Monday, April 14, 2008
How Bare-Bones Will This Year’s Medicare Reform Bill Be?
•MA, Part D, LIS Reform Left Out Of Baucus’ Talks With Providers
•CMS To Collect MA Utilization Data; MedPAC Scrutinizes Group Plans
•CMS Updates E-Prescribing Standards, Finalizes Part D Clarifications
•FDA Tried To Stop Vytorin Ads, But Soon Enough?
•House Democrats’ Long-Promised Biogenerics Survey Surfaces
•Can Antimicrobials Get Orphan Drug Status? Stay Tuned
MA, PART D, LIS REFORM LEFT OUT OF BAUCUS’ TALKS WITH PROVIDERS
The notoriously tight-lipped Senate Finance Committee chairman met last Friday (April 11) with medical specialty representatives in an effort to be more “open and transparent” and “advance the ball” for physician payment reform. But Medicare Advantage (MA), Part D and low-income subsidy (LIS) reforms were not discussed, industry participants tell Inside CMS’ Brett Coughlin.
While it’s been an open secret that the Medicare reform package being drafted by Sen. Max Baucus (D-MT) will be bare-bones, beneficiary advocates have some cause to worry that long-sought MA, Part D and LIS reforms will be pushed off due to opposition from fiscally conservative lawmakers.
“It’s a battle,” one advocate noted, but added that it’s not surprising that Part D and other reforms were not mentioned at Finance’s meeting with provider groups.
Just last summer, a Baucus aide had listed three Part D reform priorities: raise the asset threshold for low-income subsidy applicants; ensure that pharmacists get reimbursed 14 days after submitting a prescription claim; and allow drug plans to cover benzodiazepines and potentially barbiturates.
Baucus is expected to soon reintroduce legislation to boost comparative effectiveness research and, according to an aide, considers MA and Part D marketing reform a “must-do.”
Requiring MA private fee-for-service plans to operate contracted provider networks – another reform Finance members are considering – would generate billion-dollar savings but may run into Republican opposition and a presidential veto.
While last Friday’s closed door meeting centered on an 18-month physician payment fix, Finance Committee staff did tell provider reps that they intend to reform how Medicare pays for end-stage renal disease care. The industry has been pressing for legislation that gives the HHS secretary authority to provide an annual update to the ESRD composite rate, and CMS has recommended that anemia-fighting drugs like Epogen be folded into the ESRD composite rate by 2011.
CMS TO COLLECT MA UTILIZATION DATA; MEDPAC SCRUTINIZES GROUP PLANS
Two years after CMS began to fully risk-adjust payments to MA plans, the agency now wants to improve the way it calculates these payments. In the process, the agency wants to collect utilization data per beneficiary and provider – information House Democrats have sought for more than a year in their quest to justify MA payment cuts.
CMS’ plan to collect data from MA sponsors regarding each item and service provided to their enrollees is included in the agency’s inpatient prospective payment proposal, put on display Monday (April 14). CMS says it may use the data not just to determine risk-adjusted payments, but also to develop risk adjustment models and “other purposes”—a term stakeholders abhor.
“[T]there may be occasions when we learn from analysis of medical record review data that some organizations have misunderstood our guidance on how to implement an operational instruction,” CMS says in its proposal, which is up for public comment until June 13. “We want to be able to provide improved guidance to MA organizations based on any insights that may emerge during analysis of the medical record review data.”
Democrats have blasted CMS for not producing data on the utilization of MA services, and especially of the widely touted extra benefits. House Ways & Means health subcommittee Chair Pete Stark (D-CA) and others noted that inflated payments mean a financial boon for MA plans especially if beneficiaries aren’t actually taking advantage of the benefits offered to them. CMS officials said last year that most MA plans report extra benefit utilization data through the Health Plan Employer Data and Information Set, although private fee-for-service plans are not required to report.
A Medicare Payment Advisory Commission (MedPAC) analyst advanced another argument for MA cuts last week: Employers and unions may be shifting costs toward the Medicare program by moving their retirees into MA group plans that profit from a relaxed bidding process and high subsidies. Although the idea of Medicare displacing private-sector dollars is not new, lawmakers appear to be taking note, InsideHealthPolicy’s Rolf Rosenkranz writes.
MA group plans tailor their benefits depending on the wishes of the employer or union they contract with. Private fee-for-service plans have been particularly attractive to employers so far because they rarely operate provider networks, allowing retirees to remain covered when moving out of state. On Friday, however, CMS granted HMOs and local PPOs serving employer groups “new flexibility to expand their geographic service areas,” according to the Gorman Health Group. The change will “enable local MA plans to more easily offer multi-state and national MA group products” and compete with PFFS plans, the Washington-based consulting group says.
Advocates have grown increasingly worried about tailored group plan benefits since the U.S. Equal Employment Opportunity Commission (EEOC), in a December rule that created an exception to the Age Discrimination in Employment Act, allowed employers to limit or drop retiree health benefits for Medicare-eligible beneficiaries. Last month, the U.S. Supreme Court declined to hear AARP’s legal challenge.
The bottom line, according to Wall Street analysts: The MA program remains an attractive investment for now.
CMS UPDATES E-PRESCRIBING STANDARDS, FINALIZES PART D CLARIFICATIONS
CMS won’t compromise on Medicare’s non-coverage of weight-loss products, despite a growing obesity epidemic that contributes to skyrocketing health care spending. Products used for anorexia, weight loss or weight gain are excluded from the Part D program by law, the agency argues in a final rule published in the Federal Register Tuesday (April 15).
The rule codifies technical changes to the retiree drug subsidy, clarifies pharmacy network requirements for infusible drugs and broaches topics from insulin coverage to plan-to-plan reconciliation.
The agency surely hasn’t been idle: Barely two weeks ago, CMS added to its e-prescribing standard information on formulary and benefits, medication history, fill status notification and identification of health care providers. The move is part of HHS’ ongoing efforts to bring Medicare into the digital age, Inside CMS’ Theresa Morgan writes.
The e-prescribing policy, released April 2, won’t keep privacy advocates from pushing for tighter protections of patient data. Legislation pending on Capitol Hill would require physicians to use e-prescribing, and industry experts expect HHS and Congress to take up the issue of electronic health records towards the end of the decade.
We’ll see.
FDA TRIED TO STOP VYTORIN ADS, BUT WAS IT SOON ENOUGH?
FDA’s oversight of TV ads on Vytorin is now center stage in House Democrats’ probe of the agency’s handling of the controversial cholesterol-lowering drug. It all comes down to timing. Documents obtained by lawmakers show FDA decided in late January that Vytorin ads were misleading, but apparently relayed the message to industry a day after the drug’s makers had already pulled the ads from the airways, reports FDA Week’s Sam Baker.
House Energy & Commerce Committee lawmakers are suspicious of the timing. The agency’s determination that the ads were misleading was based on information long available to FDA, according to documents released Friday (April 11) by the committee. Lawmakers are also asking Merck and Schering-Plough, which market Vytorin, if they decided to pull Vytorin’s TV spots because of FDA’s determination or “for another reason.”
In a Jan. 23 letter to Merck, FDA stated that direct-to-consumer advertising for Vytorin was misleading because it lacked “contextual information disclosing a limitation of the efficacy of Vytorin.” The agency directed the companies to fix their advertising within 90 days or by the time they produced new ads. But the letter was dated a day after Merck and Schering-Plough had already voluntarily pulled TV ads for Vytorin.
Committee investigators also question why an internal FDA e-mail announcing the decision to seek changes in Vytorin’s marketing is dated Jan. 16—the same day Energy and Commerce sent letters to FDA and the companies asking for information about the ad campaign.
FDA Week’s calls to FDA officials involved in the decision were not immediately returned.
Commercial-speech advocates balked at lawmakers when they first began asking questions months ago about FDA’s oversight of the Vytorin ads. At the time, the commercial speech advocates charged lawmakers were merely trying to cause trouble for a top-selling drug with a catchy DTC campaign. They may now be changing their tune.
The House committee has also targeted DTC ads for Lipitor, which featured artificial-heart inventor Robert Jarvik. Those ads have also been pulled from the airwaves. The oversight subcommittee plans to hold a hearing next month on DTC advertising. The hearing likely will also touch on erythropoiesis-stimulating agents, which fight anemia.
FDA last year issued the fewest warning and untitled letters on drug ads in a decade. President Bush proposed increasing FDA spending on drug ad reviews in 2009, but FDA’s plan to rely heavily on drug user fees was blocked by appropriators. As a result, FDA’s new five-year drug safety plan does not call for hiring staff to review direct-to-consumer ads.
HOUSE DEMOCRATS’ LONG-PROMISED BIOGENERICS SURVEY SURFACES
Just as a key House proponent of generic biologics predicted Congress won’t act this year, other lawmakers brought the issue back to the forefront by sending an eight-page letter to some 30 stakeholders asking their views on the most contentious topics in the debate. The long-promised survey broaches legal, scientific and economic topics that have vexed lawmakers who are searching for a compromise, reports Baker.
Energy and Commerce health subcommittee Chair Frank Pallone (D-NJ) and ranking Republican Nathan Deal (GA) wrote the April 3 letter. While two members of the subcommittee—Reps. Henry Waxman (D-CA) and Anna Eshoo (D-CA)—have introduced biosimilars legislation, the letter signals that lawmakers have been unable to reach a consensus on the issue.
The letter covers such hot button questions as: Should biogenerics be required to undergo immunogenicity testing? What standards are needed for determining interchangeability, and is interchangeability desirable? Should non-interchangeable generics be required to have a non-proprietary name? How much money does FDA need to implement a biogenerics program, and should user fees be involved? Which FDA office should review generic biologics? What lessons can be learned from the generic drug patent system? How much market exclusivity do brand-name firms need? How much money would a generic biologics pathway save?
Stakeholders, who have been debating these issues for years, will need to roll up their sleeves and get to work. Lawmakers want a response by April 22.
If legislation is eventually passed, a new hire at FDA may help the agency in carrying out its new task. FDA has tapped a prominent oncologist, Frank M. Torti, as principal deputy commissioner and chief scientist—a new position created by the FDA Amendments Act.
Though generic biologics is not listed on Torti’s job description, he brings expertise to the agency on biology cancer issues. He has chaired Wake Forest University School of Medicine’s Department of Cancer Biology, and founded and serves as president of the Cancer Biology Training Consortium, a national society of cancer biology department chairs and program directors.
CAN ANTIMICROBIALS GET ORPHAN DRUG STATUS? STAY TUNED
Industry infectious disease experts hope an April 28 FDA public meeting will clear up confusion on whether antimicrobials are eligible for orphan drug status. FDA has sent out mixed messages on the topic, and the Infectious Diseases Society of America hopes to finally get a clear answer, reports FDA Week’s John Wilkerson. FDA scheduled the meeting to get input from stakeholders on a range of antimicrobial issues.
Lawmakers considered setting up special incentives for antimicrobial development while writing the FDA Amendments Act, but dropped the idea after FDA told congressional staff antimicrobials are already eligible for orphan drug incentives, according to Bob Guidos, IDSA’s director of public policy and government relations. Since then, however, other FDA officials have contradicted that message, he said.
A fallback provision included in the FDAAA called for FDA to hold a public hearing to discuss whether serious and life-threatening infectious diseases, such as diseases caused by gram-negative bacteria and other antibiotic-resistant bacteria, might qualify for grants and contracts under the Orphan Drug Act or some other incentives. Orphan drug status brings with it a nice prize: seven years of market exclusivity and grants during development to defray the cost of clinical testing.
Drugs are considered orphans if the disease or condition they treat affects less than 200,000 Americans. The question is whether orphan status may be based on the drug-resistant bacteria a drug fights, or the diseases that the bugs cause, Guidos said. Often, there are fewer than 200,000 patients with a drug resistant strain of a disease that affects a much larger population.
On another infectious disease issue, IDSA is happy that FDA will soon issue a guidance on non-inferiority trial design for community-acquired pneumonia, reports FDA Week’s Jennifer C. Smith. FDA made the announcement at the end of a two-day meeting of the Anti-Infective Drugs Advisory Committee on designing CAP non-inferiority trials. The committee voted that such trials—which show whether a new drug is as good as one on the market, instead of comparing it to a placebo—were appropriate for products intended to treat the disease.
But key lawmakers, including longtime FDA critic Sen. Charles Grassley (R-IA), Michigan Democratic Reps. John Dingell and Bart Stupak, and Rep. Henry Waxman (D-CA), are skeptical of non-inferiority studies. They fear such studies could lead to approval of unsafe drugs.
The Government Accountability Office plans to investigate the issue, at the lawmakers’ request.--Rolf Rosenkranz and Donna Haseley