In the News

Adherence Challenges Differ Across Community Pharmacies

Community chain pharmacies vary in the barriers they face when implementing programs to improve medication therapy management (MTM), according to research published in the November-December 2014 issue of the Journal of the American Pharmacists Association. November 24, 2014. Read more

Compounding pharmacy back in business after suing DEA

After the Drug Enforcement Administration (DEA) revoked the Tampa-based pharmacy’s registration to sell controlled substances and seized its drugs, the company fought back with a lawsuit.

Then, on Nov.18, 2014, a judge ordered the DEA to allow the pharmacy to resume sales, according to the Tampa Tribune. Nov. 20, 2014. Read more

In the third quarter, retail generic drug inflation kept on truckin’

This Thursday, the Senate Subcommittee on Primary Health and Aging, currently led by U.S. Senator Bernie Sanders (I-VT), will hold a hearing titled “Why Are Some Generic Drugs Skyrocketing In Price?”  Nov. 18, 2014. Read more

Dayton a test market for Rite Aid medical kiosks

The Dayton region is serving as a test market for new medical kiosks at Rite Aid stores. Nov. 18, 2014. Read more

Target opens new clinics with Kaiser Permanente

Beginning this week, Target Corp. plans to launch Target Clinics in Southern California in partnership with health care and benefits provider Kaiser Permanente. Nov. 17, 2014. 

Antitrust Institute warns CVS anti-tobacco policy may be a smokescreen for exclusion of rivals

The American Antitrust Institute (AAI) last week called on the Federal Trade Commission (FTC) to investigate CVS Health Corp.’s new policy of imposing co-pays on customers who use health insurance to fill prescriptions at pharmacies that also sell cigarettes and other tobacco products. Nov. 11, 2014. Read more. 

Direct from Washington

Implementation of the Drug Supply Chain Security Act (DSCSA)

The Food and Drug Administration (FDA) continues to implement the DSCSA, which was enacted Nov. 27, 2013 and which dictates significant changes, effective Jan. 1, 2015. 

Most recently, the agency published a draft guidance titled “The Effect of Section 585 of the FD&C Act [Federal Food, Drug, and Cosmetic Act] on Drug Product Tracing and Wholesale Drug Distributor and Third-Party Logistics Provider Licensing Standards and Requirements: Questions and Answers” (October 2014). Section 585 addresses the relationship between federal and state-level laws, and requires nationally uniform requirements in many (but not all) areas. Interested parties may comment on FDA’s draft guidance through Dec. 8, 2014. The draft guidance describes FDA’s interpretation how Section 585 applies with regard to product tracing and licensing requirements:

  • Product Tracing:  Since the time of DSCSA enactment, states have been preempted from establishing or continuing in effect any requirements for tracing prescription drugs through the pharmaceutical supply chain that are inconsistent with, more stringent than, or in addition to any requirements under federal law (including any waivers, exceptions, or exemptions granted by FDA). Until Jan. 1, 2015, the longstanding federal pedigree requirements established under the Prescription Drug Marketing Act will provide the national standard; however, on and after January 1, 2015, the new DSCSA standards take effect across the U.S. FDA describes the scope of product tracing requirements subject to Section 585 (national uniformity) to include: statements of distribution history, transaction history, transaction information, or transaction statement of a product as the product changes ownership in the supply chain, verification, investigation, disposition, notification, or recordkeeping related to the distribution systems. 
  • Licensure: FDA’s draft guidance also states that state laws have been preempted since Nov. 27, 2013. However, for licensing requirements, the law preempts state-level requirements that are “inconsistent with, less stringent than, directly related to, or covered by” the standards under federal law. It remains somewhat unclear how the DSCSA standards for licensure will apply against individual state laws in the short-term. FDA is obligated to issue new regulations concerning wholesale drug distributor licensure by November 2015. (Currently, FDA anticipates the publication of proposed rules during March 2015.) In the draft guidance, FDA states that it is unlikely states will need substantive changes to conform with the federal minimum standards for wholesale drug distributor licensure. 

The licensing impact on third-party logistics providers (a new regulatory classification created by DSCSA) is less clear. By November 2015, FDA is obligated to issue regulations concerning the minimum standards for licensing 3PLs. In the meantime, 3PLs are deemed to be licensed for certain purposes, and the states are expressly not authorized to regulate 3PLs as wholesale distributors.  The draft guidance provides FDA’s position that states can have separate 3PL licensing programs prior to the establishment of federal regulations, as long as the requirements are not less stringent than federal law. 

Congressional Investigation into Generic Drug Price Increases

On Nov. 20, the Senate Health, Education, Labor and Pensions Subcommittee on Primary Health and Aging will hold a hearing titled “Why Are Some Generic Drugs Skyrocketing In Price?” The hearing stems from an Oct. 2 inquiry launched by Primary Health and Aging Subcommittee Chairman Bernie Sanders (I-VT) and Representative Elijah Cummings (D-MD), Ranking Member of the House Oversight and Government Reform Committee. Senator Sanders and Representative Cummings sent letters to 14 generic drug manufacturers, requesting information about the increasing price of generic drugs.  Companies receiving letters were: Actavis plc; Apotex Corp.; Dr. Reddy’s Laboratories Ltd.; Endo International plc; Global Pharmaceuticals; Heritage Pharmaceuticals Inc.; Lannett Company, Inc.; Marathon Pharmaceuticals, LLC; Mylan Inc.; PAR Pharmaceutical Companies Inc.; Sun Pharmaceutical Industries, Inc.; Teva Pharmaceutical Industries Ltd.; West-Ward Pharmaceutical Corp.; and Zydus Pharmaceuticals USA Inc.  The letters referenced findings of the National Community Pharmacists Association that “77 percent of pharmacists reported 26 or more instances over the past six months of a large upswing in a generic drug’s acquisition price,” as well as pharmacists reporting patients are “declining their medication due to increased co-pays.” 

The Generic Pharmaceutical Association (GPhA) contends that such charges are focused on a narrow set of drugs and notes that drug pricing is influenced by a variety of supply chain stakeholders including purchasing organizations, pharmacy benefit managers, and distributors. GPhA also notes that generic drugs overall have saved hundreds of billions of dollars each year. 

Senator Sanders and Representative Cummings sent a letter to Health and Human Services Secretary Sylvia Burwell Oct. 16, calling on her to take action to address the “staggering increases” in generic drug prices. According to public reports, the Department of Justice has also shown an interest in investigating the issue. 

CMS issues, then pulls back on guidance on Part D price concessions

On Nov. 6, CMS announced that, for 2016, it would not finalize draft guidance titled “Direct and Indirect Remuneration (DIR) and Pharmacy Price Concessions.” The draft guidance, released at the end of September, proposed that Part D sponsors report price concessions negotiated with pharmacies, to include all price concessions that “can reasonably be approximated at the point of sale.” CMS noted that “most pharmacy price concessions can reasonably be determined at point of sale and, therefore, should be reported through the negotiated prices.”

Both the National Community Pharmacists Association (NCPA) and National Association of Chain Drug Stores (NACDS) praised the draft guidance for increasing transparency, which would allow beneficiaries to compare Part D plans. However, pharmacy benefit managers charged that the guidance was a dramatic shift in Part D policy that violated the “non-interference clause” of the Social Security Act and would result in increased drug costs for beneficiaries.

In withdrawing its draft guidance, CMS stated that it will evaluate which pharmacy concessions and incentive payments “can and cannot be reasonably determined at the point of sale” and would develop guidance on the issue for 2017 and beyond. CMS asked that stakeholders provide specific examples of such concessions that can or cannot be reasonably reported at the point of sale; comments are due by Jan. 15, 2015.  

Impact of November Elections

The Nov. 4 elections saw the Republican party win control of the U.S. Senate, increase its majority in the U.S. House of Representatives, and increase its majority of governorships. Of particular note was the election of Buddy Carter (R-GA), who will become the only pharmacist in the U.S. Congress.

In the Senate, Republicans gained eight seats for a 53-44 majority (not including two Independents who traditionally caucus with the Democrats). One more race has yet to be decided, potentially yielding a net pickup of nine seats and increasing their majority to 54-44. Louisiana will hold a runoff election Dec. 6.

The leadership of the Senate committees with jurisdiction over health policy issues will change substantially. Senator Orrin Hatch (R-UT) will take over the chairmanship of the Finance Committee, and current Chairman Ron Wyden (D-OR) is expected to become the ranking Democrat. On the Health, Education, Labor and Pensions Committee, Senator Lamar Alexander (R-TN) will take over from retiring Chairman Tom Harkin (D-IA). Senator Patty Murray (D-WA) is expected to become the ranking Democrat on the Committee.  

In the House, Republicans picked up a net total of 12 seats, with five races – including two in Louisiana heading to a runoff on Dec. 6 – not yet decided. Republicans increased their majority to at least 244, their largest since 1928. 

Representative Fred Upton (R-MI) will continue as Chairman of the Energy and Commerce Committee.  Energy and Commerce Committee Democrats are losing Representatives John Dingell (D-MI) and Henry Waxman (D-CA) to retirement, and House Democrats have selected Representative Frank Pallone (D-NJ) to be the ranking Democrat. Current Ways and Means Committee Chairman Dave Camp (R-MI) is retiring at the end of the year, and Paul Ryan (R-WI) has been selected to lead the Ways and Means Committee in the next Congress. Ranking Member Sander Levin (D-MI) will remain as the ranking Democrat.

Across the governors’ mansions, Republicans increased their current majority, adding four states for a total of 31 Republicans, 17 Democrats, one Independent, and one race yet to be decided. The results of the gubernatorial races are expected to translate into a slowing of Medicaid expansion under the Affordable Care Act (ACA). Each of the governors from the non-Medicaid expansion of Maine, Florida, Kansas, Wisconsin, and Georgia won reelection. In Arkansas, Republican Asa Hutchinson was elected to replace Democratic Governor Mike Beebe, a champion of that state’s “private option” Medicaid expansion. Because this “private option” must be reauthorized by a 75 percent majority of the Arkansas legislature each year, this expansion may be curtailed.  

Congress will hold a short “lame duck” post-election session to wrap up legislation for the year.  Major priorities include funding the government and passage of so-called “tax extender” provisions already expired or set to expire.  For the new Congress, we anticipate an early vote to repeal the ACA, but there are not sufficient numbers to override a veto by President Obama.  There may be new opportunities to amend selected portions of the ACA, such as repealing the medical device tax or addressing the 30 hour work week trigger for employer coverage.  

Beneficiaries, Pharmacists, Health Plans Urge Greater Flexibility in Medication Therapy Management (MTM) Programs

In response to an October CMS Innovation Center Request for Information (RFI), beneficiary advocates, health plans, and pharmacists urged CMS to address problems with MTM programs and offered suggestions to encourage greater participation.  NCPA and NACDS agreed that pharmacists could look at specific diseases where beneficiaries might best be helped by MTM.  NCPA urged that community pharmacists be permitted to select beneficiaries for enrollment in a MTM following a qualifying event such as a recent hospitalization, any transition of care, or side effects from medications.  Additional data such as chronic medication ratios, number of medications within a particular class, new therapies in high risk categories, or the use of more than three chronic medications would also help target the beneficiaries who would be helped most by MTM.  NCPA proposed an incentive payment for pharmacists, following good outcomes within 3-6 months of a beneficiary’s enrollment in a MTM.  NACDS suggested that CMS launch a demonstration program expanding the MTM benefit to individuals with a single chronic health condition.     

America’s Health Insurance Plans (AHIP) urged that Part D plans be able to use data analysis to pinpoint which beneficiaries would be helped most by MTM, along with accessing Medicare Part A and B claims data for use in their MTM programs.  AHIP proposed that beneficiaries be given incentives to opt in to MTM programs and Part D plans should receive bonuses for achieving higher quality, better rates of medication adherence, or reduced health costs. 

The Medicare Rights Center (MRC) reported a general lack of understanding about the MTM benefit among Medicare beneficiaries and supported additional MTM flexibility for plans meeting current program requirements.  MRC suggested that any enhanced MTM demonstration project be restricted to plans rated four stars or higher.  MRC also cautioned that financial incentive programs may lead to beneficiaries being inappropriately steered to plans participating in any CMS demo, or to plans using bonuses to cherry pick the healthiest beneficiaries for participation. 

Government Accountability Office (GAO) Reports Payment Practices for Compounded Drugs Vary Across Medicare, Medicaid, and Private Health Insurers

Members of Congress have raised questions regarding whether federal health care program payment practices have incentivized providers to prescribe compounded drugs and requested the GAO investigate and report on payment practices.  In reviewing payment policies of CMS, the five largest state Medicaid programs, the five largest insurers offering Medicare and Medicaid managed care plans as well as private plans and the two largest Part D only sponsors, GAO found that payment policies varied depending on whether the compounded drug ingredients could be identified.  GAO found that, while CMS has a national payment policy for Medicare Part B compounded drugs, the policy is unclear and may result in payment for ingredients that are not FDA-approved. 

GAO also noted that other factors influence the use of compounded drugs, such as insurer requirements limiting the compounded drugs to only FDA-approved product ingredients, individual patient need, and drug shortages. 

The GAO report can be accessed here