Tag: drug prices

New York State Senate Releases Final Investigative Report on PBMs In New York

Posted on June 4, 2019 by - Government Affairs

New York State Senator James Skoufis, Chair of the Senate Committee on Investigations & Government Operations, in coordination with Senator Gustavo Rivera, Chair of the Senate Committee on Health, has released the Final Investigative Report: Pharmacy Benefit Managers in New York. The report comes after the Committee opened an investigation into the practices of Pharmacy Benefit Managers (PBMs) in New York State in January 2019.

Some key findings of the report include:

•  One of the key mechanisms by which PBMs generate revenue is through spread pricing
•  The lack of transparency and oversight of PBMs has created an environment in which PBMs are able to engage in self-dealing to the detriment of consumers across New York State
•  New York State must take immediate action to regulate the practices of spread pricing, MAC appeals, mail order operations, and reimbursements
•  The New York State Comptroller should perform a full audit of all dollars paid to PBMs via spread pricing

Legislative recommendations provided by the report include:

•  Regulate the practices of spread pricing in all pharmacy benefit contracts
•  Enhance the transparency of MAC appeals
•  Require the licensing and registration of PBMs to enhance accountability and oversight by instituting a fiduciary duty for their clients
•  Prohibit PBMs from mandating that patients use specialty and mail order pharmacies
•  Providing for the adequate and transparent reimbursements for pharmacies
•  Require PBMs to pass-through all discounts or rebates received from drug manufacturers to its Medicaid managed care clients

This is definitely not the last time New York, or any other state, will develop policies to help regulate abusive PBM practices. Frier Levitt Government Affairs (FLGA) is constantly monitoring new state PBM policies and working with pharmacy stakeholders nationwide to have their voices heard.  Contact FLGA today to learn more about getting involved.

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

Posted on May 24, 2019 by - Government Affairs

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.

HHS’ Final Rule Requiring Drug Prices in TV Advertising Presents an Opportunity for Manufacturers

Posted on May 14, 2019 by - Government Affairs

Earlier this month, Health & Human Services (HHS) Secretary Azar announced a final rule from the Centers for Medicare & Medicaid Services (CMS) requiring direct-to-consumer television advertisements for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price – the Wholesale Acquisition Cost – if that price is equal to or greater than $35 for a month’s supply or the usual course of therapy. This policy comes from the American Patients First Blueprint to reduce drug costs.

Lately, the culprit behind higher drug prices has been sharply debated. Some in the manufacturing community point to two issues: better science and rebate pressure. Improved patient outcomes due to scientific advances justifies higher prices, especially since near curative prescription drugs lead to a possible decrease in future healthcare costs. Additionally, manufacturers have rightly been pointing to the pressures by PBMs to increase rebates or face the potential of having certain drugs either removed from the formulary or in the alternative, subjected to increased formulary competition.

While the life sciences industry understands the complexities surrounding drug prices, many state and federal policymakers do not. Hence, there have varied and sometimes disproportionate responses to higher drug prices, which may not solve the problem.

There are many opportunities for manufacturers on the state and federal level to help alleviate policymaker concerns about drug prices, while also helping to provide a grounded response to ensure a stable market that promotes patient access.

Frier Levitt Government Affairs is active on the state and federal level, including both legislative and regulatory developments concerning drug prices. If you are a manufacturer, contact Frier Levitt Government Affairs today for help maximizing your existing resources to get control of the growing drug pricing issue.