By Sarah Karlin-Smith | 10/10/2017 12:19 PM EDT
With help from David Pittman, Luis Sanchez, Caitlin Oprysko and Brianna Ehley
CONGRESS KEEPS THE HEAT ON 340B - The House Energy and Commerce Oversight Subcommittee will probe Wednesday into how hospitals and health clinics participating in the 340B discount drug program are using the savings they reap. Nonprofit hospitals and safety net providers that serve a disproportionate share of low-income patients get steep discounts on outpatient drugs through the 340B program. Five health system executives who participate in the program will testify.
In September, E&C leaders sent letters to 20 hospitals and health systems raising concerns about the expansion of 340B and reports that some hospitals may be abusing the program or not passing along savings to the intended beneficiaries.
The letters press for details about how hospitals use 340B savings and note that the Health Resources and Services Administration testified this summer that the government doesn't know whether patients who need discounted drugs are receiving help. At the summer E&C hearing, there was bipartisan agreement about the need for greater oversight of the program.
... The 340B program often pits drug makers against hospitals.
The drug industry argues the program has grown too large and no longer serves its original intent. The Alliance for Integrity and Reform of 340B (AIR340B), which represents drug makers, is pushing for regulatory and congressional action to narrow the program, including establishing a definition of a 340B-eligible patient. Rep. Chris Collins (R-N.Y.) has been working on legislation that would limit which patients and providers qualify for the program.
Hospitals argue 340B is intended to save them money on drugs so they can provide care for as many patients as possible. The American Hospital Association and American Medical Colleges told Congress last week that entities are using the program as Congress intended, also pointing out that 340B sales make up less than 3 percent of the total U.S drug market. Jeff Davis, legislative and policy council for 340B Health, told Prescription PULSE that hospitals have extensive reporting requirements to ensure transparency on how 340B drug savings are utilized. He said executives Wednesday will also emphasize that beyond charity care, savings are used to treat patients who are uninsured and underinsured, including those in Medicaid and some lower-income Medicare patients.
Happy Tuesday and welcome back to Prescription PULSE, where Sarah is enjoying a week off out west. Keep my colleagues informed by sending tips to David Pittman (firstname.lastname@example.org) and Luis Sanchez (email@example.com). Sarah will return next week.
WHITE HOUSE PRESSURED ON BIOSIMILAR PAYMENTS - Biosimilar manufacturers met with members of the White House's regulatory office earlier this year to convince them that an Obama-era payment policy for generic biologics is flawed. The Biosimilars Forum - a group that includes Amgen, Boehringer Ingelheim, Coherus BioSciences, EMD Serono, Merck, Pfizer, Samsung Bioepis, Sandoz and Teva - met with the White House in late April , according to the Office of Information and Regulatory Affairs' website. On the agenda, according to those familiar with the meetings, was removing a Medicare policy that requires the same price be paid to all biosimilars referencing the same biologic. The policy was finalized in Medicare's 2016 physician payment rule. But drug companies say it limits an incentive to enter the market and runs counter to Congress's intent at the time it created the biosimilars approval pathway. CMS officials solicited feedback on the rule in its July proposal for the 2018 edition, which is expected to be finalized in coming weeks. Merck also met with OIRA on the payment rule in late June, but it's unclear if the topic was also biosimilars.
FORMULARY FRUSTRATIONS LEAD TO LAWSUITS - Global biotech firm Shire filed suit against Allergan last week, alleging that the drug company used anticompetitive discounts and rebates to dominate the market for dry eye disease treatments. Shire said Allergan is "coercing" Medicare Part D plans to exclude or restrict its competing product. The lawsuit followed a similar suit by Pfizer that argued Johnson and Johnson used exclusionary contracts and other anti-competitive practices to stifle competition for J&J's Remicade. These lawsuits reflect the significant hurdles new drug entrants face when trying to compete with market leaders, Morgan Stanley analysts wrote in a note to investors. The investment firm says that exclusionary contracting, discounting and rebating is standard drug industry practice and not illegal in and of itself. Nevertheless, the outcome of these cases will be important to watch, as they could have widespread implications for how drug companies, insurers and pharmacy benefits managers negotiate drug prices and formulary placements.
FTC WORKSHOP ON DRUG MARKETS - The Federal Trade Commission announced last week that it will hold a Nov. 8 workshop to examine how competition is affecting the prescription drug market. The workshop, titled "Understanding Competition in Prescription Drug Markets: Entry and Supply Chain Dynamics," will discuss factors that can block generics from entering the market after relevant patents have expired, and how intermediaries such as pharmacy benefit managers and group purchasing organizations impact the prices consumers pay for drugs. FDA will also participate. The event will be open to the public.
DRUGS TO DING DOCS UNDER NEW MEDICARE PAYMENT SCHEME - Doctors who prescribe a high number of Part B drugs could face a three-fold penalty increase under Medicare's new physician payment program. CMS' June proposal for MACRA's Merit-based Incentive Payment System next year includes costs for Part B drugs in its physician quality score. Specialists, such as rheumatologists, oncologists and ophthalmologists who prescribe more Part B drugs than their primary-care counterparts could be penalized by as much as 16 percent under the program, according to a report from Avalere Health. Most doctors will see bonuses or penalties of around 5 percent. The report was funded by PhRMA, though Avalere says it maintained editorial independence.
CALIFORNIA GOVERNOR SIGNS DRUG BILL - In what's considered to be a major blow to the drug industry, California Gov. Jerry Brown on Monday signed Senate Bill 17 , which requires pharmaceutical companies to give notice before big price increases. The bill, which could become a national model, requires drug makers to notify purchasers at least 60 days in advance of any drug price hikes that exceed 16 percent over a two-year period. It will also force drug makers to explain the reasons for the increases and will make health insurers report on their most expensive drugs. The governor later the same day signed another drug bill, Assembly Bill 265 , which would prohibit drug makers from offering discounts on a brand-name drug if a less-expensive equivalent brand is available.
COLLINS: MORE MONEY NEEDED TO IMPROVE ADDICTION TREATMENT - During a Senate HELP Committee hearing last week, NIH Director Francis Collins told lawmakers that significant new resources will be needed to allow his agency and others to innovate opioid abuse treatment. "There are things we are thinking about doing though they are hard to imagine pulling off without a lot more resources," Collins said. Among the innovations he calls for are more partnerships with the drug industry to create robust overdose antidotes, as well as developing a new generation of non-addictive, highly potent pain medication. "We have good drug targets lined up but we're years away from being able to bring those to the clinic, so we need to speed that up, and that's going to take hundreds of millions of dollars," Collins said.
It's unclear if there is appetite on Capitol Hill for such a request. The Senate Appropriations Committee last month advanced a bill that provided a $2 billion increase to NIH's budget, but most of that money was targeted to things like Alzheimer's research, the BRAIN initiative and precision medicine.
HHS this year is spending $800 million to fight opioids, including $500 million provided under the 21st Century Cures Act. Most of that money is going to prevention and treatment programs.
THE MIXED RESULTS OF BLACK BOX WARNINGS - Medicare formularies became more restrictive for 40 percent of drugs that received FDA-required black box warnings - information on a drug's label designed to call attention to serious or life-threatening risks. A black box warning is the strongest action the FDA can take, short of recalling or withdrawing a drug from the market. However, for most drugs with black box warnings, formulary restrictions remained unchanged, according to a study published in the American Journal of Managed Care. The study looked at nine drugs - all of which had at least one available FDA-approved safer alternative - that received 10 new black box warnings for death and/or cardiovascular risk between 2007 and 2013. Medicare formulary restrictions increased for four of those drugs in one year and five within two years. Prior authorization or step therapy was then required for beneficiaries to obtain the medications. In some cases, coverage of the drugs was eliminated. There were no changes in the formulary restrictions for four of the drugs, and restrictions for one drug were softened. According to the study's authors, the results point to opportunities for improvement in the consistency of formulary restrictions for drugs with black box warnings. Doing so can keep patients from using drugs with known safety risks when safer drugs are available.
PHARMA IN EUROPE
EMA, pharma pushes back on cancer drug study - The European Medicines Agency defended its record on oncology drug approvals after researchers questioned whether new drugs improve or lengthen patients' lives, our Pro colleagues in Europe wrote. A study published in the British Medical Journal last week questioned the EU's drug approval system and the value of expensive new cancer treatments entering the market. Of the 48 cancer drugs the EMA approved between 2009 and 2013, "most drugs entered the market without evidence of benefit on survival or quality of life," the report found. Years later, such evidence for most of the drugs did not emerge. Even when improvements were detected, the medicines weren't found to be much different from existing therapies or placebos.
"Restricting approvals of cancer medicines to situations in which there is indisputable evidence of improvement in overall survival or quality of life will not improve the outlook for cancer patients in the EU," the EMA said in response. "On the contrary, such an approach may deprive patients of early access to effective medicines for patients in urgent need."
Clinical trials are an increasingly problematic way to judge cancer treatments, the European drug makers lobby EFPIA argued in response to the study. Defending the industry's track record on treating cancer patients, EFPIA contended the disease has become more of a chronic condition than a death sentence.
The concerns highlighted by the BMJ study have also been raised about the FDA drug approval process. For example, a piece in Health Affairs on Friday highlights a recent study that found 20 percent of drugs expedited through FDA's review process and 41 percent of drugs that underwent standard review offered zero or negative incremental heath gains over older comparable drugs.
Trump tax plan could bring back pharma's offshore cash - Of all the policies outlined in the Trump administration's tax reform proposal, the proposed tax holiday could be a critical cash source for the biopharmaceutical industry, which stashes a significant amount of money overseas. Although no specific tax rate reductions are included in the proposal, President Donald Trump previously said the administration is aiming for a 10 percent rate on repatriated cash, a steep decrease from the 35 percent rate companies are currently required to pay. A tax holiday could have similar results to the 2004 tax holiday, which led to one-third, or $312 billion, of offshore earnings being converted to U.S. dollars, much of it coming from the pharmaceutical industry.
FDA'S new guidances for device user fees - The FDA has released eight new or updated guidances advising medical device makers on the agency's user fee programs. They also lay out how the FDA and device makers affect the goals of the agency's latest Medical Device User Fee Amendments. In exchange for higher user fees and a new user fee program for completely new classification requests, the FDA will shorten the time it takes to reach a decision on most medical device submissions. Read more from RAPS.
After beating big tobacco, lawyer sets his sights on opioid industry - Mike Moore gained fame 20 years ago for his fight against the tobacco industry, which led to a 50-state, $246 billion corporate legal settlement - the largest in U.S. history. That settlement continues to fund anti-tobacco programs today. Now he's set his sights on the opioid industry. Moore, 65, has been traveling the country to get at least 25 states to help collect evidence against opioid manufacturers. The goal is to create enough pressure and damage to the industry that manufacturers find it's cheaper to back down. As part of a possible settlement, Moore wants to get a "company-funded national program" that will make treatment and education programs more accessible and change doctors' opioid prescribing habits, Bloomberg reports.
FDA released new policies and procedures for communicating with industry about status updates on generic drug applications.
FDA awarded 21 grants for the study of rare diseases: 15 grants for clinical trials to stimulate product development and six grants for natural history studies. NIH's National Center for Advancing Translational Sciences will provide support for the studies.
Sen. Claire McCaskill has introduced a bill that would close a loophole that allowed Allergan last month to transfer a blockbuster eye medicine to Saint Regis Mohawk Tribe, which is claiming tribal sovereignty to block patent challenges.
The Institute for Clinical and Economic Review last week released a draft report assessing the clinical effectiveness and value of therapies to treat tardive dyskinesia, an involuntary movement disorder caused by prolonged use of medications that block the dopamine receptor.
The HHS inspector general released a report that found FDA "generally" spent user fee collections appropriately from 2014-2015. The report made no recommendations for FDA.
The Journal of Health Politics, Policy and Law published a study concluding that Medicaid's best-price rule doesn't inhibit the ability of manufacturers and providers to enter value-based drug pricing to the extent sometimes suggested.
CATCHING OUR ATTENTION: DID AMA FLIP FLOP ON FEDERAL DRUG PRICE NEGOTIATION? - The American Medical Association, once supportive of the idea of government negotiations to lower prescription drug prices, may now be shying away from the idea because of economic self-interests, Axios reports . When AMA's president-elect Barbara McAneny was asked about the issue at a meeting last week, she responded: "What we are very concerned about at the AMA level, is if we advocated for the price-fixing of pharmaceuticals, we have no leg to stand on if we say we don't like price-fixing for physicians." A spokesperson for the doctor lobby, however, told Axios that the group hasn't changed its stance about supporting Medicare Part D drug price negotiations, citing a distinction between government negotiations and government price controls. Although many health care industry groups claim to oppose government price-setting because it conflicts with free-market principles, Axios noted their position is most likely influenced by an interest in protecting their incomes. The AMA currently opposes any kind of price controls and instead backs transparency measures.
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