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Radar On Market Access: Senate Drug Pricing Legislation Takes Wide-Reaching Approach

August 8, 2019

While there is certainly no shortage of proposals on drug pricing from the administration, a proposed Senate bill is taking a multipronged approach to the issue. The Prescription Drug Pricing Reduction Act (PDPRA) of 2019, introduced by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), proposes multiple changes to Medicare Part B and Part D, as well as Medicaid. According to a preliminary estimate by the Congressional Budget Office (CBO), 10-year savings to the federal government would total more than $100 billion, AIS Health reported.

While there is certainly no shortage of proposals on drug pricing from the administration, a proposed Senate bill is taking a multipronged approach to the issue. The Prescription Drug Pricing Reduction Act (PDPRA) of 2019, introduced by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), proposes multiple changes to Medicare Part B and Part D, as well as Medicaid. According to a preliminary estimate by the Congressional Budget Office (CBO), 10-year savings to the federal government would total more than $100 billion, AIS Health reported.

Proposals within the bill include caps on drug price increases in both Part B and Part D, as well as caps on out-of-pocket (OOP) spend for beneficiaries via a complete restructuring of Part D. It also proposes including patient coupons within the average sales price calculation, boosting the add-on payment for a Part B biosimilar from 6% of the reference drug’s ASP to 8% for a five-year period and banning spread pricing in Medicaid.

The CBO’s preliminary estimate shows 10-year savings of $85 billion in Medicare and $15 billion in Medicaid, as well as $32 billion in beneficiary savings.

“Rebates seem to drive a significant amount of savings,” notes Lisa Kennedy, Ph.D., chief economist at Innopiphany, LLC, “but it is hard to see from the CBO analysis if that is from overall price reductions or from the actual rebates that pharmaceutical manufacturers would have to pay.”

“I think what is interesting is the bill managed to capture many of the issues that have been contentious in the public debate recently,” says Jeremy Schafer,

Pharm.D., senior vice president, director, access experience team at Precision for Value. “If you look across the health care marketplace, it seems as though almost everyone is affected in one way or another.”

“The bill presents a huge push towards incentivizing biosimilars in a lot of different ways,” observes Kennedy. She also contends that the OOP cap on Medicare expenditures “is an important patient-centered change.”

Another aspect of the proposal would require PBMs “to become more transparent and share information on the HHS website regarding aggregate discounts,” notes Schafer. “As transparency requirements grow, the PBM business model will be challenged and need to adapt.”

Radar On Market Access: Congress Eyes Measures That Could Affect PBMs

August 6, 2019

Now that the Trump administration has abandoned its bid to overhaul the Medicare Part D drug rebate system, all eyes are on what Congress will do to address the ever-vexing problem of high drug prices, AIS Health reported.

Now that the Trump administration has abandoned its bid to overhaul the Medicare Part D drug rebate system, all eyes are on what Congress will do to address the ever-vexing problem of high drug prices, AIS Health reported.

While some ideas lawmakers are considering could be very problematic for PBMs, industry analysts are dubious about their prospects. Other less-drastic changes, though, could make it into law.

“The bottom line is [that] the most hurtful, the most damaging proposals, at least looking at it from a PBM perspective, we do not think that they will pass,” says Ji Liu, an analyst for the credit rating firm Standard & Poor’s (S&P). Liu and his colleagues recently released a report that analyzes how a handful of health care reform proposals might affect PBMs’ creditworthiness.

One proposal discussed in the report that has since become a more concrete possibility is a package of drug-pricing reforms from the Senate Finance Committee, which includes provisions that put inflation caps on Medicare Part D and Part B prices.

“Depending on how the maximum allowable inflation limit is set, we could see some modest pressure for PBMs,” which generally benefit from higher branded drug inflation because part of their revenue is tied to the list price, S&P’s report says.

In addition to the inflation caps and a slew of other provisions, the Senate Finance Committee’s drug-pricing bill would implement an out-of-pocket spending cap in Part D.

Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors, says it makes sense for Congress to enact a policy that directly affects consumers’ out-of-pocket drug costs.

“Whatever policy comes to pass will focus on changing the price point that the consumer experiences,” he says, adding, “it’s a simpler lift that gets a lot of political gain.”

MMIT Reality Check on Merkel Cell Carcinoma (Aug 2019)

August 2, 2019

According to our recent payer coverage analysis for Merkel cell carcinoma treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for Merkel cell carcinoma treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for Merkel cell carcinoma treatments shows that under the pharmacy benefit, about 27% of the lives under commercial formularies are covered with utilization management restrictions.

Trends: In December 2018, the FDA gave accelerated approval to Keytruda (pembrolizumab) for use in adult and pediatric patients with recurrent locally advanced or metastatic Merkel cell carcinoma.

Radar On Market Access: Can Louisiana’s Hepatitis C Drug Payment Model Be Replicated?

August 1, 2019

Beginning last month, Louisiana has been able to treat hundreds of patients who were waiting to receive a pricey cure for hepatitis C thanks to after hammering out an innovative payment model with a drug manufacturer, AIS Health reported.

Beginning last month, Louisiana has been able to treat hundreds of patients who were waiting to receive a pricey cure for hepatitis C thanks to after hammering out an innovative payment model with a drug manufacturer, AIS Health reported.

But the road to get there was long and difficult, according to Rebekah Gee, M.D., secretary of the Louisiana Dept. of Health, who, during a July 22 event hosted by the Brookings Institution, detailed the challenges she faced in trying to get a costly curative therapy to more people while facing down a $2 billion budget deficit. “We were told ‘No’ at least 50 times from a variety of people, whether it was the industry, or policymakers or individuals at the CDC…because it had never been done before,” she said.

Here’s how the “modified subscription model” works: The state pays a fixed amount to Asegua Therapeutics LLC, a subsidiary of Gilead Sciences, Inc., for the authorized generic of Epclusa (sofosbuvir/velpatasvir tablets), up to a set spending cap, and in return gets unlimited access to the therapy for Medicaid beneficiaries.

For states that want to successfully replicate what Louisiana has done, not only do they need a solid partnership with CMS, but they must understand that price is not the only barrier to expanding treatment, said Neeraj Sood, a professor at the University of Southern California, who helped develop the model.

“Even if you make the price zero, you have to figure out how to test everyone, link them to care, make sure they adhere to therapy — and that’s no small task,” he said.

Trends That Matter for CMS’s Oncology Care Model

August 1, 2019

CMS’s Oncology Care Model (OCM) is about halfway through its five-year pilot. Developed by the CMS Center for Medicare & Medicaid Innovation, the voluntary pilot is aimed at providing better quality and more coordinated cancer care for Medicare fee-for-service beneficiaries, as well as other payers, while at a lower cost.

CMS’s Oncology Care Model (OCM) is about halfway through its five-year pilot. Developed by the CMS Center for Medicare & Medicaid Innovation, the voluntary pilot is aimed at providing better quality and more coordinated cancer care for Medicare fee-for-service beneficiaries, as well as other payers, while at a lower cost.

One criticism of the model is that providers’ costs are compared with targeted costs that are based partly on their spending from 2012 to 2015, the OCM baseline period. When the actual costs come in below the targeted costs, that earns providers a performance-based payment. But with so many costly oncology therapies launching after the baseline period, this is making it hard for providers to gain a performance-based payment, AIS Health reported.

That was the focus of a poster presentation by Tennessee Oncology at last month’s American Society of Clinical Oncology meeting. Researchers maintained that “when avoidable inpatient, post-acute, and emergency department (ED) costs are minimized, a practice’s actual costs should be lower than target costs, allowing practices the opportunity for shared and performance-based savings. However, we hypothesized that the ability for an oncology practice to successfully meet target costs may be hampered by the skyrocketing prices of novel therapy drugs implemented into clinical practice after baseline period cost calculations.”

They examined Tennessee Oncology patients with non-small cell lung cancer (NSCLC) and bladder cancer treated during the second performance period (January through June 2017). Among researchers’ findings:

The researchers concluded that the use of expensive novel therapies in concordance with NCCN guidelines in indications approved after the OCM baseline period “poses significant challenges to practices. Future value-based care initiatives in oncology need more accurate ways to account for rising drug costs and expanding treatment indications to prevent penalties for following guideline appropriate care.”