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News Items, by Subject

Health plan costs - prescription drugs


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[Guidance Overview] CMS Announces New Model to Lower Drug Prices in Medicare Part D and Transformative Updates to Existing Model for Medicare Advantage
"Under the new model, which takes effect for the 2020 plan year, participating plans will take on greater risk for spending in the catastrophic phase of Part D, creating new incentives for plans, patients, and providers to choose drugs with lower list prices. Based on plan year performance, CMS will calculate a spending target for what governmental spending would have been without plans taking on this additional risk. Participating Part D plans will share in savings if they stay below the target but will be accountable for losses if they exceed the target. For the first time, the model also introduces a Part D rewards and incentives program to align this model with the changes to VBID, and to provide Part D plans with additional tools to control drug costs and help enrollees in choosing drugs with lower list prices." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Drug-Pricing Transparency, Vertical PBM Deals Are Top of Mind for Employers in 2019
"As they look to win over employer clients this year, PBMs should be prepared to face stiff competition and embrace emerging trends such as value-based formularies and rebate-free models ... Companies are also considering how the vertical integration in the PBM space is 'reshaping the landscape' ... [M]any of the same themes that employers are focused on will apply, including greater transparency around drug pricing and rebates, and even rebate-free models[.]" (AISHealth)
Bringing 'Transparent Thinking' to PBM Management (PDF)
50 presentation slides. Topics: [1] What is a PBM? [2] Who are the parties to a PBM contract? [3] Why do PBMs have so much power? [4] How do PBMs make money? [5] Contract terms -- the need for solid terms in a contract. [6] A push for transparency. [7] Policy news. [8] A real life example: PBGH's Waste-free formulary study. (Trucker Huss)
HHS Secretary Raises Possibility of Allowing Drug Importation to Help Rein in Drug Prices
"[HHS] Secretary Alex Azar ... expressed support for the safe importation of drugs from other countries as a means to spur competition in the prescription drug market and prevent manufacturers from imposing price hikes -- a significant turning point in the administration's approach to drug costs ... Unlike other proposals to reduce drug costs, such as Medicare negotiation or allowing the government to manufacture drugs, importation has bipartisan support." (Morning Consult)
HHS Medicare Drug Shift Plan Could Reduce Costs Overall But Raise Them for Some
"At 2018 prices, Part B spending for the 75 brand-name drugs with the highest Part B expenditures was estimated to be $21.6 billion annually. Under the proposed policy, total Part D drug spending for these drugs would fall to an estimate in the range of $17.6 billion and $20.1 billion after rebates, corresponding to a 6.9% to 18.3% decrease in drug spending in Part D compared with Part B costs." (American Journal of Managed Care)
Sen. Sanders, Rep. Cummings to Introduce Bill to Lower U.S. Drug Prices
"The Sanders and Cummings bill would peg U.S. prescription drug prices to the median price from five countries -- Canada, Britain, France, Germany and Japan -- where drug costs are typically far lower because of government price controls.... The bill would also allow the U.S. Secretary for Health and Human Services (HHS) to negotiate prices in Medicare Part D ... The proposal would also end a ban that keeps Americans from buying medicines at lower prices from Canada and other countries." (Reuters)
Health Care Industry Spends $30 Billion Each Year Pushing Its Wares, From Drugs to Stem Cell Treatment
"Spending on health care marketing doubled from 1997 to 2016.... The biggest increase in medical marketing over the past 20 years was in 'direct-to-consumer' advertising, including the TV commercials that exhort viewers to 'ask your doctor' about a particular drug. Spending on such ads jumped from $2.1 billion in 1997 to nearly $10 billion in 2016[.]" (Kaiser Health News)
Drug Costs Driven Largely By Price Increases, Not Innovation
"[T]he cost of brand-name oral prescription drugs rose more than 9 percent a year from 2008 and 2016, while the annual cost of injectable drugs rose more than 15 percent.... [I]ncreases in prices of brand-name drugs were largely driven by year-over-year price increases of drugs that were already in the market[.]" (National Public Radio [NPR])
Policy Options for Increasing Generic Drug Competition Through Importation
"Although overall generic drug prices have slowly decreased since 2010, off-patent drugs with few or no competitors, such as pyrimethamine (Daraprim) and lomustine (Gleostine), have been subject to sudden, large price increases. Bolstering competition by importing versions of these off-patent drugs from abroad may help prevent the dramatic price increases that have grabbed recent headlines, particularly if the working group establishes permanent importation channels with comparable foreign regulatory agencies and targets a wider selection of off-patent drugs with insufficient competition." (Health Affairs)
Prescription Drug Policy: The Year in Review, and the Year Ahead
"Democratic members of Congress, many of whom will now serve in leadership positions in the new Congress, have introduced a flood of bills on the topic of drug pricing.... All of these bills go beyond the comprehensive legislation already introduced by Democrats into both houses in 2017[.]" (Health Affairs)
Dozens of Pharmaceutical Makers Raise Prices on Hundreds of Drugs to Ring in the New Year
"Many companies' increases are relatively modest this year, amid growing public and political pressure on the industry over prices. Yet a few are particularly high, including on some generics, the cheaper alternative to branded accounting for nine out of 10 prescriptions filled in the U.S. Overall, price increases, including recently restored price increases from Pfizer Inc. continue to exceed inflation." (MarketWatch)
Judge OKs CVS Plan to Keep Aetna Separate Pending Review
"CVS said it is currently operating Aetna's health insurance business separately from CVS's retail pharmacy and PBM business units, with Aetna maintaining control over pricing and product offerings. Aetna personnel will also retain their current compensation and benefits, and CVS will maintain a firewall to prevent the exchange of competitively sensitive information between the two companies." (AISHealth)
Onsite Dispensaries Help Employees Use Medications Properly
"A healthcare delivery model that fosters an open dialogue between patients and their healthcare providers can improve medication adherence.... Having easy access to a trusted provider in a workplace clinic can also help patients access the right team of clinicians to meet their needs in the community, across the care continuum.... Providers in traditional healthcare settings are often constrained by lack of time to communicate effectively with patients -- and their families." (Healthstat)
New PBM Models Respond to Public Pressure, Market Demand
"Express Scripts Holding Co. and CVS Health Corp. have in recent months unveiled new programs that appear designed to transition away from the PBM status quo.... Express Scripts' new National Preferred Flex Formulary allows it to add to its formulary a newly launched lower-cost alternative to a brand medication -- giving members immediate access to that drug -- and lets the PBM exclude the innovator brand product from coverage.... Under CVS's new Guaranteed Net Cost model, the company will pass 100% of rebates to plan sponsors[.]" (AISHealth)
Possible Steep Consequences for U.S. Pharmaceutical and Biologics Industries from ACA Decision
"[T]he ruling could undo the entire U.S. biosimilars industry, because without the ACA, there is no statutory framework for biosimilar drug approval. Second, Judge O'Connor's opinion could potentially leave millions of patients without prescription drug insurance coverage, hurting both the patients themselves as well as the pharmaceutical industry's bottom line. The good news is that while the ACA has been declared unconstitutional, Judge O'Connor did not issue an injunction, so the act remains in force -- at least for now." [Texas v. U.S., No. 18-167 (N.D. Tex. Dec. 14, 2018)] (Schiff Hardin)
For the Asking, a Check Is in the Mail to Help Pay for Costly Drugs
"Drugmakers began using now-popular copay coupons and other forms of assistance more than a decade ago to help patients pay out-of-pocket costs for medicines, particularly high-cost specialty drugs such as those that treat autoimmune disorders. The coupons have a dual purpose: They mask the true costs of a drug for patients and give patients a financial incentive to stay on an expensive drug until their insurance deductible is met." (Kaiser Health News)
[Opinion] Prescription Drugs and Price Controls: What the Debate Gets Wrong
Podcast with transcript. "America has been called the 'Pharmacy to the World' because it's where more than half of new drugs get developed and tested in clinical trials. Patients in Europe and elsewhere enjoy the benefits of these breakthrough drugs. Price controls in the U.S. would significantly curtail new research and development project s-- resulting in a net loss for everyone." (City Journal, published by the Manhattan Institute for Policy Research)
[Official Guidance] Text of Department of Defense Interim Final Rule: TRICARE Pharmacy Benefits Program Reforms
17 pages. "This interim final rule implements Section 702 of the National Defense Authorization Act for Fiscal Year 2018 [which] makes significant changes to the TRICARE Pharmacy Benefits Program, specifically it: [1] updates co-payment requirements; [2] authorizes a new process for encouraging use of pharmaceutical agents that provide the best clinical effectiveness by excluding coverage for particular pharmaceutical agents that provide very little or no clinical effectiveness relative to similar agents and for giving preferential status to agents that provide enhanced clinical effectiveness; and [3] authorizes special reimbursement methods, amounts, and procedures to encourage use or high-value products and discourage use of low-value products with respect to pharmaceutical agents provided as part of medical services from authorized providers." (U.S. Department of Defense)
Telemedicine Could See Uptick in 2019 with Change in Rules for Online Prescribing
"The Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (Ryan Haight Act) ... imposed a federal prohibition on form-only online prescribing for controlled substances.... One of the exceptions mandated that the Drug Enforcement Administration (DEA) create a special registration process to enable a prescribing practitioner to deliver, distribute, dispense, or prescribe a controlled substance to a patient who has not been medically examined in-person via telemedicine ... Over the course of the next year, the Attorney General will have to determine the 'limited circumstances' in which a special registration may be issued." (Bloomberg BNA)
Double Jeopardy in Health: It's Time for Employers to Care
"A rise in drug prices, at an average rate of 6.3 percent per year, has led payers to increasingly shift costs to patients through the placement of drugs in higher tiers.... These formulary policies give rise to a sort of 'double jeopardy,' wherein the sickest employees face the largest financial burden. However, the interests of employers and employees may be more closely aligned than people realize, especially once the hidden costs are taken into account." (Health Affairs)
CMS Office of the Actuary Releases 2017 National Health Expenditures
"Hospital spending (33 percent of total healthcare spending) decelerated in 2017, growing 4.6 percent to $1.1 trillion compared to 5.6 percent growth in 2016.... Physician and clinical services spending (20 percent of total healthcare spending) increased 4.2 percent to $694.3 billion in 2017.... Retail prescription drug spending (10 percent of total healthcare spending) slowed in 2017, increasing 0.4 percent to $333.4 billion.... The 3.9 percent growth in healthcare spending was slightly slower than growth in the overall economy (4.2 percent) in 2017." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses: Highlights from the Proposed Rule
"Plan sponsors should review the proposed regulation and consider submitting comments to CMS (the comment deadline is January 25, 2019).... [T]he proposed rule raises operational questions that will need to be addressed by plan sponsors and PBMs. There will be pricing implications in the bids, and other actuarial considerations such as trend and Part D risk corridor projections.... [T]he provisions are likely to necessitate re-negotiation of contracts between plan sponsors and pharmacy benefit managers." (Wakely Consulting Group)
Drug Companies Draw Fire for Not Using Tax Savings to Lower Drug Prices
"Critics of high drug prices are launching a new line of attack against manufacturers of the medicines, faulting the firms for using savings from the tax overhaul to buy back shares rather than lower prices.... The Congressional scrutiny is the latest sign that drug pricing is emerging as a leading issue in Washington, and drug companies could have a big bullseye on their backs as both Republicans and Democrats respond to popular discontent with how much drugs cost." (The Wall Street Journal; subscription may be required)
[Guidance Overview] CMS Releases Medicare Advantage and Part D Drug Pricing Proposed Rule for Contract Year 2020
"The agency has proposed five changes to amend Medicare Advantage and Medicare Prescription Drug Benefit (Part D) regulations to support health and drug plans' negotiation for lower drug prices and to reduce out-of-pocket costs for MA and Part D enrollees.... [1] Providing plan flexibility to manage protected classes ... [2] E-prescribing and the Part D prescription drug program; updating Part D e-prescribing standards ... [3] Medicare Advantage and step therapy for Part B drugs ... [4] Pharmacy price concessions to drug prices at the point of sale ... [5] Part D explanation of benefits." (Epstein Becker Green)
CVS Offers 'Guaranteed Net Cost' for Pharmacy Benefit Clients
"CVS Health Corp ... said as of Jan. 1 it will offer a new prescription benefit option guaranteeing its health plan clients 100 percent of any rebates, discounts or other fees paid by drugmakers.... The 'guaranteed net cost' option [could] deflect growing criticism that pharmacy benefit managers (PBMs) reap gains off the widening gap between pharmaceutical list prices and their lower net cost after hefty rebates paid by drugmakers to secure coverage and access to their products." (U.S. News & World Report)
[Guidance Overview] CMS Issues Proposed Rule on Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses
"Key provisions of the Proposed Rule are ... [1] Providing plan flexibility to manage Part D protected classes ... [2] Prohibition on gag clauses in pharmacy contracts ... [3] E-prescribing and the Part D prescription drug program: updating Part D e-prescribing standards ... [4] Part D explanation of benefits ... [5] Medicare advantage and step therapy for Part B drugs ... [6] Pharmacy price concessions in negotiated price." (Sheppard Mullin)
[Guidance Overview] Administration Proposes Strategies to Lower Pharmaceutical Prices in Medicare Part D
"As set out in the proposed rule, the plan has three major new provisions: [1] providing Part D plans with more flexibility to manage protected classes, [2] updating existing e-prescribing systems to make patients' costs visible when a prescription is ordered, and [3] requiring pharmacy price concessions for drugs at the point of sale." (Health Affairs)
Medicare Plans Could Gain Drug Pricing Leverage Under CMS Proposal
"Health plans would be required to cover at least two drugs per protected class. But they would gain new latitude to exclude additional drugs. One of the proposed exceptions would allow plans to exclude drugs based on price hikes that exceed inflation. The idea is to tamp down costs by giving plans a stronger arm in their negotiations with drug makers." (HealthLeaders Media)
Cost-Sharing and Drug-Price Transparency in New York
"In New York, prescription drug cost-sharing is rigidly defined by state law for most health-insurance markets, except federally regulated employer-sponsored insurance or Medicare plans.... Although drug-price transparency may be welcomed for its political effects, the disparity between list prices and those actually paid by individuals covered by various insurance plans would tend to mislead rather than inform.... Although most insurers offer price-comparison websites, few enrollees use them. To get more value from price transparency, insurers should be allowed more flexibility in designing cost-sharing so that they may provide more appropriate incentives for consumer engagement." (Manhattan Institute)
CMS Takes Action to Lower Prescription Drug Costs by Modernizing Medicare
"The proposal would ensure that Medicare Advantage and Part D plans have more tools to negotiate lower drug prices, and the agency is also considering a policy that would require pharmacy rebates to be passed on to seniors to lower their drug costs at the pharmacy counter.... CMS is also considering for a future plan year, which may be as early as 2020, a policy that would ensure that enrollees pay the lowest cost for the prescription drugs they pick up at a pharmacy, after taking into account back-end payments from pharmacies to plans." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] Text of CMS Fact Sheet: Contract Year 2020 Medicare Advantage and Part D Drug Pricing Proposed Rule
"CMS is proposing or outlining for consideration by stakeholders a number of provisions that implement these four strategies. [1] Providing plan flexibility to manage protected classes.... [2] E-prescribing and the Part D prescription drug program ... [3] Medicare advantage and step therapy for Part B drugs ... [4] Part D explanation of benefits ... [5] Prohibition against gag clauses in pharmacy contracts ... [6] Pharmacy price concessions in the negotiated price." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Proposed Regs: Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out of Pocket Expenses
185 pages. "This proposed rule would amend 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." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
NY Approval Clears the Way for $69 Billion CVS Acquisition of Aetna
"CVS Health Corp. has agreed to spend $40 million for health insurance education and other conditions to win approval from New York regulators, clearing the way for its acquisition of Aetna Inc., state officials announced [Nov. 26]. CVS announced it expects to close on the $69 billion deal by Wednesday." (InsuranceNewsNet.com)
Employer Health Benefit Costs Predicted to Be Lower in 2019
"Health care insurers and pharmacy benefits managers report that the rate of increase for prescription drug costs (including price and utilization) are coming down by 1% overall for each group. Based on these indications, employers may expect to see their costs for prescription drugs going up, however they will be going up at a lower rate than was projected six months ago ... Now, according to health insurers, the increase in prescription costs is projected at 10% (vs. 11% six months ago)." (PLANSPONSOR)
In the Absence of Drug Rebates, New Alternatives Are Likely to Emerge
"Rebate alternative #1: Point-of-sale (POS) rebates ... generated when the consumer fills a prescription. A portion of the negotiated rebate between the manufacturer and the PBM/health plan is used to offset the consumer's out-of-pocket expense at the pharmacy.... Rebate alternative #2: Negotiated discount price ... [P]harmacies would likely continue to acquire products from wholesalers and distributors using today's list price. PBMs and plan sponsors would then pay the pharmacies based on the negotiated discount price, which would be less than their acquisition cost." (Deloitte)
Branded Prescription Drug Prices Continue to Rise
"Prescription drug spending among branded specialty and patent-protected drugs continues to outpace generic drugs at $79.5 billion ... Branded prescription drugs comprise only 17 percent of total prescriptions filled but account for 79 percent of overall drug spending at $79.5 billion.... While generic drug spending has declined 3 percent since 2016, it hasn't kept pace with the rapid rise in specialty branded drugs." (Blue Cross and Blue Shield Association)
Prescription Drug Importation: New Federal Initiatives and the Case for State Action
"While the administration recently floated the idea of Medicare using international reference pricing for drug purchasing, ... the FDA is proposing drug importation to stimulate price competition among biologics and certain small molecule generics. This is a significant development that could change decades-old federal policy, and it is predictably generating industry pushback." (Health Affairs)
The New California Regulatory Scheme for Pharmacy Benefit Managers
"PBMs will have to register with the California Department of Managed Health Care (DMHC) and provide new disclosures to the purchasers of their services. The bill will also establish a new pilot project and task force run by the DMHC to analyze how PBMs are affecting the pharmaceutical market." (Sheppard Mullin)
Walmart, Home Depot Adopt Health Insurer Tactic in Drug Copay Battle
"Walmart and Home Depot ... have embraced a health insurance strategy that punishes drugmakers for using discount cards to keep patients from switching or stopping their medications.... The programs, known as copay 'accumulators' and copay 'maximizers,' are expected to expand in the next two years, from about 25 percent of U.S. employers to as much as 50 percent ... Drugmakers are worried about the hit to profits if many more employers sign on. They are also concerned because they cannot easily track when the programs are being used." (Reuters)
Something Happened to U.S. Drug Costs in the 1990s
"Several factors could be at play in America's spending surge. One is the total amount of prescription drugs used.... Americans use prescription drugs for 12 percent fewer days per year than their counterparts in other wealthy countries.... Prices are a lot higher for brand-name drugs in the United States because we lack the widespread policies to limit drug prices that many other countries have." (The New York Times; subscription may be required)
Big Change Ahead for Medicare -- and Employers Will Feel It, Too
"The Trump Administration is considering a proposal that is a major shake-up in the way Medicare reimburses for infused drugs paid under Medicare Part B, which ... could have a major ripple effect on employer plans.... In the Medicare program today, ... [p]hysicians are reimbursed the cost of the drug plus an add-on fee--typically 6% of the drug's cost.... Simply stated, if physicians and/or pharma companies make less money off these products they will look to replace that revenue. And that will very likely result in massive cost shifting to the private sector." (Mercer)
Recent Trump Administration Proposals Aimed at Lowering Drug Costs
"The first proposal would require any pharmaceutical company marketing a drug covered by Medicare or Medicaid with a list price greater than $35 ... to disclose the price in commercials.... The second proposal would establish an 'international index' of the average prices paid for prescription drugs in other industrial countries in order to determine how much to pay for drugs covered by Medicare Part B." (Stradley Ronon)
Managing Pharmacy Costs Through Focused Analytics (PDF)
"This article discusses the importance of focused analytics that include retrospective and prospective reviews of internal and external forces. Plan sponsors can optimize their pharmacy management by evaluating past experience, benchmarking experience against the industry, aligning program goals, and responding to industry changes." [Article starts at page 5.] (Milliman)
[Guidance Overview] Drug Pricing Plan Would Tie Medicare Part B Reimbursement to International Prices
"[The International Pricing Index (IPI) Model] would: [1] Pay a new IPI Model vendor directly for Part B drugs at a benchmarked international price. [2] Pay physicians and hospitals a per-month or per-dispense administration fee, which ... would not be tied in any direct manner to the cost of the drug administered.... [O]ne of the primary effects of the IPI Model would be to remove health systems and hospitals from billing for certain Part B drugs altogether." (K&L Gates)
Trump Adds a Global Pricing Plan to Wide Attack on Drug Prices, But Doubts Persist
"The proposal to require drug prices in TV ads could be delayed by litigation and notably, if implemented, does not include any penalties for companies who fail to post their prices. The proposed rebate rule was delivered to [OMB] in July. Matt Brow, president of industry consulting firm Avalere Health, said he expects the administration to publish the rule for comment by year's end. Trump's international pricing plan is not as far along as the rebate proposal." (Kaiser Health News)
Trump Administration Outlines Plan to Lower Pharmaceutical Prices in Medicare Part B
"The plan contains three key elements: substituting private-sector pharmaceutical vendors for the current Part B 'buy and bill' practice, changing the Part B Average Sales Price plus 6 percent reimbursement system to a flat fee, and implementing international reference pricing. The first two of these were attempted -- and failed -- in previous administrations." (Health Affairs)
[Guidance Overview] CMS Proposes International Pricing Index Model for Medicare Part B Drugs
"CMS is considering issuing a proposed rule in the spring of 2019 on the potential model, called the International Pricing Index (IPI) Model. The potential IPI Model would start in spring 2020 and operate for five years, until the spring of 2025. Over the course of the model, CMS would monitor and evaluate the impact of the model on beneficiary access to drugs, program costs, and the quality of care for beneficiaries.... CMS is seeking feedback on the potential parameters of the IPI Model." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Notice of Proposed Rulemaking: International Pricing Index Model for Medicare Part B Drugs
59 pages. "CMS intends to test whether [1] phasing down the Medicare payment amount for selected Part B drugs to more closely align with international prices; [2] allowing private-sector vendors to negotiate prices for drugs, take title to drugs, and compete for physician and hospital business; and [3] changing the 4.3 percent (post-sequester) drug add-on payment in the model to reflect 6 percent of historical drug costs translated into a set payment amount, would lead to higher quality of care for beneficiaries and reduced expenditures to the Medicare program." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Following Federal Approval of CVS's Proposed Acquisition of Aetna, Attention Turns to New York State
"New York State regulators, including Superintendent Maria Vullo of the New York State Department of Financial Services, threatened to block CVS Health's $69 billion merger with health insurer Aetna if [1] CVS would not agree to hold the line on rising insurance premiums for Aetna's member population in New York State (approximately 1.1 million New Yorkers across the State); and/or [2] CVS Health refused to submit its CVS/Caremark pharmacy benefits manager (PBM) business to State regulation." (Sheppard Mullin)
CMS Proposes Rule to Require Drug Pricing Transparency
"The Proposal states that even though the List Price is typically not the price paid, it is a basic piece of factual information that the consumer should know in order to have at least one metric for comparison shopping.... The Proposal states that the List Price is simply a required disclosure of factual information in a commercial speech setting, thus requiring a lower level of First Amendment scrutiny.... The Proposal assumes that enforcement will come from private actions for false or misleading advertising under the federal Lanham Act." (Dorsey)
Requiring a Price Tag in Drug Commercials: Furthering Consumer Transparency or Government Overreach?
"The draft regulation does not yet provide guidance on certain important details, and CMS is requesting comment on a number of topics.... Among the most unusual elements of the draft regulation is its reliance on private lawsuits as the primary mechanism for enforcing the disclosure requirement.... Further, the draft regulation proposes to block states from taking enforcement actions based on state law claims for violations of the federal disclosure requirement, thus prohibiting a state that may be inclined to take more aggressive actions from doing so." (Faegre Baker Daniels)
New Federal Laws Ban Gag Clauses in Pharmacy Contracts
"On October 10, 2018 President Trump signed two bills that ban 'gag clauses' in pharmacy contracts. Congress passed the two bills -- one for Medicare prescription drug plans that will go into effect in January 2020, and another for commercial employer-based and individual policies effective immediately -- by almost unanimous vote ... While many states have already prohibited the use of these clauses, this is the first such action on a federal level." (McDermott Will & Emery)
[Guidance Overview] New California Law Aims to Increase PBM Disclosure and Transparency
"Under Assembly Bill (AB) 315, signed into law by Governor Jerry Brown late in September of 2018, employers should have access to more information from PBMs regarding drug costs and economic ties between PBMs and both pharmacies and pharmaceutical manufacturers. Employers may be able to use this information to negotiate better prices with PBMs or to otherwise control plan costs.... Employers will be able to request the information from PBMs quarterly." (Ogletree Deakins)
Drugmakers Funnel Millions to Lawmakers
"Since the beginning of last year, 34 lawmakers have each received more than $100,000 from pharmaceutical companies.... In the past decade, Congress has received $79 million from 68 pharma political action committees, or PACs, run by employees of companies that make drugs treating everything from cancer to erectile dysfunction." (Kaiser Health News)
The Future of Drug Rebates: Are They to Be or Not to Be?
"Several potential replacement models are being discussed that could take the place of rebates. A point-of-sale (POS) rebate model might be easiest to implement and could be an interim policy step.... The loss of rebate revenue could cause plan sponsors to re-evaluate their pricing models, plan designs, and underwriting process. Without a new model to represent the current net-of-rebate cost for all drugs, consumers could see higher out-of-pocket costs, or more limited benefits to keep premiums from rising." (Deloitte)
Express Scripts Covers Amgen, Lilly Migraine Therapies, Excludes Teva Drug
"The new migraine drugs were approved for the U.S. market within a few months of each other this year. That gave Express Scripts more leverage in demanding a discount in exchange for putting a therapy on its 'formulary,' or list of covered drugs.... All three drugs have a list price of $575 a month, or $6,900 a year." (Reuters)
HHS Announces Drug Price Transparency Proposal, Foreshadows Additional Regulatory Action to Address Drug Prices
"Since July, the White House has been reviewing a proposed rule that purports to modify the federal Anti-Kickback Statute's safe harbor protections for rebates as a means to shift the industry toward a system of fixed, up-front discounts. Secretary Azar encouraged the industry to undertake this transition voluntarily but noted that, as with the DTC advertising proposal, HHS is prepared to take regulatory action to spur industry reform." (Sidley Austin LLP)
Trump Administration Outlines Plan to Put Drug Prices in TV Ads
"For now, the proposal applies only to television ads, but CMS is taking comment on whether disclosure should extend to other forms of marketing, including social media. Some questioned whether the enforcement provisions in the rule have any teeth. Federal regulators would post lists of violators and count on companies to sue each other." (American Journal of Managed Care)
TV Ads Must Trumpet Drug Prices, Trump Administration Says; Pharma Tries a Plan B
"If approved, the proposed rule has no government enforcement mechanism that would force the companies to comply. Rather, it depends on shaming, noting that federal regulators would post a list of companies violating the rule. It would depend on the private sector to police itself with litigation." (Kaiser Health News)
[Guidance Overview] HHS Fact Sheet: What You Need to Know about Putting Drug Prices in TV Ads
"The 10 most commonly advertised drugs have list prices ranging from $535 to $11,000 per month or usual course of therapy.... 47 percent of Americans have high-deductible health plans, under which they often pay the list price of a drug until their insurance kicks in.... List prices are also what patients pay if a drug is not on their insurance formulary, and list prices help determine insurance plans' placement of drugs on their formulary." (U.S. Department of Health and Human Services [HHS])
 
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