Regulatory watchdog calls for more transparency on CMS star-rating methodology

The Centers for Medicare & Medicaid Services is facing accusations that it failed to comply with notice-and-comment laws and wasn't transparent in its methodology when it made changes to its five-star ratings system. July 10, 2015 - read more

What's on Walgreens CEO's shopping list?

Stefano Pessina, named permanent chief executive officer of Walgreens Boots Alliance Inc. on Thursday, wasted no time in signaling that he wants the largest U.S. drugstore chain to grow through acquisitions. July 14, 2015 - read more

Newly eligible Medicaid beneficiaries more costly to cover than expected

It was more expensive than anticipated to cover newly eligible individuals under Medicaid, according to a recent report, a finding that may raise concerns for states weighing expansion of the program in the wake of the Supreme Court's ruling to uphold a key provision of the Affordable Care Act. July 13, 2015 - read more

Specialty pharmacies proliferate, along with questions

As the end of each month nears, Megan Short frets. Her 1-year-old daughter, Willow, cannot afford to miss even a single dose of a drug she takes daily to prevent her body from rejecting her transplanted heart. July 15, 2015 - read more

CMS launches Star Rating System for home health care agencies

Home Health Compare is the most recent transparency site launched by CMS. The new ratings make it the sixth star-rating system to be implemented on the Medicare website under the Obama administration. June 20, 2015 -

More than one in four U.S. pharmacies is now a 340B contract pharmacy; Walgreens still dominates

Our latest analysis finds that 17,000 pharmacy locations contract with a 340B-eligible covered entity (usually a hospital). Walgreens remains the biggest player, although Walmart, CVS and Rite Aid now collectively account for about one-quarter of contract pharmacy locations. July14, 2015 - read more

Action needed to reduce financial incentives to prescribe 340B drugs at participating hospitals

Certain providers, including hospitals that serve a disproportionate number of low-income patients, have access to discounted prices on outpatient drugs through the 340B Drug Pricing Program, which is administered by the Health Resources and Services Administration (HRSA) within the Department of Health & Human Services (HHS). In 2012, these hospitals—referred to as 340B disproportionate share hospitals (DSH) because they are eligible for the program based on their serving a disproportionate share of low-income patients and other specified criteria—were generally larger and more likely to be teaching hospitals compared with non-340B hospitals. July 6, 2015 - read more


Prescription drug pricing concerns

According to an IMS Institute for Healthcare Informatics, prescription drug spending in 2014 jumped by 13 percent, to hit $374 billion. A Kaiser Family Foundation survey reported in June found that almost three quarters of Americans find the cost of prescription drugs “unreasonable,” with half of the public reporting they currently take a prescription medication, and one in five respondents reporting that they or a family member has had trouble affording prescriptions. With attention focused on the breakthrough hepatitis C cure Sovaldi®, which costs $84,000 for a 12-week treatment, and other breakthrough drugs in the pipeline, the public and Members of Congress are increasingly concerned about the costs of prescription drugs. 

At an annual meeting of the American Society of Clinical Oncology, cancer specialist Dr. Leonard Saltz gave a high profile speech about the costs of new cancer treatments, asserting that “these drugs cost too much.” Dr. Saltz went on to say that “cancer-drug prices are not related to the value of the drug. Prices are based on what has come before and what the seller believes the market will bear. Dr. Saltz recognized that doctors have typically not talked about drug prices but these prices are starting to impact patient care, and “all of us stakeholders need to stop pretending that price is something we don’t need to discuss, because it affects all of us, and it’s affecting our ability to deliver quality care to everyone.” 

Prescription drug pricing will continue to be an issue for all pharmacies to watch, as these breakthrough, higher-priced drugs pose challenges across the health care delivery system and are subject to payment pressures, prior authorization requirements or other utilization controls. Each of these issues impacts how pharmacies can provide patients with their needed medications. 

Transparency in generic drug pricing

On July 7, eleven bipartisan House Members sent a letter to the Centers for Medicare & Medicaid Services (CMS) seeking information about requirements for greater transparency in generic drug pricing in Medicare Part D plans. CMS issued a final rule on Medicare Part D in May 2014, with transparency provisions for maximum allowable cost (MAC) lists, yet the regulatory mechanisms to implement these transparency provisions has not yet been announced. Under the final rule, pharmacy benefit managers (PBMs) will be required to inform pharmacies what sources they use to make MAC updates and to update prices at least once every seven days. These Members of Congress asked CMS to share its plans as the agency prepares to enforce these new transparency provisions, and by doing so, has put the agency on notice that they intend to keep a close eye on this issue.

Congressional hearing on fraud in Medicare Part D

On July 14, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing on fraud and abuse in the Medicare Part D program. While drug prices were not the focus of the hearing, Subcommittee Chair Tim Murphy (R-PA) observed that Part D is the fastest growing part of Medicare. The Subcommittee specifically addressed fraud-fighting recommendations from the Health and Human Services (HHS) Office of Inspector General dating back to 2006, including requiring plan sponsors to report data on inquiries and responses to incidents of fraud and abuse, expanding drug utilization programs to include drugs susceptible to fraud and abuse and determining the effectiveness of plans’ fraud and abuse detection programs.

Chairman Murphy noted that “CMS' failure to implement these recommendations has led to trends of questionable billing associated with pharmacies, prescribers and beneficiaries.” Chairman Murphy also drew a link between fraud and abuse in the Part D program with opioid abuse, observing that some of the questionable billing practices raised at the hearing were tied to frequently abused opioids. 

Food and Drug Administration (FDA) delays enforcement of Track & Trace until Nov. 1, 2015

On June 30, the FDA published industry guidance indicating that pharmacies would have an additional four months to comply with product tracing requirements of the Drug Supply Chain Security Act (DSCSA). The National Community Pharmacists Association (NCPA), the American Pharmacists Association, the National Alliance of State Pharmacy Associations and the American Society of Health-System Pharmacists requested that the FDA delay the July 1 product tracing deadline for dispensers, noting their concerns over potential disruptions to the supply chain. These groups explained to the FDA that the delay in enforcement until May 1 for manufacturers, wholesale distributors and repackagers had compressed the implementation timetable for dispensers, potentially risking product shortages of disrupting patient access. The groups pledged “to continue intense, concerted efforts toward full compliance.” 

CMS requires Part D plans with limited access to preferred pharmacies to include marketing disclaimer language 

On May 21, 2015, CMS issued a memorandum seeking comment on marketing disclaimer language for Medicare Part D plans with limited access to preferred pharmacies. In response to comments, including from the NCPA, CMS revised its disclaimer language to provide greater transparency and clarity for beneficiaries. This disclaimer language is required on 2016 plan marketing materials that reference preferred pharmacy networks or preferred cost sharing benefits. 

“<insert organization/plan name>’s pharmacy network offers limited access to pharmacies with preferred cost sharing in <insert geographic area type(s) and state(s) for which plan is an outlier)>1. The lower costs advertised in our plan materials for these pharmacies may not be available at the pharmacy you use. For up-to-date information about our network pharmacies, including pharmacies with preferred cost sharing, please call <insert Member Services phone number and TTY> or consult the online pharmacy directory at <insert website>.”

CMS is also requiring all Part D sponsors to analyze their own networks to determine if access to preferred pharmacies in their networks falls below the published outlier thresholds, of the lowest 10th percentile as compared with all Part D plans. CMS will require plan sponsors to disclose on all plan marketing materials if their 2016 network falls below these thresholds. 

Prescription Drug Importation

As drug pricing continues to be of concern to Members of Congress and their constituents, the prescription drug importation issue will linger in this Congress. Although enactment of any drug importation legislation remains unlikely, Members of Congress have introduced a number of stand-alone importation bills. Most recently, on June 3, Representatives Keith Ellison (D-MN) and Dana Rohrabacher (R-CA) introduced H.R. 2623, the Personal Drug Importation Fairness Act of 2015. The bill would allow consumers to import up to a 90 day supply of a drug from “qualified countries,” which are defined as Australia, Canada, Israel, Japan, New Zealand, Switzerland, South Africa, a member-state of the European Union or a country in the European Economic Area. 

Additionally, Members of Congress are pursuing an alternative legislative strategy, seeking to amend moving legislation with prescription drug importation provisions. For instance, during the House consideration of H.R. 6, the 21st Century Cures Act in July (referenced in story below), Representatives Chellie Pingree (D-ME) and Dana Rohrabacher (R-CA) submitted an amendment to allow for the personal importation of safe and affordable drugs from approved pharmacies in Canada. The proposed amendment was not ruled in order to be considered during House debate. 

Advocates for community pharmacists, distributors and pharmaceutical manufacturers will continue to watch and react very quickly to any viable congressional activity on drug importation. Opponents of drug importation raise concerns about potential harm to consumers and can point to recent enforcement activity, such as that announced on June 18 by the Food and Drug Administration (FDA), in Operation Pangea VIII. The FDA, in partnership with international regulatory and law enforcement agencies in 115 countries, issued warning letters to operators of websites illegally selling unapproved prescription drugs and medical devices, seizing over 800 packages containing illegal products. 

21st Century Cures legislation passes House

On July 10, the U.S. House of Representatives passed the 21st Century Cures Act (H.R. 6) by a vote of 344-77. Launched a year ago by House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Representative Diane DeGette (D-CO), the bi-partisan “21st Century Cures” Initiative is a comprehensive examination of the steps Congress can take to accelerate the drug and device discovery, development, and delivery process so that cures may reach patients faster. The 21st Century Cures Initiative solicited ideas from patients and experts from all components involved with drug and device development and, earlier this year, Chairman Upton introduced a discussion draft including many of the ideas gathered over the “Cures” process. 

While the bill is focused on innovation and pharmaceutical development, H.R. 6 contained some provisions relevant to pharmacy. In particular, H.R. 6 contained “lock-in” provisions, to allow Part D plan sponsors to institute a drug management program limiting the number of prescribers and pharmacies that could provide frequently abused drugs to Part D beneficiaries. During the legislative process, the NCPA, long-term care pharmacies and seniors’ advocates raised concerns that “lock-in” policies might make it more difficult for Medicare beneficiaries to access needed medication, or that Part D sponsors might be incentivized to direct Medicare beneficiaries to a particular pharmacy in which they have a financial interest. Accordingly, H.R. 6, as passed the House, makes such “lock-in” policies optional for Part D plans, ensures beneficiary access to critical medications in plans that elect to institute a drug management program and allows for beneficiary appeals of the policy. The Secretary of HHS would be directed to hold a stakeholder meeting for input on issues related to drug management programs. 

The Senate has been working on a related but separate “Innovation” effort which is expected to be a much smaller scale effort. A draft of their legislation may be released late summer or early fall.