IN THE NEWS:

Is Walgreens circling the PBM market?

October 30, 2015 - When those in the know heard about Walgreens Boots Alliance’s plan to acquire rival Rite Aid, many thought of three letters. And it wasn’t CVS. - read more

McKesson plays up alternatives as Rite Aid deal hangs in balance

October 29, 2015 - With a lucrative supply deal hanging in the balance, drug distributor McKesson Corp moved to reassure investors on Thursday by announcing its retention of a contract with Omnicare, a supplier of prescription medicines to nursing homes.- read more

Dr Reddy’s plans bigger push on biosimilars in emerging markets

October 29, 2015 - Dr Reddy’s Laboratories Ltd plans to step up sales of biosimilars, or copies of complex biotech drugs, in emerging markets in the next few years, its chief operating officer said on Thursday. Biosimilars are a lucrative category of medicines that is expected to generate billions of dollars in sales in the next few years, but Indian drugmakers are lagging their Western peers in launching biosimilars in developed markets. - read more

FDA again delays track and trace

October 30, 2015 - After meeting with representatives from the American Society of Health-System Pharmacists (ASHP), the FDA recently agreed to delay enforcement of its track and trace requirements. - read more

Aetna-Humana merger receives approval from shareholders

October 19, 2015 - Health insurer Aetna’s (AET.N) proposed $37 billion acquisition of smaller rival Humana Inc (HUM.N) was approved by the shareholders of both companies. - read more

Amid mixed news for Medicare ACOs, experts fear model is ‘unsustainable’

October 21, 2015 - Experts disagree on the effectiveness of Medicare’s accountable care organizations, especially amid yet another high-profile departure from the Pioneer ACO program--this time from Dartmouth-Hitchcock Health System. - read more

Biosimilars—Substitution is Not Just for Your Grandfather’s Generics Anymore

October 22, 2015 - In 2015, we saw the first FDA approval of a biosimilar of a biologic drug that lost patent protection, but many questions remain. What exactly is a biosimilar, and what are the repercussions for patients, payers, and manufacturers, if multiple biosimilars are approved for the same drug? - read more

Employers Get Tougher About Pharmacy Benefits and Specialty Drug Management

October 13, 2015 - The charts below summarize (1) cost-sharing tier structures, (2), average copayments, by formulary tier, (3) type of cost-sharing (coinsurance and copayment), and (4) new data on specialty drug management strategies. - read more


DIRECT FROM WASHINGTON:

Developments in Washington

On October 29, Paul Ryan (R-WI) was sworn in as Speaker of the U.S. House of Representatives, following a tumultuous month-long period in which Speaker John Boehner (R-OH) resigned and Majority Leader Kevin McCarthy (R-CA) exited the race to succeed Boehner. As the Republican caucus looked for successors, Ryan was ultimately persuaded to lead the party once he was assured that he had the support of a strong majority of the caucus. Speaker Ryan outlined his priorities as fixing the tax code, paying down the debt, and “putting patients in charge of their health care.” He noted that “the House is broken” but that he had no interest in laying blame or settling scores but instead wanted to start with a clean slate. Additionally, he promised that “committees should take the lead in drafting all major legislation,” consistent with his approach as chairman of the Ways and Means Committee, but a significant change from recent practice, where major legislation has been developed in a relatively closed fashion by the House leadership.

Prior to his exit, Speaker Boehner negotiated a two-year budget and debt ceiling agreement, H.R. 1314, which passed the House by a vote of 266-167 on October 28. All Democrats in the House supported the measure, and only 79 Republicans voted in favor. The Senate approved the bill in the early morning hours of October 30, by a vote of 64-35, and President Obama signed the measure into law on November 2. The law lifts the defense and nondefense spending caps agreed to in 2013 by $80 billion for the next two years and raises the debt limit through early 2017. The urgency in moving this bill was due to U.S. Department of the Treasury estimates that the country would hit its current debt ceiling on November 3. The cost of the law is offset through a combination of tax enforcement measures, user fees, entitlement tweaks, and selling off a portion of the Strategic Petroleum Reserve.

Notably, the budget agreement did include one provision, Section 602, which amends the Medicaid statute to impose, for the first time, an inflation penalty rebate on generic drugs. The provision, long advocated by Senator Bernie Sanders (I-VT) and Congressman Elijah Cummings (D-MD), would provide Medicaid with larger rebates if the price of a generic product grows faster than inflation.

Before the end of the year, Congress must address funding for the federal government. To avoid a government shutdown when Fiscal Year 2015 funding expired on September 30, Congress passed a continuing resolution to keep the government open through December 11. In the remaining two months of 2015, Congress may also address a number of expiring tax provisions as well as reauthorization of the highway trust fund authorization, which is set to expire on November 20.

Obama Administration Announces Forum on High Prices of Prescription Drugs

On November 3, Secretary of Health and Human Services Sylvia Burwell announced a November 20 conference focused on how to speed discovery of innovative drug treatments while making those treatments more affordable. In her invitation to stakeholders, Secretary Burwell noted that “…in general, the development of new, innovative medicines has been good for both patients and our economy. However, the high and growing cost of drugs has created hardship for families, employers, and states. Specialty medications represent only 1% of all prescriptions but, in 2014, these medications resulted in over 31% of all drug spending.” The forum will bring together pharmaceutical executives, patient advocates, doctors and hospital executives, employers, insurance carriers, and state officials to discuss “…how to foster a health care system that leads in innovation, delivers the most affordable, highest quality medicines and results in healthier people.” The day long forum will be held in Washington, D.C. and will be webcast live.

Congressional Focus on Healthcare Industry Consolidation

Following the announcements of proposed health insurance industry mergers, of Anthem acquiring Cigna and of Aetna acquiring Humana, the House and Senate Judiciary Committees held hearings to examine the impact of consolidation for providers and policyholders. The National Community Pharmacists Association (NCPA) praised Congress for delving into this issue and noted that “policymakers cannot allow the ‘merger mania’ gripping the nation to proceed in a way that harms patients and the community pharmacists who serve them.”

The House Judiciary Regulatory Reform, Commercial and Antitrust Law Subcommittee held is first hearing on September 10, receiving testimony from representatives of the American Medical Association (AMA), the American Hospital Association (AHA), and America’s Health Insurance Plans (AHIP). In advance of the hearing, the AMA released a report finding that the proposed mergers could raise the cost of coverage in 154 cities in 23 states. The AHA testified against the proposed mergers, noting that consolidation would increase prices for patients and would eliminate valuable contributors to medical innovation. AHIP defended the mergers and attributed rising health care costs on hospital mergers. Some Members asserted that the increased government intervention of the Affordable Care Act (ACA) has stifled competition. On September 29, the Subcommittee held a second hearing, featuring testimony from the CEOs of Anthem and Aetna, as well as representatives from the AMA and the AHA. At both hearings, Congressman Doug Collins (R-GA) raised specific concerns about the harmful impact of pharmacy benefit management (PBM) market consolidation.

On September 22, the Senate Judiciary Antitrust, Competition Policy and Consumer Rights Subcommittee held a hearing featuring testimony from the CEOs of Aetna and Anthem, along with representatives from the AHA and Consumers Union. The Aetna and Anthem CEOs characterized the current marketplace as competitive, while AHA testified that the mergers should be of “extreme concern to consumers” and noted that 97% of the market for Medicare Advantage was concentrated. Subcommittee member and former Connecticut Attorney General Richard Blumenthal (D-CT), a critic of the mergers, urged the Justice Department to look at the national market, not just the local market, in evaluating these mergers. The Senate Subcommittee held a follow up hearing on October 7, focusing more broadly on merger and acquisition reviews by the Department of Justice and the Federal Trade Commission.

NCPA will continue to encourage Congress to focus on health industry consolidation and its impact on independent pharmacists. Given the demonstrated congressional interest as well as the recent announcement that Walgreens Boots Alliance would purchase Rite Aid Corporation, Congress may broaden its focus to include an examination of the PBM industry.

Congress Asks the Centers for Medicare & Medicaid Services (CMS) for Greater Part D Price Transparency

On October 12, a bipartisan group of 12 House members, led by Congressmen Austin Scott (R-GA) and Dave Loebsack (D-IA), sent a letter to CMS requesting the agency finalize guidelines released in 2014, proposing to standardize pharmacy price concession reporting to increase transparency in the Medicare Part D program. The Congressmen noted in their request that some Part D plans have manipulated how and when price concessions and incentive payments are reported, leading beneficiaries to rely upon what may be inaccurate data on the Medicare Plan Finder website. The NCPA strongly supports finalizing this guidance and points out that consistent reporting would both improve CMS’ ability to oversee the Part D plan and ensure beneficiaries have reliable information on the Medicare Plan Finder. Beneficiary and consumer advocates, including the Medicare Rights Center, Families USA, and the National Council on Aging, also support CMS’ proposal to standardize reporting.

Congress Examines Medication Therapy Management (MTM) Issues 

On October 21, the House Energy and Commerce Subcommittee on Health held a hearing on the MTM program under Medicare Part D. Testifying at the hearing were: Tim Gronniger, Director of Delivery System Reform, CMS; Lawrence Kocot, Principal and National Leader Center for Healthcare Regulatory Insight, KPMG LLP; Mark Merritt, President and CEO, Pharmaceutical Care Management Association (PCMA); Jesse McCullough, Director Field Clinical Services, Rite Aid Corporation; and Richard Thomas Benson, Associate Director of Stroke, MedStar Washington Hospital Center. The hearing follows CMS’ September 28 announcement of a new MTM demonstration project to launch in five Part D regions in 2017.

Mr. Gronniger testified that beneficiary participation in MTM programs is currently as low as 11%, which CMS suggests is due to misaligned incentives that result in Part D plans focusing on meeting minimum technical requirements as opposed to identifying opportunities to improve overall beneficiary health. Mr. Gronniger recognized that incentives need to be realigned to encourage investment in MTM services, noting that a key element of the demonstration is prospective payment outside of the plan’s bid for more extensive MTM interventions. Mr. Merritt, representing the PBM trade association which has not traditionally supported MTMs, recognized that proper alignment of incentives could be a win-win for beneficiaries and PBMs. Nonetheless, Mr. Merritt urged Congress to avoid adding new MTM requirements before the five year demonstration program yields results. In contrast, Congressmen Morgan Griffith (R-VA) and Gene Green (D-TX) asked whether good ideas and outcomes might be adopted from the demonstration program earlier. Mr. Gronniger responded that CMS would be open to discussing this with Members of Congress, should components of the demonstration model yield particularly strong results early in the process.

Dr. Benson cited the critical role that pharmacists can play in medication adherence, leading to improved outcomes for beneficiaries and reduced medical costs. Congressman Brett Guthrie (R-KY) urged his colleagues to support of H.R. 592, the Pharmacy and Medically Underserved Areas Enhancement Act, to allow Medicare beneficiaries access to and coverage of pharmacists in medically underserved areas for certain health services. The bill has 234 bipartisan cosponsors and has been referred to the Energy and Commerce Health Subcommittee, but no further action has been scheduled. NCPA did not testify at the hearing but offered a statement of support for MTM services as an opportunity to improve beneficiary care while providing greater efficiencies in the health care system. NCPA noted that many PBMs have not invested sufficiently in providing MTM services and urged

Continued Focus on Addressing Drug Abuse

The Obama Administration and Congress have continued their focus on addressing prescription drug abuse and heroin use. The focus has expanded to the health crisis of this epidemic and is much broader than prescription drug diversion.

In recent weeks, Congress has held a number of hearings focusing on drug abuse. The House Energy and Commerce Subcommittee on Health has held two hearings, on October 8 and October 20, entitled “Examining Legislative Proposals to Combat our Nation’s Drug Abuse Crisis.” The legislative proposals focused on various aspects of drug abuse, including addiction, treatment, public awareness campaigns, scheduling of certain designer drugs, and expanding access to opioid overdose reversal drugs. The Senate Finance Committee held a hearing entitled “Examining Heroin and Opiate Abuse in Southwestern Pennsylvania” in Pittsburgh on October 15.

On October 21, President Obama traveled to West Virginia to meet with individuals and families affected by prescription drug abuse and heroin use. The President issued a memorandum to federal agencies and departments, to address prescriber training and improve access to treatment. Federal agencies and departments will be required to provide prescriber training to Federal health care professionals who prescribe controlled substances. Additionally, agencies and departments that provide or contract to provide health benefits are directed to review policies to determine whether there are any barriers to medication-assisted treatment for opioid use disorders and formulate plans to address any such barriers. The President also announced a private sector effort to address the prescription drug abuse and heroin epidemic. Health care provider groups have committed to complete opioid prescriber training; and major media organizations as well as the National Basketball Association, and Major League Baseball have committed to donate millions of dollars of media to public service announcements about the risks of prescription drug misuse.