In the News

Branded drug prices softening big time, distributors warn

October 31, 2016 - Like a modern day Paul Revere, drug distributors McKesson ($MCK) and Cardinal Health ($CAH) are sounding a warning for the industry: price hikes are slowing, price hikes are slowing. As a result, so are their earnings. Read more

DOJ turns tables on Express Scripts, demands info on pharma deals

October 27, 2016 - Earlier this month, calls rang out for congressional pharma critics to investigate pharmacy benefits managers. Turns out the U.S. Justice Department already had one of the industry’s largest under a microscope.  Express Scripts ($ESRX) disclosed this week that the U.S. Attorney’s offices in New York and Massachusetts had demanded information about two different issues: financial ties with pharma companies, and relationships among drugmakers, patient assistance programs and the specialty pharmacies that fill prescriptions. Read more

Walgreens Plays to Win: Our Exclusive Analysis of 2017's Part D Preferred Pharmacy Networks

October 25, 2016 - Today, I examine pharmacy participation in the 2017 Part D preferred networks. Our analysis shows some pharmacies getting more selective about plan participation. Read more

Here's Why Walgreens' $9.4 Billion Deal to Buy Rite Aid Is in Jeopardy

October 19, 2016 - Looks like Walgreens Boots Alliance’s plan to buy smaller drugstore rival Rite Aid for $9.4 billion has hit a significant snag. Read more

Why These Copycat Drugs Aren’t Slashing Best-Sellers’ Prices

October 18, 2019 - Insurers and health care providers had hoped a new class of medicines called biosimilars would keep a check on high drug prices and reduce health spending in America. As it turns out, that may not be the case. Read more

FDA's new drugs director slams Sarepta, says biotech’s approval ‘NOT a good model’

October 20, 2016 - John Jenkins, who runs the FDA’s office for new meds, has not taken kindly to the regulator’s recent, and highly controversial, approval of Sarepta’s Duchenne med Exondys 51 (eteplirsen) after hitting out at bad trials with questionable data. Read more

Specialty + 340B Triggers Tumult For Stakeholders

October 11, 2016 - The “noise level” at the intersection of limited distribution drugs and the 340B pricing program has been growing louder by the year, according to Christopher Hatwig, MS, RPh, the president of Apexus. Read more

Direct from Washington

2016 Elections:

Presidential Election
With less than two weeks before the November 8 election and early voting underway in 37 states, we are finally closing in on the election of a 45th President.  As the map below shows, political experts and pollsters are predicting that Hillary Clinton will secure the 270 electoral votes needed to win the election:
Crystal Ball
U.S. Senate Elections
The Senate is currently controlled by Republicans, who hold 54 seats as compared to 46 held by Democrats and Independents.  Senators serve six-year terms, and one-third of the 100 seats are up for reelection every two years.  For this election, Republicans must defend 24 seats; Democrats need to defend 10.  If Hillary Clinton wins the Presidency, Democrats will need to win 4 additional seats to take control of the Senate, as the Vice President serves as the President of the Senate and is in the position to cast any tie-breaking vote.  If Donald Trump wins the Presidency, Democrats will need to win 5 additional seats to take control of the Senate.  Pollsters and political experts speculate that there is a good chance Democrats will win the requisite number of seats to take the majority in the Senate.

U.S. House of Representatives Elections
In the U.S. House of Representatives, Republicans currently hold 246 seats; Democrats hold 186 seats; and there are three vacancies.  Democrats would need a gain of 30 seats to unseat the Republican majority.  As the graphic below indicates, there are only 21 “toss-up” districts, making a shift in control of this chamber unlikely.

Battle for the House

The “Improving Transparency and Accuracy in Medicare Part D Spending Act” has been introduced in the House and Senate.  Senators Shelley Moore Capito (R-WV), Jon Tester (D-MT), John Boozman (R-AR), and Tom Cotton (R-AR) introduced S. 3308 on September 12.  Representatives Morgan Griffith (D-VA), Peter Welch (D-VT), Lou Barletta (R-PA), Rod Blum (R-IA), “Buddy” Carter (R-GA), Rick Crawford (R-AR), Walter Jones (R-NC), Cathy McMorris Rodgers (R-WA), and Pete Sessions (R-TX) introduced H.R. 5951 on September 8. 

The bills would prevent Part D plans or their pharmacy benefit manager (PBM) intermediaries from reducing pay to pharmacies once a clean claim has been submitted. The bills would prohibit the imposition of direct and indirect remuneration, or DIR fees, after pharmacies fill prescriptions. The bills would not prohibit “pay for performance” incentives but would provide for increased prescription drug price transparency. The National Community Pharmacists Association (NCPA) led the charge for this legislative fix after the Centers for Medicare & Medicaid Services (CMS) indicated it would not finalize proposed guidance on DIR fees in 2016.  The PBM trade association, the Pharmaceutical Care Management Association, opposes the legislation and notes that DIR fees act as a performance-based payment and help to keep beneficiary premiums down.
While the legislative time remaining in this session is likely too short for this legislation to be enacted, strong congressional support signals the importance of this issue to CMS and the Administration.
Drug Pricing
Heightened public attention and congressional interest in drug pricing have been rising over the past year.  More than 50 congressional letters have been sent, and multiple hearings took place in September on the Epi-Pen issue.  We expect congressional interest to continue through the rest of the year, but because of the limited number of legislative days remaining in 2016, we do not anticipate any substantive legislation will be enacted this year.

Drug pricing has been an issue in the presidential campaign and in various down-ballot races, and it is the subject of a California ballot initiative.  Proposition 61, known as the California Drug Price Relief Act, would prohibit the state of California from paying more for a drug than the U.S. Department of Veterans Affairs pays.  Former presidential candidate and Senator Bernie Sanders (I-VT) has come out in strong support of the measure.  The pharmacy industry has spent $109 million to defeat the initiative, but the measure may well pass.  A September poll found the initiative is supported by 50 percent of likely voters, opposed by 16 percent, with 34 percent undecided. 

The pharmaceutical industry recognizes public concerns and is preparing for continued post-election activity on drug pricing.  Allergan’s chief executive vowed to avoid “price gouging” as part of a “social contract” with the public. The “Allergan pledge” is to limit price hikes to single-digit percentages each year, although there may be years with exceptions.  News reports indicate that the pharmaceutical trade association, the Pharmaceutical Research and Manufacturers of America or PhRMA, is requiring member companies to pay an additional $100 million per year in dues.  This increase of 50% in member dues will equip the association with $300 million per year in resources to address drug pricing issues.
Outlook for “Lame Duck” Session of Congress
After the November elections, Congress is expected to be in session for a short but intense legislative period of approximately three weeks.  Before the end of the year, Congress must fund the federal government for 2017.  Members also have a number of health related priorities that may be addressed, including the “21st Century Cures” legislation to advance biomedical research and mental health legislation.  It remains to be seen whether the 114th Congress will be able to reach agreement on these health provisions or whether these priorities will be pushed into the 115th Congress, which goes into session January 2017.
Comprehensive Addiction and Recovery Act Summary
Congress did address one of its major priorities this year, with the enactment of legislation to combat opioid drug abuse.  S. 524, the Comprehensive Addiction and Recovery Act (CARA), was signed into law (Public Law 114-198) on July 22, 2016.  This comprehensive law contains a number of provisions to address opioid abuse:
  • Modify prescribing and pain management practices: 
    • To reduce the availability of opioids that could potentially be abused, CARA allows prescriptions for Schedule II drugs to be partially, rather than fully, filled, if requested by the patient or prescribing physician. 
    • CARA reauthorizes the National All Schedules Prescription Electronic Reporting (NASPER) law to support the development of state electronic prescription drug monitoring programs (PDMPs) and ensure interoperability requirements for state PDMP programs.  
    • CARA creates a Pain Management Best Practices Inter-Agency Task Force to review and recommend best practices in pain management, and CARA requires the Food and Drug Administration to seek recommendations from an advisory committee prior to approving any new opioid drugs. 
    • CARA also directs federal agencies to coordinate on expanding or making available disposal sites for unwanted prescription medications. 
  • Create and modify programs to expand access to treatment, including access to overdose reversal drugs or medication-assisted treatment to ease withdrawal symptoms:
    • CARA establishes a federal grant program to bolster state systems which permit trained pharmacists to dispense reversal drugs through the use of “standing orders” that do not require an individual-specific prescription.  CARA also establishes a federal grant program for qualified health centers and opioid treatment programs, to address opioid overdose treatment. 
    • CARA requires Medicare Part D plans to develop a drug management program to limit access for beneficiaries who are at risk for abuse.  HHS must work with Part D plans to facilitate the creation and implementation of “lock in” programs.  HHS is directed to define an at risk beneficiary using clinical guidelines developed in consultation with stakeholders.  Specific exemptions are provided for beneficiaries with cancer or other conditions for which certain controlled substances are appropriate, as well as for individuals in hospice care and in long-term care facilities with drug dispensaries contracted by a single pharmacy.
    • CARA creates a new Comprehensive Opioid Abuse Grant program to fund grants to state, local, and tribal governments that provide services related to opioid abuse.  CARA also creates a grant program for recovery community organizations. 
    • CARA amends the rules for administering medication-assisted treatment for opioid addiction, allowing qualified nurse practitioners and physician assistants – in addition to physicians -- to provide such services.  This authority expires in 2021.
  • Establishing or strengthening specific programs for targeted, vulnerable populations:
    • CARA requires that child protective services grants must include plans for addicted newborns.
    • CARA reauthorizes programs for pregnant and postpartum women who have substance abuse programs. 
  • Requires the U.S. Department of Veterans Affairs (VA) to better manage and track the use of opioids by veterans:
    • CARA requires the VA and Department of Defense to jointly update their clinical practice guidelines. 
    • CARA also requires the VA to better track opioid use by veterans and expand its opioid safety initiative to all VA medical facilities.