded biologic product.

The FTC and FDA announcement was accompanied with draft FDA guidance that provides companies with advice on how to craft advertisements for biologics and biosimilars.

The agencies acknowledged the need for a robust biologics marketplace to drive down the cost of critical biologic therapies through competition, which they consider a key component for access to affordable healthcare. They assert false or misleading claims could stem competition within the biologic’s marketplace by undermining physician and/or consumer confidence when considering a more affordable biosimilar option for therapy.

The focus of the collaboration is to cease anti-competitive practices when comparing biologics to biosimilars through the enforcement of antitrust laws, thereby allowing for the fledgling biosimilar market to mature. The FDA press announcement compares the potential of today’s biosimilar and interchangeable market to that of the generic drug market which, through its increased offerings, greatly reduced healthcare costs to Americans.

The FDA has been attempting to spur what many believe to be a torpid market for biosimilars (though it is certainly accelerating) with its comprehensive July 2018 Biosimilars Action Plan that detailed 4 key strategies to increase biosimilar competition. A joint FDA/FTC public workshop will be held March 9 to further discuss a competitive marketplace for biosimilars.

 

Not Quite a Bombshell: Reference Pricing Takes Time to Kick in but Lowers Spending

 
 

A recent study published in JAMA Network Open examined the use of reference pricing on product selection, cost, and cost-share. Reference pricing limits the price of the least costly product in each therapeutic class; patients must pay the difference between higher-cost products and the allowed amount.

The study examined claims data from July 1, 2010 through January 1, 2019 from health insurance purchased by the Reta Trust, a national organization of 55 Catholic organizations, compared to a random sample of claims from California Public Employees’ Retirement System (CalPERS). The Reta Trust implemented reference pricing in mid-2013, while CalPERS did not. Reta Trust’s reference pricing program included more than 70 classes of mostly oral, self-administered drugs through retail and mail-order pharmacies but excluded specialty drugs, biologics, and physician-administered products.

The study found that during the first 2.5 years following reference pricing, more prescriptions were filled for lower-priced drugs in each therapeutic class (5.1%), patient cost-share increased by 10.3%, and prices paid decreased by 19.1% relative to the CalPERS group. The following 2 years, an additional 6.2% of low-priced drugs in each therapeutic class were prescribed, and patient cost-sharing decreased by 21.3%. The authors state reference pricing is associated with lowering employer-paid prices and patient cost-share, but with a time lag in prescribing habits by physicians.

There are substantial patient population differences among Reta Trust and CalPERS beneficiaries compared to the US population; therefore, the generalizability of the findings is in question. Likewise, since the reference pricing in this study only pertained to retail and mail-order settings, prescribing patterns as a whole and impact on patient access of appropriate drugs cannot be inferred. Nevertheless, the direction of patient cost-sharing and employer-paid prices would imply that self-funded employers might investigate reference pricing for their own plans.

 

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 >

 
HEARD ON THE STREET
 

“The prior authorization process in place today must be overhauled to eliminate treatment delays that inflict tremendous harm and needless suffering on our patients, and leave physicians feeling accountable. This is dysfunction in our healthcare system that interferes with patient care and is in fact a barrier to care.”

 – Jerome Seid, MD, practicing hematologist and oncologist in Warren, Michigan, testifying during a hearing of the Michigan State Senate Committee on Health Policy and Human Services in support of SB 612, a bill that would reform prior authorization and step therapy protocols

Source: “Prior Authorization Reform Would Improve Timely Access to Cancer Care,” American Society of Clinical Oncology, February 4

 
POLICY BY NUMBERS
 

$2.5 Billion

 

US health systems invested at least $2.5 billion in programs around social determinants of health from 2017 to 2019, according to a study published Monday.

Source: “Quantifying Health Systems’ Investment in Social Determinants of Health, by Sector, 2017–19,” Health Affairs, February 3

 
 

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 | Jason Eaton | Anuja Kanaskar | Scott Shields | Diane Smith| Jennifer Snow | Ryan Sullivan | Brad Tallamy

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

Feb. 7, 2020

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