The Centers for Medicare and Medicaid Services (CMS) has issued a notice in the Federal Register on the previously debated home infusion rule. The rule originally proposed in July focused primarily on two sections, “Requirements for Home Infusion Suppliers” and “Accreditation for Home Infusion Therapy Suppliers.” The rule as written has the potential to drive Medicare and Medicaid beneficiaries to more hospitals and nursing home visits, thus increasing costs.
The “Requirements for Home Infusion Suppliers” section has caused the most industry concern since it includes definitions for an infusion drug administration calendar day and the required services of a home infusion supplier. This part of the rule states:
“Therefore, we proposed to define in regulation that ‘infusion drug administration calendar day’ refers to payment for the day on which home infusion therapy services are furnished by skilled professional(s) in the individual’s home on the day of infusion drug administration. As we stated in the proposed rule, we believe this to mean skilled services as set out at 42 CFR. 409.32. This regulation states that the skilled services furnished on such day must be so inherently complex that they can only be safely and effectively furnished by, or under the supervision of, professional or technical personnel.”
The new final rule also describes how CMS will maintain its prior proposed limit on reimbursement to “the day on which home infusion therapy services are furnished by skilled professionals in the individual’s home.” Additionally, the final rule summarizes the case-mix methodology refinements for home health services beginning on or after January 1, 2020, which includes the elimination of therapy thresholds for payment and a change in the unit of payment from a 60-day episode to a 30-day period. These final rule changes are materially negative to private home infusion companies.
Fortunately, CMS is allowing the industry one last chance to issue comments on this final rule. The comment period ends on December 31, 2018.
This is the industry’s last opportunity to voice concerns to CMS regarding the negative impact of this final rule. Frier Levitt Government Affairs, LLC (FLGA) can help practices formulate their concerns to send to CMS, as well as help create a strategy if CMS maintains its position. Contact FLGA today to plan your next steps before the December 31st deadline.
The Centers for Medicare and Medicaid Services (CMS) has announced a new payment model that seeks to reduce out of pocket costs for patients. This payment model arises out of the Administration’s American Patients First Blueprint that was released earlier this spring. CMS is providing this notice of its new proposed payment model via an Advance Notice of Proposed Rulemaking, meaning the formal proposed rule will be introduced in the immediate future.
CMS’ proposal to lower drug prices will be in three stages. First, the agency will be introducing the “international pricing index” (IPI payment model) where Medicare’s payments for select physician-administered drugs covered under Part B would shift to a level more closely aligned with prices in other countries. Overall savings for American taxpayers and patients are projected to total $17.2 billion over five years. The IPI model would apply to 50 percent of the country, and would cover most drugs in Medicare Part B, which includes physician-administered medicines such as infusions. The model would draw on HHS analysis comparing the U.S. against 16 other nations to benchmark the selected drugs against.
Secondly, taking recommendations from MedPAC, the Administration will experiment with having private sector vendors negotiate with manufacturers for drug prices under the Medicare Part B program, to mimic how payers negotiate drug prices under Medicare Part D. This approach will be piloted in certain geographic areas where there will be mandatory participation for physicians and hospitals. Vendors under this proposal would aggregate purchasing, seek volume-based discounts, and compete for providers’ business, creating a competitive marketplace.
Lastly, CMS is attempting to change prescribing incentives for physicians to prescribe lower costs medications. Under CMS’ proposal, physicians will be transitioning away from a percentage reimbursement to a flat fee. This is mirrored on the reimbursement discussed under the previous Administration’s vision of a flat fee for oncologists, and an idea that has been consistently advocated since by MedPAC.
Impacted Stakeholders
CMS’ payment model policy shifts have the ability to severely impact several key stakeholders in the healthcare continuum, including:
– Manufacturers
– Wholesalers
– GPOs
– Hospitals
– Oncology Physicians
– Infusion Providers
– Healthcare providers administering medications covered under Part B
Frier Levitt Government Affairs (FLGA) helps clients and prospective clients identify opportunities and threats to your business models including changes to your reimbursement. With the backing of national boutique healthcare law firm Frier Levitt, LLC, FLGA can provide clients with in-depth comments to CMS on why this will have a negative effect on impacted stakeholders. Even though this proposal is planned for 2019 or 2020, it is essential for stakeholders to start planning their responses now to ensure that their voices are heard. Contact Frier Levitt Government Affairs today to get started.
With the continued policy dialogue on how rising drug costs impact patient access, the theoretical cost savings that biosimilar medications may offer is intriguing to many policymakers as well as those in the industry. A recent IMS Institute Report found several interesting points regarding the potential of biosimilars:
– By 2020, biosimilars will start competing with original biologics that currently have sales of $50 billion annually.
– Biosimilar use in the European Union and United States may yield total savings of $56 to $110 billion over the next five years.
– Within three years, eight major biologic medicines are expected to lose exclusivity protection, including treatments for autoimmune disorders and diabetes.
– Healthcare systems, by opening markets to biosimilar competition, could realize a 30 percent reduction in price per treatment day compared with originator biologics.1
As the conversation about biosimilars and their potential cost savings continues, let’s examine what the U.S. Department of Health and Human Services (HHS), the Food and Drug Administration (FDA), and Congress have been doing recently to chart the developing course of biosimilar policies.
Trump Administration Takes Steps To Encourage Biosimilar Uptake
This spring, the administration released its blueprint to lower drug prices, “American Patients First,” which featured a discussion of greater biosimilar utilization. The blueprint called for key reforms in four areas: (1) improved competition, (2) better negotiation, (3) lower list prices, and (4) reduced out-of-pocket costs.
Unfortunately, we have yet to see any legislation out of the blueprint, but this could be due to where we are on the legislative calendar. Normally, toward the end of the year in a non-presidential election year, legislative activity tends to slow down, with only the most politically important issues maintaining momentum. Regardless of who wins control of Congress this fall, we could see much more biosimilar legislation driven by the blueprint, as well as the FDA, which continues to push for a cheaper prescription drug marketplace. This should be easier in 2019, as we will be more removed from election-driven politics.
Notwithstanding this, the blueprint described some actions that the Secretary of Health and Human Services can take to accomplish greater biosimilar utilization. According to the blueprint, thus far the administration has:
– Finalized “a policy in which each biosimilar for a given biologic gets its own billing and payment code under Medicare Part B, to incentivize development of additional lower-cost biosimilars. Prior approaches to biosimilar coding and payment would have created a race to the bottom of biosimilar pricing, while leaving the branded product untouched, making it an unviable market that few would want to enter.”
– Finalized “changes to the Medicare Prescription Drug Program in the 2019 Part C and Part D regulation,” allowing Medicare beneficiaries receiving low-income subsidies to access biosimilars at a lower cost.
The blueprint also alerted us to actions HHS may take as it continues to solicit comments on other policies it has under active consideration. One point to note is the difference between this administration and the last. The current administration has had its agencies rely more on requests for information rather than opting for the formalities within the regulatory process of proposing a rule.
A request for information is a tool used by agencies to solicit comments from interested stakeholders to provide the agency with the necessary technical aspects of complex topics. This allows agencies to determine if a formal rulemaking process will be promulgated on certain commonly commented on points. In this case, the comment period for the request for information ended in July 2018, with HHS currently reviewing the comments received. There is no anticipated date for next steps, so the public will have to wait until the next stage before discovering what the major points of interest are from the industry.
Specifically, HHS is seeking clarity from the industry on the following issues:
– Promoting innovation and competition for biologics. The FDA will issue new policies to improve the availability, competitiveness, and adoption of biosimilars as affordable alternatives to branded biologics. The FDA will also continue to educate clinicians, patients, and payers about biosimilar and interchangeable products as it seeks to increase awareness about these important new treatments.
– Samples for biosimilars and interchangeables. What actions should be considered to facilitate access to reference product samples by these companies?
– Resources and tools from the FDA: What specific types of information resources or development tools would be most effective in reducing the development costs for biosimilar and interchangeable products?
– Improving the Purple Book. What additional information could be added to increase the utility of the Purple Book?
– Educating providers and patients. What types of information and educational resources on biosimilar and interchangeable products would be most useful to healthcare professionals and patients to promote understanding of these products? What role could state pharmacy practice acts play in advancing the utilization of biosimilar products?
– Interchangeability. How could the interchangeability of biosimilars be improved, and what effects would it have on the prescribing, dispensing, and coverage of biosimilar and interchangeable products?
While all of these topics are important, in my opinion solid policies on interchangeability, biosimilar education, and formulary coverage would serve industry the best. First, having the clarity on whether interchangeability is feasible and what those points are will likely determine the speed at which we will see more biosimilars introduced into the marketplace. Second, educating physicians, pharmacists, and patients about the benefits of biological products will go a long way in ensuring marketplace comfort with these new protein-based medications. Last, understanding how payers and pharmacy benefit managers will manage these products is key in determining whether biosimilars will have an immediate impact on costs. Will payers and PBMs place these medications on higher tiers? How will rebates effect biosimilar utilization? Knowing this will help industry stakeholders determine their relevant pricing strategies to stay ahead of this emerging market.
Thus far, the FDA has been vocal about increasing biosimilar utilization as well. This summer witnessed FDA Commissioner Gottlieb release his Biosimilar Action Plan that addressed four key areas:
– Improving the efficiency of the biosimilar and interchangeable product development and approval process
– Maximizing scientific and regulatory clarity for the biosimilar product development community
– Developing effective communications to improve understanding of biosimilars among patients, providers, and payers
– Supporting market competition by reducing gaming of FDA requirements or other attempts to unfairly delay market competition to follow-on products
Additionally, the industry is closely watching the FDA’s direction for interchangeability, an important policy topic to address for market clarity, as it discusses how a biosimilar can be substituted for the brand biologic. Currently, there are still no interchangeable biosimilars, as the FDA continues to consider how to determine what biosimilar can be interchangeable with a particular biologic. At this point in time, it remains unclear when the industry will receive an answer on this.
Congressional Proposals On Biosimilars
So, what is Congress doing to address biosimilars? Congress has a few bills directly on point (listed below); however, it is questionable whether any of these will move due to the lateness of the legislative calendar.
– H.R. 6478, The Biosimilars Competition Act of 2018, seeks to enhance competition for prescription drugs by increasing the ability of the Department of Justice and the Federal Trade Commission (FTC) to enforce existing antitrust laws regarding biologic and biosimilar products. The act as proposed would essentially require biologic and biosimilar manufacturers to report “pay for delay” agreements, which are deals between biologic and biosimilar companies that ensure lower-cost medications are kept off the market for a certain time period. These deals, which have been frowned upon by the FTC and Congress, allow innovator companies to pay generic, or in this case biosimilar, companies not to bring cheaper alternatives to the market for a specified time. The federal government has been aggressively attacking these agreements as harmful to patient access to cheaper alternatives.
– S. 974/H.R. 2212, The Creating and Restoring Equal Access to Equivalent Samples Act of 2018, seeks to promote competition in the market for drugs and biological products by facilitating the timely entry of lower-cost generic and biosimilar versions of those drugs and biological products. This is another example of Congress going after pay for delay agreements to make more affordable drugs accessible to patients, assuming that biosimilar prices are proven to be consistently lower the biologics.
– H.R. 2051, FAST Generics Act of 2017, seeks to amend the Federal Food, Drug, and Cosmetic Act to ensure that eligible product developers have competitive access to approved drugs and licensed biological products, so as to enable eligible product developers to develop and test new products, and for other purposes. This bill is along the same theme as the aforementioned, as this bill echoes the attempt to provide patients access to lower-priced medications.
At this point, it seems that the Creating and Restoring Equal Access to Equivalent Samples Act of 2018 has the best chance of passing before the end of 2018, as it has been receiving the most favorable attention on Capitol Hill for quite some time. As mentioned above, however, the upcoming midterm elections make this highly unlikely.
It is very likely that we will see legislation addressing greater biosimilar utilization — either in the form of reintroduction of this session’s bills or entirely new bills — next year, regardless of who controls the House and Senate. However, with the uncertainty surrounding the midterms, it is difficult to predict which bills will emerge as “winners” next year. I also do not foresee any biosimilar policy development slowdown from either HHS Secretary Azar or FDA Commissioner Gottlieb, as greater biosimilar utilization remains a priority for them as a means to achieve lower prescription drug prices.
