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.
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.
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.
CMS’ payment model policy shifts have the ability to severely impact several key stakeholders in the healthcare continuum, including:
– 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.