IN THE NEWS:
American Associated Pharmacies and H. D. Smith announce joint venture to create new managed care contracting entity
Feb. 29, 2016 - American Associated Pharmacies (AAP) and H. D. Smith today announce an agreement to combine respective pharmacy services administrative organizations (PSAO) into a stand-alone PSAO entity, servicing more than 2,300 independent retail pharmacies across the United States. The joint venture, known as Arete Pharmacy Network, will combine and succeed H. D. Smith’s Third Party Network and AAP’s United Drugs. - read more
340B purchases hit $12 billion in 2015—and almost half of the hospital market
Feb. 22. 2016 - According to new data that Apexus has made available to Drug Channels, discounted purchases made under the 340B Drug Pricing Program hit $12 billion in 2015. That’s a whopping 67 percent higher than the 2013 figure. I estimate that the undiscounted value of these purchases exceeds $17 billion. - read more
Break up the insulin racket
Feb. 20, 2016 - ONE of my patients — whom I will call Mrs. B — is a 78-year-old who has had Type 2 diabetes for over 30 years. She takes several injections of insulin each day. Her blood sugars have been running too high, but she doesn’t want to increase the dose of her insulin. She told me she simply can’t afford to. - read more
Retail pharmacy clinics: top players and the coming 2016 pause
Feb.16, 2016 - As low-cost generics come to dominate retail dispensing activity, clinics have emerged as a way for drugstores and other retail pharmacy outlets to diversify into non-dispensing revenues. - read more
Community pharmacy expertise seen as springboard for growth
Feb. 16, 2016 - Stakeholders in chain pharmacy understandably direct a lot of attention to the giants of the industry, such companies as CVS Health, Walgreens Boots Alliance, McKesson and Kroger. Yet they shouldn’t lose sight of the regional players that, in the aggregate, still account for a substantial part of the business and remain an important source of fresh thinking and innovation. - read more
Cardinal Health, well-known in hospitals, now sells to consumers
Feb. 19, 2016 - Cardinal Health is one of Ohio’s largest companies by revenue, but because its drug-distribution and medical-products businesses serve mainly health-industry customers, many consumers do not know the name. - read more
A pharmacy owner’s view of preferred networks
Feb. 18, 2016 - Today’s guest post comes from Michael Deninger, a pharmacy owner in Iowa who writes The Thriving Pharmacist blog. Preferred and limited networks have become a prominent feature of pharmacy benefit plans. - read more
Wisconsin pharmacies will pilot making prescription drug bottles easier to read
Jan. 17, 2016 - Pharmacies across the country have been slow to adopt voluntary standards for labeling medication, but Wisconsin might become an exception: Some pharmacies are trying to make pill bottles easier to read in the hope that more patients will take their medication as intended. - read more
DIRECT FROM WASHINGTON:
November 2016 Presidential Election Dates
As the field begins to narrow, it may be helpful to have this map from the Federal Election Commission, which references all presidential primary dates.
Additionally, the Republican and Democratic party conventions, which may end up determining who is the nominee for each party, are scheduled:
July 18-21, 2016
week of July 25, 2016
Congressional and state action to address prescription drug abuse
Already in 2016, three Senate Committees have held or will soon hold at least five hearings focused solely on the opioid prescription drug abuse issue. The Senate Aging Committee has held two hearings with a third scheduled, all focusing on opioid use and abuse in older Americans. The Senate Finance Committee held a hearing on the opioid epidemic and focused on S. 1913, the Stopping Medication Abuse and Protecting Seniors Act, introduced by Senator Patrick Toomey (R-PA) to establish a Medicare lock-in program. The Senate Judiciary Committee has held a hearing on heroin and prescription drug abuse.
The Senate Judiciary Committee approved, on Feb. 11, two bills to address prescription drug abuse. Specifically, the Senate Judiciary Committee held a markup of the Ensuring Patient Access and Effective Drug Enforcement Act - S. 483, sponsored by Senators Orrin Hatch (R-UT) and Sheldon Whitehouse (D-RI); and the Comprehensive Addiction and Recovery Act - S. 524, or CARA, sponsored by Senators Whitehouse (D-RI), Portman (R-OH), Klobuchar (D-MN), Ayotte (R-NH), Coons (D-DE) and Kirk (R-IL). Both bills were amended and approved unanimously, and the Senate is scheduled to consider the bills during the week of Feb. 29. Note that S. 483 is the companion measure to H.R. 471, sponsored by Reps. Marino (R-PA), Blackburn (R-TN), Welch (D-VT) and Chu (D-CA), which passed the House of Representatives in April of last year. S. 483 and H.R. 471 would require the Attorney General to cite a specific violation of the law before revoking or suspending a DEA registration; would allow a registrant to submit a corrective action plan before revocation or suspension proceedings; and would require stakeholders to report on how enforcement activities may be adversely impacting patient access.
Additionally, Judiciary Committee Senator Jeanne Shaheen (D-NH) has proposed legislation, S. 2423, making emergency appropriations to combat heroin and opioid abuse. Senator Richard Durbin (D-IL), also a member of the Judiciary Committee, has advocated for mandatory funding to fight heroin and opioid abuse and noted that pharmacists have a role to play in combating abuse and diversion.
The Obama Administration continues to focus on addressing opioid and prescription drug abuse, as outlined in subsequent articles in this edition. In addition to budget and Medicare Part D proposals, CMS issued guidance for the Medicaid program, outlining: Medicaid pharmacy benefit management strategies to combat prescription drug abuse, ways to increase the use of naloxone to reverse opioid overdose, and how to prescribe methadone for pain relief. CMS noted that the opioid overdose epidemic disproportionately affects Medicaid beneficiaries, as they are prescribed painkillers at twice the rate of non-Medicaid patients and are at three to six times higher risk of a prescription painkiller overdose.
On a state level, Massachusetts is working on comprehensive opioid addiction legislation. Last fall, Governor Charlie Baker proposed a comprehensive bill, and the Massachusetts House and Senate have been working on the legislation. Most recently, in mid-January, the House voted to approve its version of the comprehensive bill addressing opioid addiction. The bill, H. 3944, now moves to House-Senate negotiation in order to develop a final compromise bill. The House bill did not ultimately include an amendment to institute an “Academic Detailing Program” operated via funds collected from “persons who manufacturer, distribute, or dispense a controlled substance.” The House bill did include language directing the designation of at least one prescription drug drop box and other safe locations at which to dispose of prescription drugs, such as police stations, pharmacies, local health departments.
Congressional and state activity on drug pricing
Drug pricing continues to be an issue for policymakers, continuing with congressional hearings, congressional reports, policy proposals and state ballot initiatives:
On Feb. 4, the House Committee on Oversight and Government Reform held a hearing, “Developments in the Prescription Drug Market,” at which Martin Shkreli, former CEO of Turing, The Committee did hear testimony from: Dr. Janet Woodcock, Director, Center for Drug Evaluation and Research, FDA; Mark Merritt, President and CEO, Pharmaceutical Care Management Association; Howard Schiller, Interim Chief Executive Officer, Valeant Pharmaceuticals; and Nancy Retzlaff, Chief Commercial Officer, Turing Pharmaceuticals.
- The hearing focused on the methods and reasoning behind recent drug price increases; the role of pharmacy benefit managers in negotiating drug prices, and alleged lack of transparency in pricing contracts; impediments to timely review and approval of generic drug applications, and what the government can do to improve the efficiency and competitiveness in the market.
- Both the Committee Chairman and Ranking Member indicated they would continue their investigation into the issue of drug pricing. Rep. Buddy Carter (R-GA), a pharmacist elected to Congress, indicated support for legislation introduced by Rep. Collins (R-GA) (H.R.244, MAC Transparency Act) to increase transparency in arrangements by PBMs to ensure that independent pharmacies are not “shut out.”
- In comments submitted to the Committee by the National Community Pharmacists Association (NCPA), the NCPA urged Congress to “demand increased transparency” into the “overly concentrated and largely unregulated PBM industry (which) exerts immense influence over how prescription drugs are accessed by the majority of Americans.” NCPA contended that independent community pharmacists are forced to agree to PBMs’ “take it or leave it” contracts in order to continue serving longstanding patients and that community pharmacists have no transparency into generic drug reimbursement rates and routinely incur losses when these rates change.
House of Representatives Affordable Drug Pricing Task Force
In mid-January, 50 House Democrats sent a letter to HHS Secretary Burwell and NIH Director Collins urging them to use their existing statutory authority to respond to the increase in the cost of pharmaceuticals. The letter calls on NIH to develop guidelines for excising so-called “march-in rights” where the government can invalidate intellectual property claims based upon federally funded research, if the benefits of the patented products are not “available to the public on reasonable terms.” The leaders of the House Affordable Drug Pricing Task Force, Reps. Doggett (D-TX) and Welch (D-VT), indicated that more recommendations would follow this letter and they plan to ask the administration to increase drug transparency efforts and comparative effectiveness research to curb “price gouging.”
State Drug Pricing Initiative Moves Forward
After recertifying a ballot initiative to reduce Medicaid drug prices, Ohio Secretary of State Jon Husted forwarded the initiative, the Ohio Drug Price Relief Act, to the General Assembly. This initiative would require state programs to pay no more for medications than paid by the U.S. Department of Veterans Affairs.
Ohio is a key swing state in the upcoming presidential election, and supporters of the initiative aim to place this measure on the 2016 election ballot. The Ohio legislature could potentially take up to four months to pass the measure, unchanged. If the initiative does not pass the legislature, petitioners may submit additional signatures to get the initiative placed on the ballot. If these additional signatures were submitted too late for the November 2016 election, the initiative would be placed on the ballot in the next election cycle.
Consumer advocates are pushing a similar initiative in California.
CMS targeting drug pricing and opioid abuse in Part D plans
On Feb. 19, CMS released its 2017 Advance Notice and Draft Call Letter for Part D plans and is targeting high drug costs and the opioid overdose epidemic in its proposed requirements.
The agency is encouraging plans to notify patients about drugs that are added to formularies mid-year, such as generics or other newly approved drugs, which may provide better value than existing options. To promote greater price transparency, CMS directs plans, by 2017, to provide a link to the Agency’s new Medicare Drug Spending dashboard from the Medicare Plan Finder website.
Building upon its mapping tool outlining geographic comparisons of Part D opioid prescription claims, CMS is calling on plans to include checks on over-utilization of opioids at the point of sale. CMS also reminds plans that beneficiaries in need of medication-assisted treatment (MAT) should not “be subject to unnecessary hurdles” and that CMS will not approve plan designs hindering access to MAT through overly restrictive management strategies or high cost-sharing.
The Agency noted that about one-third of enrollees are in Part D plans with quality rankings of at least four stars, compared to 27 percent in 2009.
Comments to the Call Letter must be submitted by March 4, and the proposal will be finalized April 4.
CMS releases “Preferred Pharmacy” access analysis
On Feb. 11, CMS Deputy Administrator Sean Cavanaugh released the Agency’s analysis of “preferred pharmacy” access, undertaken following concerns raised by the NCPA, beneficiaries, patient advocacy organizations, and Members of Congress.
In last year’s Part D Call Letter, CMS announced its plans to work with outlier plans to address access and marketing issues; require plans whose preferred cost-sharing networks are outliers to disclose this information in marketing materials; and, for each plan offering a cost-sharing structure, to publish access levels. Based upon data received, CMS has concluded that access to preferred cost-sharing pharmacies has improved, and the bottom 10th percentile of 2016 plans offer access within two miles to 71 percent of urban beneficiaries, and improvement from 40 percent in 2014. CMS noted that “Part D plans are creating smaller networks of pharmacies within their larger networks and offering lower cost-sharing arrangements to beneficiaries who use these preferred cost-sharing pharmacies… (although) in some instances, these pharmacies were not geographically accessible to the beneficiaries in the plan.”
The NCPA offered that the CMS analysis outlines progress yet still documents several plans that are “access outliers’ impacting a significant number of Medicare beneficiaries.
Obama administration’s FY2017 budget request
On Feb. 9, President Obama released his proposed Fiscal Year 2017 budget, which outlines the Administration’s policy priorities. Congress has already indicated that it will not consider the President’s budget and will be working on its own proposals over the next few months. While many of the provisions are similar to those proposed in prior years, this budget includes new provisions on drug costs and price transparency, as well as new provisions on prescription drug abuse.
Prescription Drug Abuse:
- The President’s budget proposes $1 billion in new mandatory funding over the next two years for treatment and includes $500 million to “continue and expand current efforts across HHS and DOJ to expand State-level prescription drug overdose prevention strategies, increase the availability of medication-assisted treatment programs, and improve access to the overdose-reversal drug naloxone.”
- The budget also includes $18 million in additional funding above FY2016, for a total of $85 million, for programs that support improved prescribing practices. Additionally, the budget proposal provides the Secretary of HHS the authority to establish a Part D lock-in program requiring that high-risk Medicare beneficiaries only utilize certain prescribers and/or pharmacies to obtain controlled substance prescriptions.
Drug Pricing and Price Transparency:
- The budget request contains a provision to lower reimbursement from 106 percent of the ASP to 103 percent of the ASP. If the cost exceeds the ASP plus 3 percent, the manufacturer would be required to provide a rebate such that the net cost to the provider to acquire the drug equals ASP plus 3 percent minus a standard overhead fee to be determined by the Secretary of HHS. The Secretary will also be given authority to pay a portion or the entire amount above the ASP in the form of a flat fee rather than a percentage with the modification to be made in a budget neutral manner relative to ASP plus 3 percent.
- nder the budget proposal, drug manufacturers would be required to provide rebates generally consistent with Medicaid rebate levels for drugs provided to low-income Part D beneficiaries.
- The budget request excludes brand and authorized generic drug prices from the Medicaid Federal Upper Limits.
- The budget request also calls for CMS to partner with states to negotiate drug prices through the creation of a Federal-State Medicaid negotiating pool for high-cost drugs.
- Under the budget proposal, drug wholesalers would be required to report wholesale acquisition costs to CMS. Additionally, the Secretary of HHS would be given authority to require drug manufacturers to publicly disclose certain information, including research and development costs, discounts, and other data as determined through regulation.
- The budget request prohibits companies from entering into “anti-competitive deals intended to block consumer access to generics,” grants brand biologic manufacturers seven years of exclusivity, rather than 12 under current law and prohibits additional periods of exclusivity for brand biologics due to minor changes in product formulations.
- Pricing files confirmed
- Install hardware/software
- Train pharmacy staff (ongoing)
- Receive Welcome to H. D. Smith informational packet
- Confirm delivery set up
- Test delivery completed
- Go Live