Month: May 2019

Service Spotlight: Engaging in Regulatory Comments to Protect Company Operations & Margins

Proposed regulations are something that are underutilized by healthcare and life sciences supply chain entities. While legislation captures all the excitement with lobbying and either amending or passing new laws, when it comes to healthcare, the gaps legislation oftentimes leaves open-ended are left to an agency to do the details of filling in the gaps. For example, specifics on reimbursement or licensing changes are usually done by the likes of CMS, FDA, HRSA or state departments of insurance.

Changes are done via rulemaking, which are found in the federal or state register. Through proposed rules, agencies give stakeholders an opportunity to comment on a rule change, which starts a certain timed process.

Participation in agency rulemakings are key because these rules affect the finer points of your operation. Additionally, not knowing about a change in these critical rules can oftentimes result in adverse action from an agency like a fine or a warning letter if your compliance is not up to date.

Frier Levitt Government Affairs (FLGA) guides healthcare and life sciences stakeholders through the regulatory comment process. FLGA looks at your business model, monitors for proposals that will impact you, and counsels you on strategic next steps. Additionally, healthcare and life sciences stakeholders will get the benefit of working with boutique healthcare law firm Frier Levitt, LLC, who will help ensure that your company stays compliant with any news rules that are promulgated.

FLGA offers a hybrid service flexible with an organization’s changing needs. We monitor and forecast regulatory issues of importance in a concise, easy to understand and time friendly format. Our monitoring and forecasting services allow stakeholders to stay educated and engaged on new developments before the trends become mainstream.

With regulations changing all the time, it is imperative for healthcare and life sciences stakeholders and organizations to be proactive instead of reactive. Contact Frier Levitt Government Affairs today to get “in the know” and finally be prepared for regulatory changes ahead.

The Lower Health Care Cost Act: What Pharmacists and Manufacturers Need to Know

Senators Alexander (R-TN) and Murray (D-WA) of the U.S. Senate Health, Education, Labor and Pensions Committee, have introduced the introduced the Lower Health Care Cost Act as their proposal to decrease health care costs. This large piece of legislation will address issues such as surprise medical billing, prescription drug prices, and vaccine hesitancy.

The bill addresses patent protections to open markets to generic medications. In addition, the bill tackles PBM business practices by requiring PBM transparency through mandated quarterly reports from PBMs regarding fees, costs, and rebate information, as well as limits their spread pricing practices.

Senator Alexander has stated his desire for the bill to get to the Senate floor by July 2019.

With laws and regulations changing all the time, it is imperative for healthcare and life sciences stakeholders and organizations to be proactive instead of reactive.

Frier Levitt Government Affairs (FLGA) offers a hybrid service flexible with an organization’s changing needs. FLGA monitors and forecasts issues of importance for healthcare and life sciences stakeholders, including state and federal legislation and regulation, all presented in a concise, easy to understand and time friendly format. FLGA’s monitoring and forecasting services allow stakeholders to stay educated and engaged on new developments before the trends become mainstream.

Contact FLGA today to get “in the know” and start preparing for the changes ahead.

State AG Investigations Against Generic Manufacturers Demonstrate Drug Pricing Debate is Here to Stay

A coalition of over 40 state attorneys general and Puerto Rico have filed a federal lawsuit in Connecticut against several of the largest generic drug manufacturers as the coalition alleges the defendants conspired to manipulate prices for more than 100 prescription drugs that target chronic disease states such as HIV, diabetes, oncology and arthritis.

According to the lawsuit, the AGs reference how the generic pharmaceutical industry has a “fair share” agreement where they have “operated pursuant to an understanding among generic manufacturers not to compete with each other and to instead settle” for a fair share. “Rather than enter a particular generic drug market by competing on price in order to gain market share, competitors in the generic drug industry would systematically and routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market, and then maintain anticompetitively high prices.” In alleging industry discussion, negotiation and collusion among the industry over the years, the suit goes into describing Teva and other co-conspirators involvement.

Additionally, the AGs allege in the suit that, “At the zenith of this collusive activity involving Teva, during a 19-month period beginning in July 2013 and continuing through January 2015, Teva significantly raised prices on approximately 112 different generic drugs. Of those 112 different drugs, Teva colluded with its “High Quality” competitors on at least 86 of them (the others were largely in markets where Teva was exclusive). The size of the price increases varied, but a number of them were well over 1,000%.

What is interesting about this case is that this is the second one in three years that has been filed in this investigation. The first lawsuit was filed in 2016 in the U.S. District Court for the Eastern District of Pennsylvania. According to the suit, “the defendant and co-conspirators knowingly entered into and engaged in a combination and conspiracy with other persons and entities engaged in the production and sale of generic pharmaceutical products, including doxycycline hyclate, the primary purpose of which was to allocate customers, rig bids, and fix and maintain prices of doxycycline hyclate sold in the United States. The combination and conspiracy engaged in by the defendant and co-conspirators was in unreasonable restraint of interstate and foreign trade and commerce in violation of Section 1 of the Sherman Act (15 U.S.C. § 1).” That case is still ongoing as two former manufacturer executives have entered into their respective settlement agreements and are cooperating with the investigating AGs.

In addition to the aforementioned lawsuit, Congress has been active on generic drug pricing. While the Senate Finance Committee has been holding a series of hearings with Pharmacy Benefit Managers (PBMs) and manufacturers, this March the House Energy and Commerce Committee held a hearing titled, “Lowering the Cost of Prescription Drugs: Reducing Barrier to Market Competition,” where several bills were heard whose objectives where to essentially create a more consumer friendly generic marketplace.

The issue of drug price is not going away anytime soon. Frier Levitt Government Affairs (FLGA) is uniquely positioned in being a hybrid company that gives you a complete perspective. FLGA educates manufacturers and other life sciences stakeholders on legal developments, tracks and consults on state and federal policymaking, and keeps them informed on marketplace changes. If you are a manufacturer or life sciences stakeholder looking to learn more about your competitors, how your market is going to look over the next few years, or whether you can take advantage of either a law or a rule where your product is concerned, contact FLGA to learn about the options available.

Service Spotlight: Monitoring & Forecasting Keeps Healthcare and Life Sciences Stakeholders “In the Know”

Many healthcare and life sciences industry stakeholders often wish they knew about pending laws before they are enacted, why a new regulation was drafted the way it was, or why they are being asked about information from a supply chain partner on an issue they knew nothing about. Not being “in the know” raises the risk of being unprepared for an emerging law or regulation and can also hurt a business’ bottom line.

Frier Levitt Government Affairs (FLGA) offers a hybrid service flexible with an organization’s changing needs. FLGA monitors and forecasts issues of importance for healthcare and life sciences stakeholders, including state and federal legislation and regulation, all presented in a concise, easy to understand and time friendly format. FLGA’s monitoring and forecasting services allow stakeholders to stay educated and engaged on new developments before the trends become mainstream.

With laws and regulations changing all the time, it is imperative for healthcare and life sciences stakeholders and organizations to be proactive instead of reactive. Contact Frier Levitt Government Affairs today to get “in the know” and finally be prepared for the changes ahead.

Industry Monitoring Alert: CMS Delays CAR T-Cell National Coverage Determination

On May 17, 2019, CMS announced a delay in its final national coverage determination for Chimeric Antigen Receptor (CAR) T-cell therapy. Using a patient’s own immune system to attack cancer cells, CAR T-cell therapy has been getting more and more recognition as the potential next step for oncology over the last year.

According to CMS’s announcement, CAR T-cell therapy is a precision cancer treatment wherein each treatment dose is individually manufactured for the patient using their own T-cells, a type of white blood cell known as a lymphocyte. CAR T-cell therapy is a rapidly emerging adoptive cell transfer immunotherapy for select patients with relapsed or refractory cancers. Treatment protocols vary, but may be summarized in five steps:

     1. lymphocyte harvesting from the patient with cancer;

     2. creation of cancer-targeting lymphocytes in vitro using various immune modulators;

     3. selection of lymphocytes with reactivity to cancer antigens using enzyme-linked immuno-assay;

     4. depletion of the patient’s remaining lymphocytes using immunosuppressive agents;

     5. transfusion of the cancer-targeting lymphocytes back into the patient with cancer-this transfusion represents one treatment.

Frier Levitt Government Affairs (FLGA) has been monitoring developments in this sector since early 2018 and continues to follow the latest news.

FLGA’s forecasting and monitoring services help keep healthcare and life sciences stakeholders “in the know” regarding pending policy and marketplace changes. Forecasting and monitoring helps stakeholders make better strategic decisions so that they no longer just “reacting” to outside changes. Contact FLGA today for tailored forecasting and monitoring services for you and your organization.

New CMS Proposed Rule Targeting Change of Ownership Requirements for Accediting Organizations

The Centers for Medicare and Medicaid Services (CMS) has released a proposed rule targeting accrediting organizations titled: Medicare Program; Accrediting Organizations-Changes to Change of Ownership.

This proposed rule would add requirements and a specified process to address changes of ownership as they relate to the sale, transfer, and/or purchase of assets of Accrediting Organizations (AOs) with the Centers for Medicare & Medicaid Services (CMS)-approved accreditation programs. This change is intended to provide CMS the ability to receive notice when an AO is contemplating undergoing or negotiating a change of ownership and the ability to review the AO’s capability to perform its tasks after a change of ownership has occurred. This is in order to insure the ongoing effectiveness of the approved accreditation program(s) and to minimize risk to patient safety.

The deadline to submit comments to HHS July 1, 2019.

Accrediting organizations that transfer, purchase, or sell assets, it is pertinent to participate in this proposed rule to alert CMS about your abilities to perform your tasks once a change in ownership has occurred.

Frier Levitt Government Affairs works with Accrediting Organizations to participate in the comment period several different ways. Contact FLGA for help in having your voice heard.

Forecasting Alert: The Drug Rebate Rule

Frier Levitt Government Affairs (FLGA) has been made aware of a recent CBO report regarding a proposed rule on Rebate Safe Harbor. Here is what stakeholder need to know:

What is the proposed rule and what does it do?

HHS Secretary Azar proposed a new rule that will eliminate a Safe Harbor to the federal Anti-Kickback 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.

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.

What did the CBO Report Reveal About the Proposed Rule?

Earlier this month, the Congressional Budget Office (CBO) released its score of the proposal and found that the proposed rule would increase Part D premiums and federal spending by $177 billion between 2020 and 2029. Interestingly, CBO stated that it “expects that rather than lowering list prices, manufacturers would offer the renegotiated discounts in the form of chargebacks.”

Who is the CBO?

The CBO is a crucial and highly influential voice in determining how policy is developed by looking solely at the cost Congressional bill or a regulatory agency’s proposal. According to the CBO, the CBO since 1975 has been produced independent analyses of budgetary and economic issues to support the Congressional budget process. Each year the agency’s economists and budget analysis produce dozens of reports and hundreds of costs estimates for proposed legislation. The CBO is strictly nonpartisan. It conducts objective, impartial analysis and hires employees without inquiring about political affiliation. They do not make policy recommendations, and each report summarizes the method underlying the analysis.

Looking Forward

At this point the direction of the rebate rule is unknown. The comment period closed on April 8th and we are currently waiting for information from HHS. There are rumors on the Hill that due to the costs of this rule, there may be hesitation to continue forward with it. There has also been talk of a potential policy around out of pocket spending caps in Medicare Part D, as well as the discussion of drug importation in the wake of Florida’s latest legislative enactment.

With so much uncertainty in Congress and in the state legislature, it can be tempting to feel overwhelmed and not plan anything at all. While the status quo may feel comfortable, it will eventually change and you need to be ready. FLGA has its finger on the pulse of the various moving federal and state policy parts. Contact FLGA today to discuss the next steps for you or your organization.

Georgia Enacts Anti PBM Patient Steering Act

The Georgia legislature has taken an aggressive step against the PBM business practice of patient steering.

The Pharmacy Anti-Steering and Transparency Act (H.B. 233) seeks to prohibit PBM and payer owned pharmacies from filling prescriptions that were received through prohibited referrals from their PBM and insurer affiliates.

According to the new law, “the referral of a patient to a pharmacy by an affiliate for pharmacy care represents a potential conflict of interest.” Furthermore, “These referral practices may limit or eliminate competitive alternatives in the health care services market, may result in overutilization of health care services, may increase costs to the health care system, may adversely affect the quality of health care, may disproportionately harm patients in rural and medically underserved areas of Georgia and shall be against the public policy of this state.”

The enacting of H.B. 223 opens the door for other states to pass similar laws to combat PBM patient steering, among other PBM abusive practices that negatively impact independent pharmacies. Frier Levitt Government Affairs (FLGA) assists pharmacies, pharmacy associations, and other stakeholders introduce and lobby similar legislation in their states, based on their interests, priorities, and other elements not fully addressed by current laws.

Contact FLGA today to get started in putting together a solid legislative strategy.

CMS Issues New Guidance on Medicaid Spread Pricing to Attain Fairness Against PBMs

CMS has issued guidance for Medicaid Managed Care and CHIP health plans which clarify how current regulations require “spread pricing” to be accounted in the calculation of Medical Loss Ratios (MLRs), which according to CMS represents the percent of premium revenue that goes towards actual claims and activities that improve healthcare quality.

The guidance states, “CMS regulations require Medicaid and CHIP managed care plans to report an MLR and use an MLR target of 85 percent in developing rates. The 85 percent target means that only 15 percent of the revenue for the managed care plan can be for administrative costs and profits. CMS is concerned that some managed care plans are not accurately reporting pharmacy benefit spread pricing when they calculate and report MLRs.”

Spread pricing has been a negative PBM business practice against pharmacy reimbursement, primarily regarding generic prescription drugs. Several states, through auditor reports and legislative actions, are starting to see that pharmacy generic reimbursement is based on lower benchmarks that those used for Medicaid and CHIP managed care plans for the same medications.

CMS’ guidance states, “Spread pricing occurs when health plans contract with pharmacy benefit managers (PBMs) to manage their prescription drug benefits, and PBMs keep a portion of the amount paid to them by the health plans for prescription drugs instead of passing the full payments on to pharmacies. Thus, there is a spread between the amount that the health plan pays the PBM and the amount that the PBM reimburses the pharmacy for a beneficiary’s prescription. If spread pricing is not appropriately monitored and accounted for, a PBM can profit from charging health plans an excess amount above the amount paid to the pharmacy dispensing a drug, which increases Medicaid costs for taxpayers.”

Expect to see more regulation on spread pricing in the future. Louisiana’s Act 483 and Arkansas’ Act 994 have started to go after PBM spread pricing on their own, while there are many other pharmacies in other states that have not yet had legislative relief from spread pricing.

Frier Levitt Government Affairs, LLC (FLGA), working hand in hand with Frier Levitt, LLC, provides pharmacies with the appropriate legal recourse against unfair PBM business practices. FLGA can provide the strategic advice on how to get spread pricing legislation enacted into law in your state, while also offering you the lobbying tools to get it done. Contact Frier Levitt Government Affairs to get your voice heard.

Service Spotlight: Bill Check Service

When pharmacists, wholesalers, manufacturers, or physicians see a state other than their own pass a bill favorable to the life sciences or healthcare sector, they often look for ways to enact a similar law in their state. Unfortunately, copying a law from another state is not as straight forward as it seems.

When it comes to hot button issues like PBMs, for example, some states not only have legislators advocating against PBM interests, but they may also have willing regulators that will enforce the law as well. Additionally, some legislation may be written more aggressively than what a state may be used to, may not work for with laws currently on the books, or may be written in a way that invites litigation.

For life sciences and healthcare stakeholders, Frier Levitt Government Affairs (FLGA) offers a Bill Check process which examines an organization’s proposed language, verifies the correct statutes, while having it reviewed by a team of healthcare attorneys with extensive experience and hands-on industry knowledge, including many clinician attorneys.

Drafting a bill by simply borrowing language from other sources could cause issues and delay, resulting in the use of valuable political capital to fix the problem. FLGA’s Bill Check Service helps life sciences and healthcare stakeholders make the most out of their resources to get bills passed. Contact FLGA today to have your voice heard.