Tuesday, July 29, 2008
HHS Dealt Drug Pricing Card In Final Bid To Sink Medicare Bill
• HHS Dealt Drug Pricing Card In Final Bid To Sink Medicare Bill
• NCPA, PCMA Object To First Databank Settlement
• Pharmacies May Get Some MedGuide Relief From FDA
• Public Health Care Heavyweights Resurface In Private Sector
• Waxman Seeks To Shave Part D Payments For Dual Eligibles
• Another Generic Drug Scandal?
WHITE HOUSE DEALT DRUG PRICING CARD IN FINAL BID TO SINK MEDICARE BILL
Congressional Republicans didn’t listen when the administration first told them to vote against Democrats’ Medicare bill over its Medicare Advantage cuts. So the White House came up with a new talking point when it tried to get GOP members to uphold President Bush’s veto. The talking point: The bill has a pro-pharma provision that would hike drug prices. But the surprise appeal to anti-pharma sentiment on Capitol Hill also didn’t work, and the bill is now law.
The drug provision targeted by the administration is actually supported by beneficiary advocates, who are known for opposing drug price increases. It seems the measure’s intent is in the eyes of the beholder.
The bill’s author, Senate Finance Chair Max Baucus (D-MT), says the provision merely codifies a CMS guidance requiring that Medicare Part D cover all drugs in “six protected classes.” But CMS’ beef is that it also allows new classes to be added. An agency official told Inside CMS’ Amy Lotven the provision broadens HHS’ ability to demand plans cover certain drugs and could “politicize” the Part D benefit, resulting in increased premiums and greater costs for taxpayers. A top HHS official, in a private conference call with White House backers prior to the veto-override vote, also attacked the provision.
The 11th-hour move surprised beneficiary advocates, who said the administration’s fears are unfounded. The provision’s criteria for adding new classes are very stringent, a beneficiary advocate told Lotven.
The law that established Part D required private plans administering the benefit to include a minimum of two drugs per drug class. In 2005, CMS identified six classes of drugs for which there was concern that therapeutic substitutions determined by plans are inappropriate. The newly enacted provision codifies the move, while setting up a formal process for expanding coverage.
The insurance industry trade group, likely happy to find a new reason other than MA cuts to oppose the bill, told Lotven it also feared the provision would negatively affect seniors’ Part D premiums.
NCPA, PCMA OBJECT TO FIRST DATABANK SETTLEMENT
Drug pricing issues are also a hot issue in the courts. The traditionally rivaling lobbies that represent the nation’s independent pharmacies and the pharmaceutical benefit managers (PBMs) for once agree on something. They worry a proposed settlement in a high-profile drug pricing case could have a ripple effect on the prices for over 40 percent of all branded drugs, which represents 80 percent of all prescriptions filled in independent pharmacies.
At issue is a revised settlement agreement in a lawsuit alleging that the publisher First Data Bank (FDB) and drug distributor McKesson artificially inflated the average wholesale prices of thousands of national drug codes (NCDS), Lotven reports. Both the National Community Pharmacy Association (NCPA) and the Pharmaceutical Care Managers Association (PCMA) say the settlement poses serious harm to the drug industry and should be rejected.
Under the revised settlement, FDB would reduce AWP rates for 1,356 drugs to 1.2 times the wholesale acquisition cost (WAC) effective within 90 days of approval. The settlement covers fewer drugs than an earlier version of the settlement, but still has riled both groups.
“The AWP rollback threatens the viability of numerous independent pharmacies and even the more limited list [in the revised settlement] includes over 40 percent of all branded drugs, which represents 80 percent of all prescriptions filled in independent pharmacies,” NCPA charges.
PCMA agrees and both lobbies says the proposal to implement the AWP pricing rollback within 90 days of approval precludes any appellative review and could be legally defective.
PHARMACIES MAY GET SOME MEDGUIDE RELIEF FROM FDA
As they continue to fight in court over drug pricing policies, pharmacies may get some relief from the administration on another issue they have battled over for years – the content of patient medication information, known as MedGuides.
An internal FDA group is drafting a guidance to revise the content and format of MedGuides, FDA Week’s Jennifer C. Smith reports. Pharmacy groups have urged both lawmakers and FDA to ease strict aspects of MedGuide requirements and to clarify electronic distribution requirements, and some want MedGuides consolidated with similar consumer medical information. The National Association of Chain Drug Stores thinks MedGuides should be required only with the first prescription, not refills.
FDA plans to come out with a new guidance in the next six to 12 months, an FDA official said at a recent Drug Information Association conference in Boston. Possibly pharmacists will get some of their requested relief, as the FDA team is working closely with the National Association of Boards of Pharmacy to review MedGuide distribution.
There are lots of issues pharmacists want resolved. Some pharmacy groups say physicians should be responsible for distributing the guides to patients, and some say current regulations do not clearly state that MedGuides can be distributed to patients by e-mail. Pharmacists are also concerned about the reliability of MedGuides. The guides are accessible as PDFs on FDA’s Web site, but the PDF version might be a sample of what a drug company sent to FDA and not the actual MedGuide, pharmacists say. And not all MedGuides are listed online.
An FDA official said the internal working group is reviewing DailyMed, an interagency online health information clearinghouse, to see whether all available MedGuides are accessible.
PUBLIC HEALTH CARE HEAVYWEIGHTS RESURFACE IN PRIVATE SECTOR
Two public health care heavyweights – one who was known for his dogged congressional oversight of CMS and the other for trying to inject free speech principles into FDA’s stalwart control over drug industry promotion—have resurfaced, both in the drug industry.
Insmed has tapped former House Ways & Means Chair Bill Thomas as its strategic advisor. Thomas, who strong-armed lawmakers and agencies as head of one of the most powerful House committees, likely will be a valuable asset to Insmed as Congress gears up to tackle generic biologics, reports InsideHealthPolicy’s Greg Hellman.
Insmed, a developer of follow-on biologics, announced it was hiring Thomas one week after the company said it demonstrated the bioequivalence of INS-19 to an FDA approved treatment of neutropenia. Insmed says it has produced the first bioquivalence data for a follow-on biologic product by a U.S. company.
If Congress passes generics biologics legislation next year, it would mark the biggest reform in drug patent law since the 1984 generic drug patent law, and would have major ramifications for both CMS, overseen by Ways & Means, and FDA.
Thomas served in the House of Representatives for 28 years as a Republican from California before retiring last year. He chaired the House Ways & Means Committee from 2001 until 2006 and oversaw the passage of the Medicare Modernization Act of 2003.
GlaxoSmithKline has also picked up a healthcare heavy-hitter – former FDA Chief Counsel Dan Troy. Troy will become GSK’s general counsel and senior vice president on Sept. 2. Troy’s insights into government policymaking could come in handy as the drug industry fights FDA preemption, tighter drug safety limits and efforts by the government to wade into the largely off-limits territory of practice of medicine, reports FDA Week’s John Willkerson.
Known as a commercial speech advocate, Troy used his position at FDA to oppose the agency’s efforts to restrict distribution of risky drugs, filed amicus briefs arguing FDA authority preempts state tort suits, reined in agency warning letters, and fought FDA efforts to restrict distribution of journal articles about off-label uses. While at FDA from 2001 to 2004, Troy stepped in when the drug center proposed a restricted distribution plan for GSK’s Lotronex, according to then-commissioner Lester Crawford. Lotronex was the first drug returned to the market after having been pulled for safety reasons. The plan was supposed to reduce the number of adverse events so GSK could reintroduce the treatment for irritable bowel syndrome, which it did in 2002.
WAXMAN SEEKS TO SHAVE PART D PAYMENTS FOR DUAL ELIGIBLES
The ink is barely dry on Part D changes included in the newly enacted Medicare provider fix law, but Democrats aren’t wasting any time delving into more drug benefit reforms. Drug pricing has been a staple issue for Democrats for years – and next Congress likely will be no exception.
House Oversight and Government Reform Chair Henry Waxman (D-CA) is drafting legislation that would limit Medicare Part D payments for beneficiaries who are also Medicaid eligible to the Medicaid rates, Lotven reports. The bill was prompted by a Democratic staff report that found Part D paid $3.7 billion more than Medicaid over the last two years for the 100 most common drugs used by dual-eligible beneficiaries.
Taxpayers could save a whopping $86 billion over 10 years if Part D insurers paid for dual-eligible drugs at the Medicaid rate, and $156 billion if all Medicare Part D plans paid the lower rates for all beneficiaries, the report found.
The Bush administration and several GOP members on Waxman’s committee aren’t happy with the move. During a hearing last week on the staff report, CMS acting Administrator Kerry Weems and several GOP lawmakers argued that fixing prices in the public sector would inspire drug manufacturers to raise prices in the private sphere.
A report penned by the oversight committee’s minority staff members notes that it was state and beneficiary advocates during the creation of Part D that had insisted dual-eligibles be included in Medicare, to avoid creating a tiered system.
A new Government Accountability Office report on consumer complaints with Part D has also fueled Democrats’ complaints with Part D. House Energy & Commerce Chair John Dingell (D-MI) says the report underscores consumer dissatisfaction with certain areas of Part D.
ANOTHER GENERIC DRUG SCANDAL?
FDA’s approval of generic drug ingredients is again in the spotlight – with the same powerful House Energy & Commerce chair who uncovered the generic drug scandal two decades ago once again probing the agency’s approval of generic drugs. Lest anyone forget his past work, Rep. John Dingell (D-MI) issued a statement drawing a link between his 1989 investigation and the current probe of generic drug maker Ranbaxy: “If these allegations are true, Ranbaxy has imperiled the safety of Americans in a manner similar to the generic drug scandal we uncovered twenty years ago,” said Dingell. “I would like to know whether FDA officials knew about these allegations and what, if any, action was taken.”
“One of the great reforms to come out of the generic drug scandals was the institution of pre-approval inspections,” said investigations subcommittee Chair Bart Stupak (D-MI), pointing back to problems uncovered with drug ingredients coming from China. “Now it appears that such inspections in India – the second largest supplier of drugs to the United States – may be another example in which FDA found it inconvenient to assure the safety and effectiveness of drugs before approving them for marketing to American patients.”
Dingell and Stupak are investigating whether FDA knew about manufacturing problems associated with Ranbaxy drug approvals. The lawmakers want to know if FDA knowingly allowed the sale of drugs suspected of being approved with fake data and made with unapproved active ingredients. Dingell is asking how often FDA performs inspections that are supposed to be part of generic drug approvals.
The Bush administration has its own investigation underway. The Justice Department on July 3 filed a motion on FDA’s behalf to enforce subpoenas for information from generic drug maker Ranbaxy, which FDA suspects faked drug data, flouted manufacturing requirements and covered up violations. Ranbaxy denies the allegations and says it told FDA before the suit was filed that the information was forthcoming.
Generic drug scandal revisited? Back in Oct. 2, 1989, a New York Times opinion piece cited concerns similar to those being raised by Dingell today. According to the opinion piece: “These are bad times for generic drug makers and their regulators ... [T]wo generic drug companies have admitted to providing false data. Now, after a new scandal involving defective generic drugs for epilepsy, Representative John Dingell says he’s lost confidence in the industry’s integrity and the F.D.A. The F.D.A. depends almost wholly on industry’s trustworthiness to regulate some 25 percent of the nation’s consumer economy. In the field of generic drugs, this faith has been abused.” --Donna Haseley