Month: February 2019

Sweeping Proposed Rule on Rebate Safe Harbor has Potential to Impact all Drug Supply Chain Stakeholders

Posted on February 8, 2019 by - Government Affairs

HHS Secretary Azar has proposed a new rule that will eliminate a Safe Harbor to the federal Antikickback Statute that provides legal protection for rebate arrangements allowing drug makers to pay PBMs to secure their drugs position on PBMs’ Medicare formularies. The goal of eliminating this Safe Harbor, and replacing with a new one, is to ultimately lower prescription drug prices for patients and Medicare and to upend the complicated structure for how drugs are priced. If passed, the proposed rule has the potential to dramatically impact pharmacies’ acquisition price and pharmacy reimbursement rates. It could also potentially alter distributor profit margins, as well as impact the commercial space. The move, while laudable, requires substantial input from stakeholders.

According to Secretary Azar, “This proposal has the potential to be the most significant change in how Americans’ drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need.” The 123-page proposed rule, however, does not address the impact on pharmacy reimbursement, the wholesale distributor model or manufacturer profits. CMS has traditionally left reimbursement rates largely to the “market forces” and has not weighed in on the diminishing pharmacy margins. This rule, if implemented without additional guidance, has the potential to further erode pharmacy margin caused by PBM spread pricing and to erode the margins of other stakeholders.

In addition to eliminating the current Safe Harbor, the proposed rule also creates a new Safe Harbor protecting discounts offered to patients at the pharmacy counter and would also protect fixed fee services arrangements between manufacturers and PBMs. The impact of such fixed fee service arrangements is another aspect stakeholders must carefully consider.

All drug supply chain stakeholders should analyze HHS’s sweeping proposed industry change. The proposed rule currently has little, if anything, to address the impact on such stakeholders, making it imperative for stakeholders to participate in Secretary Azar’s request for comment. The deadline to submit comments to HHS is April 8, 2019.

Frier Levitt Government Affairs, LLC, along with the attorneys at Frier Levitt, LLC, has scoured the rule, and gathered feedback from stakeholders ranging from retail pharmacies, specialty pharmacies, chains, distributors, national associations of providers and manufactures. We have a strong understanding of the impact of the proposed rule and are working with stakeholders to avoid unintended negative consequences.

Submitting your viewpoints will be critical since this proposal reflects a priority of the Administration. Contact Frier Levitt Government Affairs today to have your voice heard.

New FDA Proposed Rule Looking to Define the Term “Biological Product” Seeks Comments

Posted on February 6, 2019 by - Government Affairs, Specialty Pharmacy

The Food and Drug Administration (FDA) is out with a new proposed rule targeting pharmaceutical manufacturer and specialty pharmacy stakeholder interests. With the new proposed rule, the FDA is looking to amend its regulation that defines “biological product” to incorporate changes made by the Biologics Price Competition and Innovation Act of 2009 (BPCI Act), and provide an interpretation of the statutory terms “protein” and “chemically synthesized polypeptide.” Under this interpretation, the term “protein” would mean any alpha amino acid polymer with a specific, defined sequence that is greater than 40 amino acids in size. A “chemically synthesized polypeptide” would mean any alpha amino acid polymer that is made entirely by chemical synthesis and is greater than 40 amino acids but less than 100 amino acids in size.

The comment period for the new proposed rule on biologics is now open. The deadline to comment is February 25, 2019.

Biologics is a cutting-edge sector within the healthcare industry. Since biologics are not traditional drugs, they will need their own classification as they become more utilized. Reimbursement and regulatory oversight involving safety of biologics will depend on how the term “biological product” is defined in this proposed rule. Pharmaceutical manufacturers and specialty pharmacy stakeholders can participate in this decision by submitting comments. Contact Frier Levitt Government Affairs today to have your voice heard on this very important topic.

Comments Wanted: New ICER Report to Assess if Clinical Evidence Exists for Significant Increase in Prescription Drug Prices

Posted on February 4, 2019 by - Government Affairs

Public comment is being sought on the Institute for Clinical and Economic Review’s (ICER) recently posted draft protocol titled the “Unsupported Price Increase” (UPI) report. This report analyzes significant prescription drug increases and looks to determine whether or not new clinical evidence exists that could be used to support those increases. Once finalized, the protocol will guide the development of the first of these annual reports, currently scheduled for release in October 2019.

The comment period closes on February 13, 2019.

ICER is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. They are quietly becoming a strong influential force on government policy. The recent announcement of ICER’s collaboration with the Department of Veterans Affairs (VA) Pharmacy Benefits Management (PBM) Services to support VA coverage and price negotiations with drug manufacturers makes it clear that their influence on drug pricing will only continue to increase in the future.

If you are a manufacturer, GPO, wholesaler or similarly situated life science or healthcare stakeholder, it is imperative that you participate to ensure having your voice heard. Contact Frier Levitt Government Affairs today for assistance in submitting your comments for this very important policy development before the upcoming deadline.

Take Action: New CMS Proposed Rule Targeting Manufacturers, Patient Assistance Programs, ACOs, Payers and ACA Exchange Stakeholders

Posted on February 1, 2019 by - Government Affairs

The Centers for Medicare and Medicaid Services (CMS) has issued a new proposed rule targeting Accountable Care Organizations (ACOs), payers and Affordable Care Act (ACA) exchange stakeholders. The proposed rule, titled “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2020“, reflects a priority of the Administration around the Patient Protection and Affordable Care Act (PPACA) of reducing fiscal and regulatory burdens across various areas within the law. This proposed rule has several components that affect different stakeholders.

Manufacturers and Patient Assistance Program Stakeholders:

Copay accumulators are being implemented by insurance companies and Pharmacy Benefit Managers (PBMs), harming patient access. With this payor program, the value of copay assistance cards/coupons issued by manufacturers do not count towards out-of-pocket costs that are applied toward deductibles. The result has caused a cost shift onto consumers and away from employers and payers.

In this proposed rule, the Administration defends the use of copay accumulators stating:

“The availability of a coupon may cause physicians and beneficiaries to choose an expensive brand-name drug when a less expensive and equally effective generic or other alternative is available. When consumers are relieved of copayment obligations, manufacturers are relieved of a market constraint on drug prices which can distort the market and the true costs of drugs. Such coupons can add significant long-term costs to the health care system that may outweigh the short-term benefits of allowing the coupons, and counter-balance issuers’ efforts to point enrollees to more cost-effective drugs.”

“We propose, for plan years beginning on or after January 1, 2020, notwithstanding any other provision of the annual limitation on cost sharing regulation, that amounts paid toward cost sharing using any form Start Printed Page 291of direct support offered by drug manufacturers to insured patients to reduce or eliminate immediate out-of-pocket costs for specific prescription brand drugs that have a generic equivalent are not required to be counted toward the annual limitation on cost sharing. Not counting such amounts toward the annual limitation on cost sharing would promote: (1) Prudent prescribing and purchasing choices by physicians and patients based on the true costs of drugs and (2) price competition in the pharmaceutical market.”

Participating in this proposed rule is crucial for manufacturer and patient assistance programs to maintain patient access and stop unnecessary risk shifting from occurring in consumer spending.  We can help advocate your concerns.

ACOs, Payers and ACA Exchange Stakeholders:

Specifically, the proposed rule would set forth parameters and provisions related to the risk adjustment and risk adjustment data validation programs, cost sharing parameters, and user fees for Federally-facilitated Exchanges and State-based exchanges on the Federal Platform.

The proposal outlines changes that would allow greater flexibility related to the duties and training requirements for the Navigator program and proposes changes that would provide greater flexibility for direct enrollment entities, while strengthening program integrity oversight. Lastly, the proposal discusses policies that are intended to reduce the costs of prescription drugs. This includes proposed changes to Exchange standards related to eligibility and enrollment, exemptions, and other related topics.

The Administration has been making several changes to the ACA via regulation, as earlier Executive Orders described how regulatory changes would be used to make drastic reductions to the ACA. If you have an interest in the ACA or a direct one based off of an interest in the Exchanges, it is advised that you participate in this rule to ensure that your interests are represented. Not doing so will subject your organization to whatever policies may or may not arise from this rulemaking, potentially placing your organization and your priorities at a disadvantage.

Frier Levitt Government Affairs (FLGA) helps stakeholders comment on proposed regulations. FLGA understands the nuances around industry and has strategies that can help successfully communicate stakeholders’ positions to CMS.

The deadline to comment is February 19, 2019, so it is important that you contact Frier Levitt Government Affairs today to make sure your voice is heard.