In the News

This New York lawsuit is a front-and-center battle for the future of generic drugs

Executives at drug company Actavis knew they had to move fast to avoid a plunge in sales of their top-selling drug, Namenda, a treatment for Alzheimer’s disease which would lose patent protection in July. Read more.  March 19, 2015

Doctors establishing pharmacies inside practices

Some doctors’ offices are establishing pharmacies inside their own practices. “It takes a concern away from us of the patient not getting their medication that day,” says Brent Archer, MD. “They won’t be delayed in their treatment.” Read moreMarch 19, 2015

Express Scripts new Trend O’ Drugs Report: price without value

Last week, Express Scripts released its new 2014 Drug Trend Report. As always, there are valuable data here on drug trend (the change in a third-party payer’s prescription drug expenditures). Below, I analyze the highlights for traditional and specialty drugs, including the impact of new hepatitis C therapies. Read moreMarch 17, 2015

Consumers want convenient healthcare, not brand recognition

As healthcare becomes increasingly consumer-focused, the power of an organization's brand means less and less compared to convenience, according to MedCityNews. Read moreMarch 5, 2015

Drug costs grew last year at fastest rate in decade, report says

U.S. drug spending rose last year at the fastest rate in more than a decade, driven by high-priced hepatitis C medicines, according to a report Tuesday from benefit manager Express Scripts Holding Co. Read moreMarch 9, 2015

Zarxio: how channel dynamics will limit the first U.S. biosimilar

Before payers start counting their billions in savings, let’s disentangle hype from reality for this first biosimilar. As I argue below, reimbursement and channel dynamics will slow Zarxio’s adoption. Read more.  March 10, 2015

Direct from Washington

Opioid Abuse in the U.S. and HHS Actions to Address Opioid-Drug Related Overdoses and Deaths

Deaths from drug overdose have risen steadily over the past two decades and have become the leading cause of injury death in the United States. Prescription drugs, especially opioid analgesics – a class of prescription drugs such as hydrocodone, oxycodone, morphine, and methadone used to treat both acute and chronic pain – have been increasingly implicated in drug overdose deaths over the last decade. From 1999 to 2013, the rate for drug poisoning deaths involving opioid analgesics nearly quadrupled. Deaths related to heroin have also increased sharply since 2010, including a 39 percent increase between 2012 and 2013.

In response to these recent increases in opioid-related morbidity and mortality, the U.S. Department of Health and Human Services (HHS) has made addressing the opioid abuse problem a high priority and is focused on implementing evidence-based approaches to reduce: 1) opioid overdoses and overdose-related mortality and 2) the prevalence of opioid use disorder.

HHS and Secretary Burwell are focused on three priority areas to reach these goals and to combat opioid abuse:

  • Opioid prescribing practices to reduce opioid use disorders and overdose
  • The expanded use of naloxone, used to treat opioid overdoses
  • Expanded use of Medication-assisted treatment (MAT) to reduce opioid use disorders and overdose

These priority areas were identified through a departmentwide effort that tapped all the scientific, analytical and programmatic expertise contained in HHS agencies. The development effort also relied on discussions with states and other stakeholder organizations. The priorities, grounded in the best research and clinical science available, will guide the department’s efforts to implement the most effective and achievable means for addressing the nation’s opioid epidemic.

HHS continues to coordinate the activities of agencies across the department, such as the Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), National Institutes of Health (NIH), Office of the National Coordinator for Health Information Technology (ONC), and Substance Abuse and Mental Health Services Administration (SAMHSA), to ensure effective implementation of the initiative’s programs and policies. HHS has also prioritized the development of an evaluation to identify the most effective strategies for obtaining the greatest public health impact.

Report on House Energy & Commerce Committee hearing titled “Examining the 340B Drug Pricing Program”

On March 24, the House of Representatives Energy and Commerce Subcommittee on Health held a hearing to review the 340B Drug Pricing Program and to understand how it impacts patients, providers, manufacturers, and other stakeholders. The 340B Program provides discounts on covered outpatient drugs that are furnished to patients of eligible covered entities—predominantly nonprofit healthcare organizations that have certain Federal designations, or receive funding from specific Federal programs, and hospitals meeting certain specified criteria.  According to Health Subcommittee Chairman Joe Pitts (R-PA), approximately 11,000 covered entities now participate in the program, in addition to 800 or more manufacturers. Again according to Chairman Pitts, from 2001 to 2011, the number of covered entities doubled, and since Health Resources and Services Administration (HRSA) issued guidance related to contract pharmacies in 2010, their participation in the program has grown exponentially.

At the hearing, Diana Espinosa, Deputy Administrator at HRSA, outlined the agency’s accomplishments to strengthen oversight of the 340B Program, including: improved IT systems to track entity and manufacturer compliance more effectively; increased numbers of covered entity and manufacturer audits; and the addition of more auditors and staff to implement new IT investments. Ms. Espinosa also outlined HRSA’s progress with respect to recommendations for improvement made in Government Accountability Office’s (GAO’s) 2011 Report, Drug Pricing: Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement (GAO-11-836). In that 2011 Report, GAO made four recommendations:

  • Conduct selective audits of 340B covered entities to deter potential diversion;
  • Further specify its 340B nondiscrimination guidance—i.e., prohibition of manufacturers’ discrimination against 340B providers when distribution of drugs is restricted—and require reviews of manufacturers’ plans to restrict distribution of drugs at 340B prices;
  • Finalize new, more specific guidance on the definition of a 340B patient; and
  • Further specify the eligibility criteria for non-publicly owned or operated hospitals that want to enroll in the 340B program.

According to Ms. Espinosa, HRSA has already addressed the first two of these recommendations. HRSA has been actively conducting selective audits since FY2012, and HRSA published a clarification of its nondiscrimination policy in May 2012. In addition, HRSA had planned to address GAO’s final two recommendations as part of its proposed omnibus regulation, which HRSA withdrew from OMB in November 2014 in light of a D.C. Circuit Court of Appeals ruling in May 2014 that HRSA lacked explicit statutory authority to issue it. Ms. Espinosa reports that in place of the proposed omnibus regulation, HRSA intends to release proposed omnibus interpretive guidance for public notice and comment later this year. 

Debra A. Draper, Director of Health Care at GAO, outlined the inadequacies in 340B Program oversight that GAO had previously identified in its 2011 Report, and HRSA’s progress in implementing GAO’s recommendations. 

Ann Maxwell, Assistant Inspector General at HHS Office of Inspector General (OIG), testified that more could be done to strengthen program integrity, particularly by addressing both the lack of transparency in the current program, which could be addressed by sharing ceiling prices and providing greater claims transparency, as well as the lack of clarity in program guidance, which is particularly needed in retail pharmacy settings. Ms. Maxwell noted that HRSA could do a better job with guidance on patient eligibility as well as on how to handle uninsured patients at retail pharmacies. 

Members questioned the witnesses about how HRSA is addressing GAO and OIG recommendations, as well as on the extent of HRSA’s rulemaking authority.  Subcommittee members were complimentary of the program’s purpose and goals and asked for examples of how the program was functioning in this manner. Members, including Representative Larry Bucshon (R-IN), raised concerns about the lack of clear guidance on how program savings should be used, to ensure that the program achieves its purpose of providing discounted drugs for indigent and low-income patients who might not otherwise be able to access necessary drugs or treatments. Members also suggested that more aggressive oversight and potentially congressional action may be needed to maintain program integrity for the long term, particularly for a program that was “exploding in size.” Members of Congress have asked the Medicare Payment Advisory Commission to examine the 340B program and report back on any recommendations. 

Sustainable Growth Rate (SGR) legislation passes house, will have Senate vote mid-April

On March 26, by a vote of 392 to 37, the House of Representatives passed H.R. 2, Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act. The bill repeals the SGR formula by which Medicare pays physicians and replaces it with a system where physicians may participate in a either system where their payments would be subject to performance-based adjustments or one where payments would move away from the fee-for-service structure. The bill extends funding for both CHIP and community health centers for two years. These changes are paid for in part by provisions to require wealthier seniors to pay more for their Medicare outpatient and prescription drug coverage, beginning in 2018. 

H.R. 2 directs HHS to implement a cost-effective process to remove Social Security numbers from Medicare cards. In addition, beginning with the 2016 plan year, valid prescriber national provider identifiers will be required on Medicare Part D pharmacy claims.

H.R. 2 did not include a Medicare pharmacy “lock-in” policy to restrict potential drug abusers to certain networks of pharmacies and providers. In February, the House Ways and Means Committee had approved legislation, Protecting the Integrity of Medicare Act (PIMA), which included provisions to applied the pharmacy lock-in provision to Schedule II drugs, but these lock-in provisions were ultimately dropped from the final version of H.R. 2.

The Senate did not consider H.R. 2 before adjourning for a two week recess, but it is expected to consider the legislation quickly, upon its return to Washington April 13. 

Bipartisan Senate bill introduced to expand Medication Therapy Management (MTM) for seniors

On March 18, Senators Pat Roberts (R-KS) and Jeanne Shaheen (D-NH) introduced the Medication Therapy Management Empower Act, S. 776, to expand access for Medicare beneficiaries to MTM services. According to Senator Roberts, “We have recognized the value of pharmacists in the health system for many years. They are especially valuable for our Kansas communities and are sometimes the only health provider in our rural towns.” S. 776 would allow beneficiaries with a single chronic condition of cardiovascular disease, chronic obstructive pulmonary disease, hyperlipidemia or diabetes to have access to MTM services. The bill has been referred to the Senate Finance Committee. At this point, there is no House companion legislation. 

“Preferred Pharmacy” Developments

On February 5, Representatives Morgan Griffith (R-VA) and Peter Welch (D-VT) reintroduced the Ensuring Seniors Access to Local Pharmacies Act. The new bill, H.R. 793, has 19 bipartisan cosponsors and is identical to the bill of the same name from last Congress. H.R. 793 would allow seniors in medically underserved areas to access lower copays at any pharmacy willing to accept the Medicare Part D plan’s “preferred pharmacy” terms and conditions. The bill has been jointly referred to both the Energy and Commerce and Ways and Means Committees. A Senate companion bill has not been introduced.

As reported previously, “preferred pharmacy” prescription drug plans have generated confusion among Part D beneficiaries and their caregivers. Specifically, during the 2014 Medicare open enrollment for 2015 year plans, Aetna provided inaccurate information regarding which pharmacies were “in-network,” and that erroneous information was circulated to beneficiaries. When the new year began, a number of the approximately 400,000 beneficiaries found that their pharmacy was not in fact “in-network.” 

The Centers for Medicare & Medicaid Services (CMS) issued its draft 2016 Medicare Advantage and Part D call letter February 20, in which CMS indicated its intention to evaluate beneficiary access issues in “preferred pharmacy networks.” CMS also intends to publish information evaluating how each plan offers beneficiaries a variety of options for cheaper out-of-pocket prescription costs. In comments on the CMS call letter, the National Community Pharmacists Association (NCPA) recommended that CMS require bidding plans to submit a plan to address and fix Medicare Plan Finder errors, including the amount of time it would take to correct inaccurate information. In addition, NCPA urged CMS to require that pharmacies be informed about their network status by the Part D plans. 

Legislation to reauthorize prescription drug monitoring programs

On February 12, Senators Jeanne Shaheen (D-NH), Pat Toomey (R-PA), Dick Durbin (D-IL) and Jeff Sessions (R-AL) reintroduced bipartisan legislation, S. 480, to reauthorize the National All-Schedules Prescription Electronic Reporting (NASPER) program, which provides grants to states to maintain, improve, and expand their prescription drug monitoring programs. The bill has been referred to the Health, Education, Labor and Pensions Committee. On March 26, Representatives Ed Whitfield (R-KY), Joe Kennedy, III (D-MA), Larry Bucshon, M.D. (R-IN), and Frank Pallone, Jr. (D-NJ) introduced a House bill, H.R. 1725, to reauthorize the NASPER program.  H.R. 1725 has been referred to the Energy and Commerce Committee.

Update on legislation to combat prescription drug abuse

The Ensuring Patient Access and Effective Drug Enforcement Act, H.R. 471, was approved by the House Energy and Commerce Committee February 12. The bill is now pending before the House Judiciary Committee. Similar to legislation introduced in the last Congress, H.R. 471 would create a more transparent process to address the diversion of controlled substances and promotes a more collaborative working relationship between industry stakeholders and regulators, to fight the abuse and diversion of prescription drugs. Also on February 12, Senators Orrin Hatch (R-UT) and Sheldon Whitehouse (D-RI) introduced companion legislation, S. 483, which was referred to the Judiciary Committee.

Legislation to Combat Opioid and Heroin Addiction

On February 12, bipartisan, bicameral legislation entitled the Comprehensive Addiction and Recovery Act was introduced. Senators Rob Portman (R-OH), Amy Klobuchar (D-MN), Sheldon Whitehouse (D-RI), Kelly Ayotte (R-NH), Chris Coons (D-DE) and Mark Kirk (R-IL) introduced S. 524, which has been referred to the Judiciary Committee. Representatives Jim Sensenbrenner (R-WI) and Tim Ryan (D-OH) introduced H.R. 953, which has been referred to the House Committees on Energy and Commerce, Judiciary and Ways and Means. These bills represent a comprehensive effort to fight opioid and heroin addiction and include prevention and law enforcement strategies as well as the expansion of evidence-based treatment. The bills establish a federal interagency task force to develop best practices for pain management and pain medication prescribing. The bills also authorize grants to develop or expand take-back programs.