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Health plan costs - prescription drugs

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[Opinion] A Simple Solution to Lower Drug Prices for All Americans
"There's a simple solution for lowering prices of both old and new drugs for all Americans, not just for seniors under Medicare: a windfall profits tax that takes back surplus profits derived from excessive prices. This tax would be equal to the difference between a drug's list price -- the price that is used for patient payments -- and the drug's justified price, multiplied by the number of units sold." (Center for American Progress)
[Guidance Overview] Oklahoma Enacts Regulation of Pharmacy Benefit Managers
"[T]he Governor of Oklahoma recently signed [the Patient's Right to Pharmacy Choice Act (HB 2632)] into law. The purpose of the Act is to establish minimum and uniform access to providers, and standards and prohibitions on restrictions of patient's rights to choose pharmacy providers.... By regulating PBMs instead of health plans, the Act will impact self-insured health plans, but does not attempt to regulate such plans directly. This approach may ultimately help the Act avoid challenges by self-insured health plans on ERISA preemption grounds." (HUB International)
Senate Committee Hearing: The Complex Web of Prescription Drug Prices -- Examining Agency Efforts to Further Competition and Increase Affordability
June 19 hearing; page includes video and links to testimony of witnesses: [1] Demetrios Kouzoukas, Center for Medicare, Centers for Medicare & Medicaid Services; [2] Janet Woodcock, MD, Center for Drug Evaluation and Research, Food and Drug Administration; and [3] Vicki L. Robinson, Office of Inspector General, U.S. Department of Health and Human Services. (Special Committee on Aging, U.S. Senate)
Senate Package Targets Healthcare Costs, Surprise Medical Bills
"A broad array of proposed reforms aims to lower drug prices, increase transparency, foster greater electronic exchange of health information and improve public health. The provisions targeting surprise medical bills and drug prices join a growing list of similar proposals in Congress." (Mercer)
[Opinion] Transparency, Regulation Needed to Rein in Pharmacy Benefit
"With pharmacy benefit managers playing an increasingly pivotal role not only in drug pricing but also in administering patient drug benefits, the American Medical Association (AMA) [[on June 10] called for oversight and transparency for the lightly regulated industry. The new policy ... responds to pharmacy benefit managers (PBMs) -- middlemen -- operating in a 'black box' with limited transparency to show what goes on behind closed doors.... [T]he AMA is concerned that the rebate process results in list prices above what they would be absent rebates, as neither PBMs nor manufacturers have an incentive to lower list prices." (American Medical Association [AMA])
How External Reference Pricing Could Address Price Disparities Between Drugs in the U.S. and Other Nations
"American taxpayers pay three times as much for prescription drugs as citizens in other wealthy nations, many of which use external reference pricing, a mechanism that benchmarks drug prices to those paid in other countries. The U.S. has yet to embrace this practice to keep prices affordable for consumers -- perhaps because we are often the first adopter of drugs." (Arnold Ventures)
Witnesses Testify in Review of CVS-Aetna Merger
"The nearly $70 billion transaction closed last fall, but [Judge Richard Leon of the U.S. district court for the District of Columbia] has been thoroughly scrutinizing the DOJ-approved deal.... This isn't a trial; it's merely an opportunity for Leon to gather additional perspective on the acquisition as part of his Tunney Act review process.... The hearings will last up to three days, with three witnesses put forward by amici curiae expected to speak first, followed by three witnesses put forward by CVS and the DOJ." (HealthLeaders Media)
[Opinion] Transparency Is Just One Piece of the Drug Pricing Puzzle
"Public reporting can provide valuable information ... public around excessive launch prices and price increases, but on its own, transparency will not solve the drug pricing problem.... A common refrain from the drug industry is that high prices are necessary to cover the cost of researching and developing new drugs. But industry experts are not buying it." (Arnold Ventures)
Arbitration Approach Favored in Pending Surprise-Bill Legislation
"An arbitration approach -- backed by hospitals -- to resolve surprise medical bills remains most popular among various options in Congress. Hospital advocates wrote Congress this week to criticize legislation that uses a rate-setting approach. Researchers have found positive effects from one state's arbitration approach." (Healthcare Financial Management Association [HFMA])
Policy Options to Help Self-Insured Employers Improve PBM Contracting Efficiency
"The Lower Health Care Costs Act ... includes three key components that address PBM contracting inefficiencies for self-insured employers. [1] PBMs would be mandated to report to employers drug-specific and aggregated pricing, utilization, and spending details for all drugs they contract for on behalf of employers ... [2] PBMs would be prohibited from practicing 'spread pricing' ... [3] PBMs would be mandated to pass-through all price concessions to employers, including rebates, fees, alternative discounts, and other remunerations received from drug companies." (Ge Bai, Mariana P. Socal, and Gerard F. Anderson, in Health Affairs)
Oklahoma Governor Signs Law Regulating PBMs
"Oklahoma Gov. Kevin Stitt ... signed into law HB 2632, which protects patient access to pharmacy services by establishing network adequacy and 'any willing pharmacy' requirements, minimizes pharmacy benefit manager conflicts of interest by prohibiting higher reimbursement rates for PBM-owned pharmacies, and limits PBM abuses by prohibiting retroactive claim adjustments and denials." (National Community Pharmacists Association [NCPA])
Bipartisan Support for New Attempts to Control Prescription Drug Costs
"Lawmakers on both sides of the aisle are applauding two recent developments in the ever-raging battle to contain the cost of American healthcare. On May 8, 2019, [HHS] announced a final rule ... that will soon begin requiring pharmaceutical manufacturers to disclose the list price of prescription drugs in television advertisements.... In an unrelated move just a few days later, 43 states and Puerto Rico filed a lawsuit in federal court in Connecticut, alleging that at least 20 drug manufacturers conspired to artificially inflate and manipulate prices for more than 100 different generic medications." (ERISAPros)
How Does Prescription Drug Spending and Use Compare Across Large Employer Plans, Medicare Part D, and Medicaid?
"Private health insurance, Medicare, and Medicaid accounted for 82% of total retail prescription drug spending in the U.S. in 2017, while patients paid 14% of the total as out-of-pocket payments. For spending on specific drug products, the top five drug products with the highest total spending alone account for at least 10% of total prescription drug spending in large employer plans, Medicare Part D, and Medicaid.... Out-of-pocket drug spending per user among people in large employer plans and Medicare Part D is highest for drugs to treat cancer, multiple sclerosis and rheumatoid arthritis." (Henry J. Kaiser Family Foundation)
Opioid Prescriptions Drop Sharply Among California State Workers
"Insurance claims for opioids ... decreased almost 19% in a single year among the 1.5 million Californians served by [CalPERS].... Most notably, doctors reduced the daily dose and duration of opioid treatment: The number of new users who were prescribed large doses dropped 85% in the first half of 2018 compared with the same period in 2017, while new users prescribed more than a week's supply dropped 73%[.]" (Kaiser Health News)
CBO Reply to Sen. Grassley: Negotiation Over Drug Prices in Medicare
May 17, 2019. "Senator Chuck Grassley asked for updated answers to two questions that CBO addressed in a letter to Senator Ron Wyden in 2007. Those questions relate to the Medicare Part D prescription drug benefit and options for allowing [HHS] to negotiate over the prices paid for drugs under that benefit.... The questions and the key conclusions from CBO's response in 2007 are [included in this letter]. CBO continues to stand by those conclusions." (Congressional Budget Office [CBO])
House Passes Legislation to Strengthen the ACA
"[T]he Strengthening Health Care and Lowering Prescription Drug Costs Act ... combines four individual bills related to the ACA and three bills to lower prescription drug costs.... The bill was also amended to require increased transparency of ACA-related activities by [HHS], to prohibit HHS from ending automatic reenrollment in marketplace plans, and to express the sense of Congress that HHS should not limit the practice of silver loading." (Katie Keith, in Health Affairs)
[Guidance Overview] CMS Takes Action to Lower Prescription Drug Prices and Increase Transparency
"After an implementation period, Part D plans will be required to ... provide clinicians with access to price information for different prescription drugs.... To further promote transparency, after an implementation period [this] rule will also require the Explanation of Benefits document that Part D enrollees receive each month to include information on drug price increases and lower-cost therapeutic alternatives." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Final Regs: Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses
201 pages. "This final rule amends the Medicare Advantage (MA) program (Part C) regulations and Prescription Drug Benefit program (Part D) regulations to support health and drug plans' negotiation for lower drug prices and reduce out-of-pocket costs for Part C and D enrollees.... These regulations are effective on January 1, 2020, except for the amendments to Sections 422.629, 422.631, 422.633, 423.128, and 423.160, which are effective January 1, 2021." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
A Plan to Lower Prescription Drug Prices
"The average annual cost of a brand-name drug has more than tripled in the past decade.... Giving Medicare the ability to negotiate with drugmakers is the best way to attack high drug prices.... Substituting generics for brand-name drugs can cut costs dramatically.... But drug companies do all they can to retain their monopolies.... [T]ransactions among parties in the drug supply chain are rarely made public -- it can be difficult to tell whether any of them are contributing to higher drug prices or being incentivized not to keep them under control." (AARP)
Drug Price Disclosures and the First Amendment
"The rule's disclosure requirement likely does regulate speech rather than non-expressive conduct: the Supreme Court held in 1976 that 'prescription drug price advertising' is protected by the First Amendment, and more recently, said that if the government regulates 'the communication of prices rather than prices themselves,' the government is regulating speech.... [T]he Supreme Court has said that, generally, disclosure requirements compel speech and are accordingly subject to heightened scrutiny under the First Amendment." [CRS Legal Sidebar LSB10298, May 13, 2019] (Congressional Research Service [CRS])
Lawsuit Against Generic Drug Manufacturers Alleges Conspiracy to Fix Prices for Over 100 Drugs
"[Connecticut] Attorney General William Tong led a 44-state coalition in announcing a lawsuit against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs.... The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs." [Connecticut v. Teva, No. 19-710 (D. Conn. complaint filed May 10, 2019)] (Office of Connecticut Attorney General William Tong)
Policy Proposals to Increase Patient Access and Improve Affordability for Prescription Drugs (PDF)
10 pages. "[The authors] propose a set of positive, common sense policy solutions to address the issues around prescription drug access and affordability. These proposals are broken into four broad categories: [1] better coverage; [2] pay for value; [3] better markets and competition; and [4] improved transparency." (Council for Affordable Health Coverage [CAHC])
[Opinion] A Doctor Tells Pharmacy Benefit Managers: Stop 'Treating' My Cancer Patients
"Pharmacy benefit managers were supposed to help bring down the cost of drugs by negotiating with competing drug companies and by 'encouraging consumers to use the most cost-effective drugs.' But they have done the opposite, fueling higher drug prices through manufacturer rebates and by extorting fees from pharmacy providers." (STAT)
Health Plans Should Prepare for Fallout from HHS Rule Requiring Manufacturers to Disclose Drug Prices
"In addition to impacting existing plan features and their administration, health plans, their fiduciaries, administrators and insurers should prepare for a predictable surge in scrutiny by plan members about health plan prescription drug formularies that in many cases will fuel new appeals and challenges to the plan denials, formularies and other impacted features. Health plan fiduciaries, administrators, PBMs and other vendors, employer and other sponsors should anticipate and begin preparing both to handle these new health plan demands and ideally, to educate patients and their caregivers to use the new information to make better health care choices." (Solutions Law Press)
House Subcommittee Hearing: Lowering Prescription Drug Prices -- Deconstructing the Drug Supply Chain
May 9 hearing. Page includes video of hearing, along with Memorandum from Chairman Pallone and testimony from witnesses: [1] Justin McCarthy, Pfizer; [2] Kave Niksefat, Amgen; [3] Jeffrey Hessekiel, Exelixis; [4] Amy Bricker, Express Scripts; [5] Brent Eberle, Navitus Health Solutions; [6] Estay Greene, Blue Cross and Blue Shield North Carolina; [7] Lynn Eschenbacher, Ascension; [8] Jack Resneck, M.D., American Medical Association; [9] Richard Ashworth, Walgreen Co.; [10] Leigh Purvis, AARP. (Energy & Commerce Committee, U.S. House of Representatives)
[Opinion] Why the New HHS Drug Rebate Rule Deserves (Cautious) Support
"There are three basic problems with the current Part D financing system. First, because rebate contracts are proprietary, the Part D market lacks sufficient price transparency to incentivize efficient consumer shopping. Second, rebates can create perverse incentives for Part D plans to purchase drugs with high list prices and large rebates even when lower cost alternatives are readily available. Lastly, rebates systematically disadvantage Medicare enrollees who use expensive brand-name medications." (Health Affairs)
[Official Guidance] Text of CMS Final Regs Requiring Drug Pricing Transparency for Medicare and Medicaid Programs
102 pages. "This final rule [amends] regulations for the Medicare Parts A, B, C and D programs, as well as the Medicaid program, to require direct-to-consumer (DTC) television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost (WAC or list price) of that drug or biological product. This rule is intended to improve the efficient administration of the Medicare and Medicaid programs by ensuring that beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize their out-of-pocket (OOP) costs and expenditures borne by Medicare and Medicaid, both of which are significant problems." [Editor's note: Includes over 80 pages of summary, analysis and response to the 147 comments received on the proposed regs. Also available: CMS Drug Pricing Transparency Fact Sheet.] (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
House Committee Approves Drug Price Transparency Legislation/Drug Sample Reporting Requirement Under Sunshine Act
"The STAR Act provides that if the price of a drug increases by more than 10% or $10,000 over one year, or 25% or $25,000 over three years, or if the manufacturer launches a new drug at or above $26,000, the manufacturer must submit a "justification" to HHS with cost information beginning in 2021. HR 2113 also requires manufacturers to provide a summary of the justification, exclusive of proprietary information, for posting to the HHS website. Significantly, the STAR Act authorizes civil monetary penalties to be imposed for failing to submit a timely justification ($10,000 per day) and/or providing false information in the justification (not to exceed $100,000 per false item)." (Morgan Lewis)
The Money and Politics of Prescription Drugs: What You Need to Know
"America spends about $460 billion a year on these drugs, roughly as much as the combined revenues of the top three car makers.... Tracking the money challenges the savviest of analysts. Between the drugmakers and the patients lie an array of middlemen, who end up masking the true prices through discounts to one another and rebates to patients. Here are a few benchmarks to help you navigate the realm of prescription drugs." (Kaiser Health News)
District Court Tells HHS to Revisit 340B Drug Discounts After Ruling Cuts 'Unlawful'
"CMS changed the program's payment rate from up to 6% more than the average price of drugs to 22.5% less than the average price, which cut $1.6 billion in 340B payments.... Judge Rudolph Contreras ... [reaffirmed] that cuts made under the 2018 Outpatient Prospective Payment System (OPPS) were unlawful and extended the ruling to include the 2019 cuts. However, he did not grant the relief requested by the hospital groups, which included the difference between the amount they received under the 2018 and 2019 OPPS rules and the amount they are entitled." [American Hospital Assoc. v. Azar, No. 18-2084 (D.D.C. May 6, 2019)] (FierceHealthcare)
Three Major PBMs Show Lower Drug Trend Across Commercial Clients
"CVS Health Corp.'s 2018 drug trend report shows a 3.3% trend for its commercial clients last year, driven by utilization increases and adherence improvements. Overall, the company cited savings of more than $141 billion on pharmacy spend from 2016 to 2018. Earlier this year, PBM giant Express Scripts, now a part of Cigna Corp., reported a record low drug trend of 0.4% across its commercial clients ... CVS Health reported a -1.7% trend for antidiabetic drugs, despite increasing utilization and 5.6% average wholesale price inflation for brand drugs." (AISHealth)
Out-of-Pocket Costs Go Through the Roof for Neurology Drugs
"The fastest rise in monthly out-of-pocket costs occurred with MS drugs, which climbed from $15/month in 2004 to $309/month in 2016. Cumulative 2-year out-of-pocket costs for MS patients were an average of $2,238, which varied considerably from patient to patient: 5% of MS patients paid an average of $90, while another 5% paid $9,855 or more. Expenditures for dementia, epilepsy, peripheral neuropathy, and Parkinson's disease drugs also increased considerably, particularly for patients with high-deductible health plans." (HealthLeaders Media)
CBO Updated Budget Projections Incorporating the Effects of the Proposed Rule on Safe Harbors for Pharmaceutical Rebates (PDF)
"Implementing the rule as proposed would ... increase federal spending by about $177 billion over the 2020-2029 period: Spending for Medicare would increase by about $170 billion and spending for Medicaid by about $7 billion.... [The proposed rule] would eliminate the existing safe harbor for rebates paid by pharmaceutical manufacturers to health plans and PBMs in Medicare Part D and Medicaid managed care beginning January 1, 2020.... The rule would replace that safe harbor with two new ones: one related to upfront discounts for prescription drugs and the other to service fees." [Document date: May 2019] (Congressional Budget Office [CBO])
The Obscure Advisory Committees at the Heart of the U.S. Drug Pricing Debate
"These relatively unknown expert committees have been involved in drug coverage decisions for decades. Their identities are kept secret due to federal regulations aimed at preventing pharmaceutical industry interference. The committees make their decisions based on a drug's clinical value, independent of cost, pharmacy benefit managers say. But their power has grown more recently with the consolidation of most of the U.S. pharmacy benefits business under OptumRx, CVS and Express Scripts. Taken together, their three advisory committees now guide drug coverage for more than 90 million Americans." (Reuters)
Ohio Attorney General Calls for Legislation to Address State's Arrangements with PBMs
"Attorney General Yost's four-step plan includes requests for legislation that will require: [1] All of the state's various PBM contracts be aggregated under one single contract and therefore administered through one point of contact; [2] The Ohio Auditor of State have unlimited access to review all PBM drug contracts, purchases and payments; [3] All PBMs working with state plans act as fiduciaries (requiring them to act in the best interest of the plans' participants,); and [4] Any non-disclosure agreements, or gag orders aimed at concealing the costs of prescription drugs, be prohibited." (Calfee, Halter & Griswold LLP)
Are States Trending Toward Prescription Drug Affordability Boards?
"While Maryland became the first state in the nation to pass legislation creating a Prescription Drug Affordability Board, it may not be the last. Seven other states are exploring similar legislation ... Building 'on the precedent of healthcare rate setting and state regulation of public utilities,' the [National Academy for State Health Policy (NASHP)] has developed model legislation to be used by state lawmakers for establishing drug cost review commissions in their states. A [chart compares] the provisions of current affordability review proposals[.]" (Morgan Lewis)
Women, Uninsured More Likely to Use Strategies to Reduce Prescription Drug Costs
"Nearly 60% of adults were prescribed a medication in the previous 12 months, with the majority of these prescriptions (70%) carrying out-of-pocket costs.... 22.0% of women asked for a lower-cost medication compared with 16.4% of men; 12.7% of women did not take their medication as prescribed compared with 9.7% of men; and 6.6% of women used alternative therapies compared with just 3.9% of men." (American Journal of Managed Care)
33% of U.S. Workforce Using Prescription Pain Medications
"One in three workers reported using prescription pain relievers -- the majority under treatment of a physician. Males and millennials were the most impacted by substance use disorders.... Abuse and dependence of alcohol is reported at higher rates than pain relievers and other prescription medications.... On average, non-problematic use of pain relievers was associated with 0.8 days of excess absences per month per person compared with non-users. The problematic use of pain relievers was associated with 2.0 absences, or 1.2 excess days per month compared with non-users." (Integrated Benefits Institute)
Eliminating Drug Rebates: How Might Access and Pricing be Affected?
"In a rebate-less world, companies could be forced to compete more directly on value. This might require a shift in strategy toward more robust evidence generation, the development of support services, and greater competition in value-based contracts." (Deloitte)
[Opinion] Reining In Drug Costs: No Easy Fix
"Elimination of drug rebates seems like a clear winner but opponents would argue that, at least in the short term, this may result in increased costs and certainly will create a shift in who bears the expenses.... A recent Milliman report shows that 57% of the Medicare population has under $1,000 in claims and their costs would increase without rebates as compared to 27% of the population with costs over $2,500 whose costs would decrease." (Frenkel Benefits)
Senate Hearing on Drug Pricing Provides a Lesson in What PBMs Do
"In the third of a series of hearings on rising drug prices, the senators seemed focused on getting an answer to one central question: What the heck is a pharmacy benefit manager? ... Representatives from Cigna, CVS Caremark, UnitedHealthcare's OptumRx, Humana and Prime Therapeutics, all PBMs, testified on the ins and outs of their little-understood industry, disputing the idea that they are simply 'middlemen' taking their cut, but rather pharmacy experts looking for the most effective and cheapest drugs for their clients." (Kaiser Health News)
Maryland at the Forefront of Groundbreaking Legislation to Lower Drug Prices
"On Monday, the Maryland Legislature voted to create a Prescription Drug Affordability Board with the authority to review drug costs and set reasonable payment rates for drugs -- similar to a state's approach to regulate utilities. The Maryland Prescription Drug Affordability Board would be the first of its kind, acting as an independent body to set limits on how much state and local governments pay for expensive drugs. The goal, according to state officials, is to lower prescription drug spending in the state." (Arnold Ventures)
[Opinion] American Benefits Council Comment Letter to HHS on Proposed Regs for Prescription Drug Rebates and Safe Harbors
11 pages. "As a general matter, employers do not support the current rebate structure as it is complex and opaque, hiding the true prices of drugs and the true value of how the rebate is calculated. The Council is concerned, however, that the Proposed Rule will not do enough to change the incentives for entities in the drug delivery chain that lead to higher list prices and larger rebates." (American Benefits Council)
Senate Bill Would End Drug Rebates in Employer Plans
"The Drug Price Transparency Act (S. 657) ... would put the onus on group health plans and insurers to ensure that rebates between PBMs and drugmakers are passed along to participants and beneficiaries at the point of sale. Any remuneration between a drugmaker and a PBM would have to take the form of a flat fee for PBM services and meet transparency standards that [HHS] would develop." (Mercer)
Administration's 2020 Budget Proposal Addresses Retirement, Health Care and Paid Leave
"The budget proposes to 'shift the [PBGC] premium burden to underfunded plans' by increasing the cap on variable-rate premiums to $900 per participant in 2020.... The [budget] proposal would allow participants covered under a health plan with an actuarial value of up to 70% to contribute to HSAs.... [The proposal] also aims to reduce prescription drug costs by accelerating the development of generic alternatives and making other changes.... The budget proposes to provide six weeks of paid family leave to new parents. Using the unemployment insurance program as a base, states would be required to design and administer paid leave programs." (Willis Towers Watson)
[Opinion] American Academy of Actuaries Letter to CMS on Changes to Safe Harbors for Rebates Involving Prescription Pharmaceuticals (PDF)
"[These] comments focus on the Medicare Advantage (MA) and Medicare Part D bid development processes.... Major changes such as those in the proposed rule typically require the full multi-year bid development period to properly incorporate the changes into insurer bids and operations.... [B]ecause direct subsidy and low-income premium subsidy amounts are a function of plan bids, there needs to be consistency in bidding approaches to ensure equitable outcomes among plans. Moreover, it could be difficult to implement the necessary operational changes in such a short time period should a 2020 implementation date be finalized." (American Academy of Actuaries)
Cigna, Express Scripts Capping Insulin Co-Pays to $25 for Participating Commercial Members
"Cigna and its pharmacy benefit manager Express Scripts [are] launching a program for patients with diabetes in its commercial plans so that they pay no more than $25 for a 30-day supply of insulin.... [T]he average out-of-pocket (OOP) cost for insulin was $41.50 for a 30-day supply last year; under the new program, eligible patients will save approximately 40%." (American Journal of Managed Care)
Drug Rebates May Soon Be a Thing of the Past
"Drugs will cost less at the point-of-sale and employers who are used to large rebates will have to adjust. This will especially affect high deductible plans where much of the savings will no longer be paid to the plan sponsor.... Overall patient cost-sharing will be reduced which might make a change in premium cost-sharing necessary to keep employer costs in line." (Frenkel Benefits)
How Health Plans Are Tackling the Opioid Crisis (PDF)
20 pages. "Recognizing that addressing the opioid crisis is complex and multi-faceted, health plans use a comprehensive approach encompassing prevention, early intervention, and treatment and recovery. [This] Playbook provides practical examples of strategies health plans have deployed for all three components of this comprehensive approach. Taken together, these strategies reflect innovative ways plans continue to combat this evolving public health crisis and the industry's demonstrated role as an integral part of the solution." (America's Health Insurance Plans [AHIP])
What's Hiding in Your Specialty Drug Claim Costs?
"Specialty medication claims have long been paid out through the medical benefit -- most notably those for cancer therapies.... Like the price variability [of] tests like MRI's, the site of service dictates what is paid.... [There are] significant variances in how much health care providers are reimbursed for the same quantity of the same amount of the same drug. The difference, again, is the site of service." (Buck)
HHS's Proposed Modification of Pharmacy Rebate Safe Harbors (PDF)
"The proposed regulations do not explicitly impact the commercial market, although voluntary alignment with Medicare is a possibility, and HHS Secretary Azar has called for follow-up legislation. The regulations also do not change the safe harbor with respect to drugs purchased through Medicare Part B fee-for-service plans, federal rebates collected for Medicaid MCO claims, or federal or supplemental rebates received directly by Medicaid state agencies." (Milliman)
Kentucky Launches Probe Into Drug Overcharges by Pharmacy Benefit Managers
"[Kentucky Attorney General Andy Beshear is] seeking details on how PBMs have determined, billed and paid drug reimbursement rates over the past five years in Kentucky ... A report released last month by the state indicated that two PBMs took in $123.5 million last year from the state Medicaid program by paying pharmacies a lower rate to fill prescriptions, while charging the state more for the same drugs[.]" (Reuters)
HHS Proposes Changes to Rebates for Part D Plans Under the Anti-Kickback Statute
"HHS has requested feedback on many aspects of the proposals such as ... the impact upon beneficiary access to prescription pharmaceutical products either due to cost or formulary placement.... If enacted, the proposals will likely lead to an increase in the Part D premiums as it will substantially alter the relationship between pharmaceutical manufacturers, Medicare Part D plans, PBMs, and participants. The new relationship could also extend to or impact those in the non-Medicare, i.e., commercial, marketplace." (Cheiron)
17 Ways Employers Are Fighting Prescription Drug Costs
"Nearly all (97.6%) organizations responding to the survey offer prescription drug benefits, either as part of their health plan (83.1%) or through a separate plan (14.5%).... Responding organizations use a number of cost-sharing initiatives to ease the burden of rapidly escalating costs... Survey respondents also employ a diverse range of strategies to limit the use of certain drug types.... Responding organizations employ a range of drug access controls to control plan costs.... Finally, organizations have various prescription drug purchasing and administrative initiatives." (International Foundation of Employee Benefit Plans [IFEBP])
Prices for and Spending on Specialty Drugs in Medicare Part D and Medicaid: An In-Depth Analysis (PDF)
62 pages. "In 2015, the weighted average net price for 50 top-selling brand-name specialty drugs in Medicare Part D was $3,600 per 'standardized' prescription -- a measure that roughly corresponds to a 30-day supply of medication -- whereas the weighted average net price for the same set of drugs in Medicaid was $1,920. In Medicare Part D, net spending on specialty drugs rose from $8.7 billion in 2010 to $32.8 billion in 2015. In Medicaid, net spending on specialty drugs roughly doubled over the same period, reaching $ 9.9 billion in 2015. For beneficiaries in the Medicare Part D program who took brand-name specialty drugs, average annual net spending on such drugs per beneficiary (in 2015 dollars) increased from $11,330 in 2010 to $33,460 in 2015." [Also available: 10-page Summary Report] (Congressional Budget Office [CBO])
CMS Updates Drug Dashboards with Prescription Drug Pricing and Spending Data
"This Administration's version of the drug dashboards ... adds information on the manufacturers that are responsible for price increases and includes pricing and spending data for thousands more drugs across Medicare Parts B and D and Medicaid.The dashboards focus on average spending per dosage unit for prescription drugs paid under Medicare Parts B and D and Medicaid, and track the change in average spending per dosage unit over time." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
House Committee Hearing on Lowering the Cost of Prescription Drugs: Reducing Barriers to Market Competition
March 13 hearing. Page includes description and links to text of seven bills directed at controlling prescription drug prices, along with video of hearing, Chairman's briefing memo, and written testimony of invited witnesses. (Energy & Commerce Committee, U.S. House of Representatives)
[Guidance Overview] HHS Proposed Rule Could Significantly Impact Drug Manufacturers, PBMs, and Other Stakeholders
"The proposed rule ... adds a new safe harbor for point-of-sale price reductions ... [which] requires that the following criteria be met: [1] The reduced price must be set in advance with a plan sponsor under Medicare Part D, a Medicaid MCO, or the PBM acting under contract with either; [2] the sale does not involve a rebate unless the full value of the reduction in price is provided to the dispensing pharmacy through a chargeback or series of chargebacks, or is required by law; and [3] the reduction in price must be completely applied to the price of the prescription drug charged to the beneficiary at the point of sale." (Wilson Sonsini Goodrich & Rosati)
UnitedHealthcare Will Expand a Drug Discount Program Aimed at Lowering Consumer Costs
"UnitedHealthcare said Tuesday that it will expand a program that passes drug discounts directly to consumers ... United said the plan would take effect next year and would be required for all new employer clients, although existing clients would be permitted to continue under the older system." (The New York Times; subscription may be required)
Lawmakers United Against High Drug Prices Bare Partisan Teeth
"The Doggett-Brown proposal is based on a concept known as compulsory licensing, which would allow the government to use its power to issue patents as a lever if manufacturers are seen as not operating in good faith.... Republicans at the hearing maintained that this government market muscle would discourage research and development of new medicines and treatments, echoing industry representatives who say the strategy is not only costly but also doesn't always lead to a breakthrough." (Kaiser Health News)
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