Thursday, June 26, 2008
Battles Over Prompt Pay, Biogenerics, Drug Pedigree
• Pharmacies Score Pyrrhic Victory On Prompt Pay
• CMS Tightens Own Reins On Medicare Marketing
• Biogenerics Savings: In The Eyes Of The Beholder
• Pharmacies, Drug Makers’ Drug Pedigree Panoply
• FDAAA Implementation Haunts FDA
• FDAAA Correction Bill: Welcome Or Not?
PHARMACIES SCORE PYRRHIC VICTORY ON PROMPT PAY
Months of lobbying paid off for the pharmacy lobby, which scored major victories in getting both House and Senate Democrats to include prompt pay provisions in their Medicare bills. To do so, they had to contend with a last-ditch lobby by pharmaceutical benefit managers for lawmakers to scrap prompt pay for a provision delaying CMS’ controversial average manufacturers price rule, detested by both lobbies. In the end, prompt pay stayed in.
But, it may be a Pyrrhic Victory. House Republicans defied all predictions by switching sides and voting to pass the Medicare bill, but Senate GOP members were not so easily swayed, and blocked cloture on the measure late Thursday night.
Driving the Medicare package is a provision bailing out doctors from a Medicare payment cut that is just days away. Will Democrats cave and simply pass a physician payment relief measure stripped of other add-ons – including pharmacy prompt pay and low-income Part D reforms sought by beneficiaries?
As part of his pitch for the Senate to back the House Medicare bill Thursday, Finance Chair Max Baucus (D-MT) said the measure “would make important improvements in pharmacy payments. It would make payments under the Part D drug benefit fairer — and more timely — to those who dispense drugs to our nation’s senior citizens.” The bill also would increase CMS oversight of questionable Medicare Advantage marketing practices.
CMS TIGHTENS OWN REINS ON MEDICARE MARKETING
As if to tell congressional Democrats enough is enough, CMS just tightened its own reins on Part D and Medicare Advantage marketing. The agency merged its management of Part D and Part contracts – a move expected to result in more regionalized marketing oversight of Part D through an overhauled Medicare Advantage Group – dubbed the Medicare Drug and Health Plan Contract Administration Group.
Inside CMS uncovered an agency memo outlining the change. The move comes in the wake of lawmakers’ calls for regulatory and legislative action to check abusive Part C marketing practices.
Under the plan, reports Inside CMS’ Seth Freedland, management of contractors becomes a regional issue. Account management for Part D will be relocated and combined with MA plans to regional office staff, where MA plans were previously being managed, according to CMS. The plan shifts account management functions for all prescription drug plans and employer group plans into CMS’ 10 regional offices—work that previously took place out of the agency’s central office.
Part C and D contractors will be monitored by a new supervisory group, the Program Compliance and Oversight Group.
CMS has been slowly moving in this direction. In February, the agency released a list of dozens of health care organizations nationwide that were dinged with violations. Next it issued a rule in May to curb certain beneficiary solicitations such as cold-calling and waiting in parking lots for elderly patrons to walk out of stores and medical facilities. The reorganization is the latest step.
The House Medicare bill, which stalled in the Senate late Thursday, would micromanage CMS’ marketing oversight, and ban the sale of non health-related products (i.e. life insurance) during any sales or marketing activity or presentation conducted by an MA plan.
BIOGENERICS SAVINGS: IN THE EYES OF THE BEHOLDER
The Congressional Budget Office this week finally weighed in on how much the Senate’s biogenerics bill would save the government. All sides of the debate grabbed onto the findings to bolster their positions.
As always, statistical value is in the eyes of the beholder.
Fact: CBO declared the Senate bill would only save the government only $46 million over the first five years, but that much bigger savings would accrue once the industry gets its footing. Over 10 years, the government might save $5.9 billion, CBO predicted, as competition takes hold. That is only roughly one-half of 1 percent of all prescription drug spending.
Spin?A key GOP author of the bill said CBO’s cost-savings estimates are all the more reason the House should pass the bill this year. But groups pushing for more aggressive reforms said CBO’s estimates of limited cost savings are proof that lawmakers should take out provisions that protect brand-name companies’ market shares, chiefly “evergreening” protections.
One thing is clear: CBO’s Wednesday release didn’t come close to embracing the wild cost-savings estimates touted by some groups since the Senate health committee passed its biogenerics bill last summer, reports FDA Week’s Sam Baker. Panoply of independent savings projections have estimated 10-year government savings ranging from $3.6 billion to $108 billion. Economists on the more conservative end of that range told FDA Week last year that they expected the final score to reflect their conclusions. And at $6 billion, it obviously does.
Generic versions of expensive biologic drugs could save consumers and the government as much as $100 billion in just 10 years, a generic drug industry-commissioned report predicted. In sharp contrast, a March 2007 report from Avalere Health predicted only $3.6 billion in savings to the government within the first 10 years. An estimate by Express Scripts put 10-year federal savings at $14 billion.
Until now, CBO been mum on its internal math.
PHARMACIES, DRUG MAKERS’ DRUG PEDIGREE PANOPLY
The sparring over electronic drug pedigrees continues. A coalition of pharmacy groups released a report finding that implementing electronic drug pedigrees could significantly cut pharmacies’ profits and would not have much impact on drug safety. The report came out just a day after a top Johnson & Johnson official urged Congress to enact a uniform e-pedigree standard.
As with biogenerics, the cost estimates run the gamut. On the pharmacy side of the ring: Implementing such a standard would cost pharmacies as much as $110,000 per store in the first year, the June 10 pharmacy report concludes. But J&J’s supply chain technology chief Mike Rose says e-pedigrees would curb the $40 billion toll that counterfeits have taken on the drug industry. J&J both drugs and medical devices, products Rose said are vulnerable to counterfeiting.
A bipartisan e-pedigree bill in the House has been greeted with relative warmth, despite strong objections from drug stores, reports FDA Week’s Sam Baker.
Rose last week urged the Senate Judiciary Committee to also get involved, arguing that advancing e-pedigrees could require changes to patent and intellectual-property laws. Multiple pedigree standards open the door to forgery, he testified.
The House bill would establish a federal e-pedigree standard and preempt similar laws at the state level. On the Senate side, a draft bill circulated by health committee Chair Edward Kennedy (D-MA) includes e-pedigree and track-and-trace provisions, but stakeholders aren’t sure where that legislation stands.
Pharmacies hope the bill will remain in the shadows. The pharmacy report, released by the National Community Pharmacists Association and the National Association of Chain Drug Stores, says first-year e-pedigree costs could reach more than $110,000 per store, eating up as much as 2 percent of pharmacies’ annual revenue. NCPA Executive Vice President Bruce Roberts called the House bill an “enormous unfunded mandate that would create a tremendous financial strain on community pharmacies.”
The two groups say counterfeit drugs are usually purchased over the Internet, not in pharmacies, and an e-pedigree mandate would amount to an expensive waste of time.
FDAAA IMPLEMENTATION HAUNTS FDA
Lawmakers watered down provisions and sidestepped writing report language in order to shove FDA reform legislation through Congress last year. FDA officials lauded the final bill at the time, but now the lack of specificity and congressional micromanagement is coming back to haunt them.
In recent weeks, FDA officials started grousing publicly about problems implementing FDAAA—the FDA Amendments Act. The acronym itself is confusing.
At a conference in Boston this week, officials from both FDA and the National Institutes of Health said they are struggling to understand FDAAA’s clinical trials provisions. They aren’t sure what constitutes an “applicable” drug or device trial and how the two agencies should go about detecting erroneously posted clinical data, FDA Week’s Jennifer C. Smith reports.
FDA hopes to issue a guidance by September that will clarify the issue – for which they say industry also wants clarity. Several FDA working groups—composed of staff from the commissioner’s office and the medical device, drugs and biologics centers—have been meeting for several months with NIH officials to figure out the clinical trial measures, an FDA official said in Boston.
Simply defining the term “applicable” has been a top priority. “Trying to come up with a definition of this has taken months and much of NIH’s time,” an FDA official said at the meeting. “I can guarantee when you see the definition, you will still have more questions.”
FDA also can’t figure out how to detect non-compliance with registry or results requirements. It is unsure what enforcement actions to take when non-compliance is found, and what exactly should spur enforcement. The agency is also working out the kinks on linking product information from FDA’s Web site to NIH’s site.
Earlier this month, FDA officials also complained they were having a hard time implementing provisions dealing with pediatric research and direct-to-consumer advertising regulations. An FDA official said translating FDAAA legalese into layman’s terms for the 200-plus new requirements tucked into FDAAA is a “very, very intensive process.”
FDA is also puzzled by the law’s direct-to-consumer advertising provision. The law says TV ads should present risks in a “clear, conspicuous, and neutral” manner, but doesn’t define “neutral.”
The list goes on. Last month an FDA official said FDA will ask Congress to clarify a requirement for the agency to issue a report by September 2009 on the impact of DTC ads on children.
FDAAA CORRECTION BILL: WELCOME OR NOT?
Just how much clarification does FDA want? Last year when lawmakers began writing a FDAAA technical corrections bill, the agency said “thanks, but no thanks.” Worried that such a bill might reopen the carefully negotiated law, the Bush administration urged lawmakers to leave matters alone.
FDA Week has learned that senators are still working on technical corrections, more than six months after the bill became law. Republican Senate staffers said the scope of a technical correction is still unclear, but vowed that any fix would be bipartisan. They also acknowledged that a tight legislative calendar and the illness of Senate health committee Chair Edward Kennedy (D-MA) could prevent them from passing anything this year.
The House passed a technical correction shortly after it passed FDAAA last September. In addition to more minor corrections, the chamber sought to close a loophole that exempts medical device makers from new reporting requirements for adverse events in clinical trials. There was no such fix in the Senate, and it is unclear if the technical corrections now being drafted by senators would include such a provision.
Jane Axelrad, a policy director in FDA’s drug center, said last November that the agency did not want Congress to pass technical amendments to FDAAA. It’s unclear if that sentiment has changed now that FDA officials are agonizing openly about how hard it is to implement FDAAA.--Donna Haseley