Verma, Azar Take Aim at ‘Medicare for All’ Proposals

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Source: Fierce Healthcare

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma took another swipe at calls for a “Medicare for All” healthcare system this week, saying expanding those benefits to every American would “dilute” the program.

Verma’s comments, made at a session of The Atlantic Festival, echo a speech before the Commonwealth Club in July, where she said calls to expand Medicare are built on a “fundamental lack of understanding about the uniqueness of Medicare to the very specific population it serves.”

At the festival, Verma said instead that the Centers for Medicare & Medicaid Services must focus on the steps it’s taking to “strengthen” the program and ensure its long-term sustainability.

“Putting more people in the program is not going to solve the problem, and actually threatens the focus and security of the program for seniors,” Verma said.

When FierceHealthcare requested more details on how expanded enrollment would hurt seniors, CMS declined to provide specific data. But Verma did say in a statement that a single-payer health system built on Medicare would shift the focus of a program aimed at seniors to a larger population.

It was also unclear if Verma was also dismissing Democratic plans for a Medicare buy-in, which would expand enrollment voluntarily to people between the ages of 55 and 64.

Plans for either expanding Medicare enrollment through voluntary buy-ins or fully transforming Medicare into a single-payer system are still in their nascent stages, but with backers like Sens. Cory Booker, Kamala Harris and Elizabeth Warren—all in the 2020 presidential conversation—calls for growing government healthcare are going mainstream.

recent survey from the Bipartisan Policy Center found that 37% of adults want the government to play a greater role in regulating the price of healthcare goods, and nearly half (43%) of Democrats feel that ensuring greater access to health insurance is a key priority.

Jack Hoadley, Ph.D., a health policy analyst at Georgetown University and an expert on the Medicare program, told FierceHealthcare that it’s unlikely that expanding Medicare would get in the way of key strategies to improve the program, such as moving away from fee-for-service reimbursement to more value-based care.

“I don’t think any of that is helped or harmed in any way by discussion about expanding Medicare to other populations,” Hoadley said.

Hoadley said that any expansion of the program, regardless of size, would require thoughtful design and planning, and all those decisions would ultimately impact the way Medicare implements alternative payment models and other changes. But, he said, these steps to improve the efficiency of the program should not preclude talk of potentially growing its enrollment.

Department of Health and Human Services Secretary Alex Azar has also drawn a clear line in the sand on Medicare for All. In a speech last week, hosted by the Nashville Healthcare Council, Azar said that expanding the program to all Americans would eliminate their ability to make health choices for themselves.

In addition, Azar said, paying everyone at Medicare rates—which are about 40% less than private insurance rates—could lead some physicians to reject insurance entirely and “move to accepting cash” for care. Azar warned that buy-ins would cut down on private insurance enrollment, which could “consolidate” access to the best doctors to just that population.

“It’s simple math: Higher payments from commercial insurers help doctors take on seniors whose Medicare plans pay less,” Azar said. “It’s far from an ideal set-up, but a single government system would completely unravel it, without a theory for how seniors’ access would be protected.”

JoAnn Volk, a research professor at the Georgetown Center on Health Insurance Reforms who focuses in on Medicare expansion policies, told FierceHealthcare that much of this conversation is the requisite partisan posturing—clearly, a single-payer health system would not gel with the Trump administration’s vision.

Volk said that a public option, for example, would be a solution for any “bare counties” under the Affordable Care Act, in which no insurer currently operates in the exchanges. The administration is especially focused on expanding choice, and she said that some of its steps—such as expanding short-term and association health plans—are likely fragmenting the insurance market instead of strengthening it.

“They need to promote their vision of what is market stabilizing,” she said.

Medicare Advantage Plans Shift Their Financial Risk to Doctors

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Source: Modern Healthcare

Dr. Christopher Rao jumped out of his office chair. He’d just learned an elderly patient at high risk of falling was resisting his advice to go to an inpatient rehabilitation facility following a hip fracture.

He strode into the exam room where Priscilla Finamore was crying about having to leave her home and husband, Freddy.

“Look, I would feel the same way if I was you and did not want to go to a nursing home, to a strange place,” Rao told her in September, holding her hand. “But the reality is, if you slip at home even a little, it could end up in a bad, bad way.”

After a few minutes of coaxing, Finamore, 89, relented and agreed to go into rehab.

Keeping patients healthy and out of the hospital is a goal for any physician. For Rao, a family doctor in this retiree-rich city 100 miles north of Miami, it’s also a wise financial strategy.

Rao works for WellMed, a physician-management company whose doctors treat more than 350,000 Medicare patients at primary care clinics in Florida and Texas. Instead of being reimbursed for each patient visit, WellMed gets a fixed monthly payment from private Medicare Advantage plans to cover virtually all of their members’ health needs, including drugs and physician, hospital, mental health and rehabilitation services.

If they can stay under budget, the physician companies profit. If not, they lose money.

This model — known as “full-risk” or “global risk” — is increasingly used by Medicare plans such as Humana and UnitedHealthcare to shift their financial exposure from costly patients to WellMed and other physician-management companies. It gives the doctors’ groups more money upfront and control over patient care.As a result, they go to extraordinary lengths to keep their members healthy and avoid expensive hospital stays.

WellMed, along with similar fast-growing companies such as Miami-based ChenMed, Boston-based Iora Health and Chicago-based Oak Street Health, say they provide patients significantly more time with their doctors, same-day or next-day appointments and health coaches. These doctors generally work on salary.

ChenMed doctors encourage their Medicare patients to visit their clinic every month — for no charge and with free door-to-door transportation — to stay on top of preventive care and better manage chronic conditions. If patients are not feeling well after-hours, ChenMed even will send a paramedic to their home.

“We can be much more creative in how we meet patient needs,” said Iora CEO Rushika Fernandopulle. “By taking risk, we never have to ask … ‘Do we get paid for this or not?’”

A way to ‘provide less care’

Some patient advocates, pointing to similar experiments that failed in the 1990s, fear “global risk” could lead doctors to skimp on care — particularly for expensive services such as CT tests and surgical procedures.“At the end of the day, this is a way to keep costs down and provide less care,” said Judith Stein, executive director of the Center for Medicare Advocacy.

Dr. Brant Mittler, a Texas cardiologist and trial attorney who has followed the issue, said Medicare Advantage members should be suspicious.

“Patients don’t know that decisions made on their behalf are often financially based. There may be pressure on doctors to cut corners to save money and that may not be in the best interests of a patient’s health,” he said.

The insurers and physician groups disagree. They said limiting necessary care would only exacerbate a patient’s health problems and cost the doctors’ group more money.

Noting that Medicare members stay with Humana an average of eight years, Roy Beveridge, the insurer’s chief medical officer, said the plan would be unwise to skimp on care because that would eventually leave the company with sicker patients and longer hospitalizations.

“It makes even less sense for physicians at financial risk to skimp on care because patients are typically with their physicians much longer than they are with a health plan,” he said.

A study that examined care at ChenMed, published last month in the American Journal of Managed Care, found health costs were 28 percent lower among patients who had more than double the number of typical visits with their primary physician. The study was conducted by researchers at ChenMed and the University of Miami.

To offer more personal care, ChenMed doctors typically see only about a dozen patients per day — about half as many as is usual for a doctor who gets paid for each individual service.

Medicare beneficiaries, who can choose a private health plan during the open-enrollment period that runs from Oct. 15 to Dec. 7, generally have no idea if their health plan has ceded control of their care to these large doctors’ groups.

After choosing a Medicare Advantage plan, they generally sign up for a medical group that is part of their health plan’s network, often because doctors are close to where they live or because the doctors offer extra benefits such as free transportation to appointments.

Eloy Gonzalez, 71, of Miami, said that before switching to ChenMed a couple of years ago his doctors always seemed to be in a hurry when he saw them. He’s happy with his ChenMed physicians.

On a recent visit, he spent nearly 20 minutes with Dr. Juana Sofia Recabarren-Velarde talking about keeping his blood pressure and lung condition under control. She also showed him exercises to manage back and shoulder pain.

“If she thinks she needs to see me once a month to monitor my blood pressure and see if anything else is happening, it’s OK with me,” said Gonzalez, who pays nothing for the office visits or generic drugs under his Humana Medicare Advantage plan with ChenMed.

A growth spurt

Nearly one-third of the 57 million Medicare beneficiaries are covered by private Medicare Advantage plans — an alternative to government-run Medicare — and federal officials have estimated that the proportion will rise to 41 percent over the next decade. The government pays these plans to provide medical services to their members.The “global risk” system has been used in South Florida and Southern California since the late 1990s and nearly half of Medicare Advantage members in those regions get care in the model. The use has spread further in the past two years as large physician companies have become more common, and about 10 percent of Medicare Advantage plan members across the nation are in them now, health consultants say.

In addition, new information technology allows these groups to better track their patients. With mixed results, Medicare Advantage insurers for years offered doctors bonuses to meet certain quality care standards, such as getting members vaccinated against the flu or controlling diabetes and other chronic diseases.

Under the “global risk” arrangements, the health plans give the physician companies the bulk of their Medicare funding when they take on the mantle of being financially responsible for all patient care.

For the doctors’ groups, the arrangement means they get paid a large amount of money upfront for patient care and don’t have to worry about billing or having to get insurers to always preapprove treatments.

Because the “global risk” arrangements are designed to reduce plans’ costs, they potentially allow the companies to lower premiums and attract more customers, said Mark Fendrick, director of the University of Michigan’s Center for Value-Based Insurance Design.

“I see this trend continuing to grow as clinicians will be accountable for the first time for the care they provide,” he said.

Historical lessons

But Ana Gupte, a securities analyst with Leerink Partners in New York, noted providers can also lose money if not successful.That’s what happened in the late 1990s when some physician-management companies such as FPA Medical Management and PhyMatrix took on financial risk from insurers only to later go bankrupt, interrupting care to thousands of patients.

Health insurers say they now trust only doctors’ groups that have shown they can handle the financial risk. They also retain varying levels of control. Insurers set benefits, handle member complaints and review which doctors are allowed in its network.

Martin Graf, a partner with consulting firm Oliver Wyman, said the old financial arrangements failed because provider groups did not manage the risks facing their patients.

“Now they know physician groups must be vigilant about their patients — whether they are in the office or not,” he said. “Everyone is aware of the failure of the past.”

Why Congress is Poised to Give the Drug Industry a $4B Windfall


Source: Politico

President Donald Trump may rail against drug companies “getting away with murder,” but Congress appears to be moving in the opposite direction — helping to boost industry profits.

While the pharmaceutical industry lost an eleventh-hour bid last week to attach a $4 billion windfall to Congress’ bipartisan opioid bill, lawmakers and industry analysts expect it to try again with good prospects of prevailing — perhaps as soon as the lame-duck session after the November election.

Drugmakers took a rare financial hit in the bipartisan budget deal passed in February when they were put on the hook to pay $11.8 billion toward senior medicines over 10 years in the fight over the Medicare drug benefit “doughnut” hole. Now they’re trying to soften that blow, seeking relief from at least $4 billion of those costs in what they describe as “a technical correction“ to a calculation that made the industry responsible for more money than lawmakers had sought. Congressional aides to senior members of both parties say they have a good chance of success — a stark reminder of how challenging it will be for lawmakers to take on the drug lobby, even as voters across party lines demand lower costs of medicines.

Health industry lobbyists say the change is being pushed by House Republican leadership, including Speaker Paul Ryan, Majority Leader Kevin McCarthy and Energy and Commerce Chairman Greg Walden and Senate Minority Leader Chuck Schumer on the other side of the aisle, who was also demanding consumer-friendly trade-offs as part of the package.

But drug price advocates say that what the industry calls a fix is “really … a multi-billion dollar bailout with no relief from out-of-control drug prices,” said Lauren Blair spokesperson for the Campaign for Sustainable Rx Pricing, a coalition of health insurers, hospitals, physicians and other groups focused on the cost of medicines.

K Street watchers say the industry’s clout is largely a function of its lobbying might along with the geographic dynamics of the industry. Drug companies employ many Americans, with the largest concentration in more liberal states like California and New York, creating alliances with lawmakers who might otherwise be more willing to push back on the industry. And they’re adept at conveying the message that their products extend and improve lives.

“This is an industry that has deep pockets that can afford to check all the boxes,” said Sheila Krumholz, executive director of the Center for Responsive Politics, a nonprofit that tracks money and its influence on politics. “And voters themselves are conflicted.”

“On the one hand, there is a view that these companies are rapacious in their drug pricing and we have the poster boys in Martin Shkreli and Heather Bresch,” she added, referring to the Turing Pharmaceuticals CEO who jacked up prices and mocked Congress before being jailed on unrelated charges and Bresch, CEO of the company that makes Epipens. “On the other hand, we look to these companies as star innovators in the constellation of U.S. industry and the saviors in terms of providing cures for horrific disease.“

The drug lobby justifies its push for $4 billion in relief by saying that the Congressional Budget Office initially estimated the February 2018 change would save the government $7.7 billion over 10 years for senior medicines, but shortly after the law was enacted, CBO learned of new data on prescription drug spending that changed its estimate of government savings to $11.8 billion. The budget measure requires drug manufacturers to provide deeper discounts to Medicare beneficiaries whose spending on prescription drugs falls within a range called the coverage gap, or the “doughnut hole.” The discount, now 50 percent on brand-name drugs, is set to rise next year to 70 percent.

The change was designed to provide some financial relief to Medicare Part D beneficiaries with high prescription drug expenses who have to pay the cost of their medicines out of pocket once they reach a certain cost threshold — until they hit a yearly limit. It also shifted more of those costs from insurance companies to the drug industry in an effort to lower insurance premiums and save taxpayers money.

The Pharmaceutical Research and Manufacturers of America said it plans to keep working with lawmakers of both parties to change its doughnut hole contribution, as well as to seek changes to a so-called “doughnut hole cliff,“ that will require seniors to spend more money to get out of the coverage gap period of their drug benefit starting in 2020.

Fixing that would save money for seniors and the drug companies, as would rolling back drug companies’ doughnut hole responsibility, PhRMA argues, because the current framework doesn’t incentivize insurance companies to negotiate for lower-cost drugs. Under PhRMA’s proposal, insurance companies would pay more for drugs, and drug companies say that should motivate them to get better deals for seniors.

Correcting CBO’s error “would protect seniors by helping restore balance to payment responsibility and securing the Part D program for the future. Further, combining that fix with a solution to prevent the looming $1,250 spike in our-of-pocket costs in the [doughnut] hole, would save seniors money and leave seniors … better off,” PhRMA said in a statement.

GOP lawmakers have echoed this messaging. Walden “is supportive of continued efforts to correct for a faulty CBO analysis,” a committee aide told POLITICO.

Democratic support for the change is less assured — buy-in after the November elections will likely depend on the package of trade-offs, as well as the makeup of the new Congress. Schumer declined to comment for this story.

Health industry lobbyists say the most likely vehicle for the change is when lawmakers extend the funding of several agencies subject to a continuing resolution, which expires Dec. 7. But groups that successfully mobilized to prevent PhRMA’s win in the opioids package say they’ll be ready to oppose it again.

“I have no clue what politician in their right mind would push a $4 billion bailout for drug companies when drug companies’ unpopularity are at the highest levels in American politics,” said Ben Wakana, executive director of Patients for Affordable Drugs NOW. “It seems like political malpractice.”

In Washington, though, money talks and the drug industry has a lot of it.

The pharmaceuticals and health products sector spends more money on lobbying than any other industry in Washington — nearly $151 million so far in 2018, compared to the next biggest spender — the insurance industry, at $82 million, according to the Center for Responsive Politics. The bulk of that spending is by pharmaceutical companies and trade groups, Krumholz said.

That includes contributions from the main drug lobbying organization, PhRMA, which has spent $15.7 million this year on lobbying, making it the third highest single spender on lobbying. PhRMA also spent over half a million on direct campaign contributions for the 2018 election cycle.

The pharmaceutical and health products sector also has 980 lobbyists who previously worked in government, giving them personal connections to many of the Congressional offices and agencies they target — that’s more former government employees than any other industry and makes up nearly two-thirds of the industry’s lobbyists, per the Center for Responsive Politics.

“For a long time, politicians have been able to do pharma favors, bring in a lot of cash and that didn’t hurt you in the polls,” said Shawn Gremminger, senior director of federal relations at Families USA, a left-leaning group focused on improving U.S. health care for American consumers. “So long as our campaign finance system remains essentially the same, I think the pharmaceutical industry is going to continue to exercise really outsized influence in D.C.,” Gremminger said.

But others say it’s too simplistic to attribute the legislative support for PhRMA’s proposal simply to the industry’s financial clout.

Former Pennsylvanian Republican Rep. Phil English, who now lobbies for a few drug companies, says it’s important to think about how geography creates close alliances between some very progressive members of Congress and pharmaceutical companies.

“There are places in the U.S. where life sciences and pharmaceutical companies are the core part of the good-paying jobs — suburban Philadelphia, New Jersey, some of the suburbs in Boston, California, Chicago,” English said. “For representatives of these areas, what happens to the drug industry is a constituent issue as much as anything else,” English said.

The drug industry also indirectly influences lawmakers through its support for patient advocacy groups, to whom it contributed at least $116 million in 2015, per an analysis by Kaiser Health News.

“And as the years go by, you see the progression of the disease, people talking about how important these prescription drugs are for them,“ said Jason Altmire, a former Democratic representative from Pennsylvania, who has lobbied on behalf of other parts of the health sector. “There’s nothing stronger than seeing that right in front of you, with people that you have become friends with that have a personal story to tell. It’s not about money. It’s about your constituents and people that you know.”

The drug industry has also gotten pro-consumer measures on the table as part of the discussion. Besides the fix to the Medicare Part D cliff, it is also pushing a version of a bill known as the CREATES Act, which aims to speed generic competition to branded medicines by preventing brand drug companies from abusing FDA-mandated safety programs to keep out cheaper competition.

A Democratic source familiar with the negotiations over PhRMA’s provision in the opioid bill blamed lack of agreement on the CREATES Act, for keeping the changes out of the opioid measure.

But opponents also say these trades aren’t enough to justify what they call a windfall to the industry

Seniors’ groups including AARP, the insurance industry lobby and the Campaign for Sustainable Rx Drugs say they will continue watching closely to try to block PhRMA’s continuing efforts.

“They have the ability where … they just wait out the clock, wait until people aren’t paying close attention, wait until it’s a low-profile spending bill at the end of the year … and before you know it, there is a provision in there that gives pharma a big handout,” said Families USA’s Gremminger. “So just because we’ve won the last three rounds doesn’t mean we are going to win round four. I certainly hope so and we’re fighting for it. But you know, they are really, really clever.”

Feds Settle Huge Whistleblower Suit Over Medicare Advantage Fraud

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Source: Kaiser Health News

One of the nation’s largest dialysis providers will pay $270 million to settle a whistleblower’s allegation that it helped Medicare Advantage insurance plans cheat the government for several years.

The settlement by HealthCare Partners Holdings LLC, part of giant dialysis company DaVita Inc., is believed to be the largest to date involving allegations that some Medicare Advantage plans exaggerate how sick their patients are to inflate government payments. DaVita, which is headquartered in El Segundo, Calif., did not admit fault.

“This settlement demonstrates our tireless commitment to rooting out fraud that drains too many taxpayer dollars from public health programs like Medicare,” said U.S. Attorney Nick Hanna in announcing the settlement Monday.

Medicare Advantage plans, which now enroll more than 1 in 3 seniors nationwide, have faced growing government scrutiny in recent years over their billing practices. At least a half-dozen whistleblowers have filed lawsuits accusing the insurers of boosting payments by overstating how sick patients are. In May 2017, two Florida Medicare Advantage insurers agreed to pay nearly $32 million to settle a similar lawsuit.

The DaVita settlement cites improper medical coding by HealthCare Partners from early 2007 through the end of 2014. The company, according to the settlement agreement, submitted “unsupported” diagnostic codes that allowed the health plans to receive higher payments than they were due. Officials did not identify the health plans that overcharged as a result.

One such “unsupported” code was for a spinal condition known as spinal enthesopathy that was improperly diagnosed in patients in Florida, Nevada and California from Nov. 1, 2011, to Dec. 31, 2014, according to the settlement. The agreement did not say how much health plans took in from the unsupported codes.

The company also contracted with a Nevada firm from 2010 through January 2016 that sent health care providers to visit patients in their homes, a controversial practice that critics have long held is done largely to inflate Medicare payments. These house calls also generated “unsupported or undocumented” diagnostic codes, according to the settlement.

Officials said that DaVita disclosed the practices to the government. It acquired HealthCare Partners, a large California-based doctors’ group, in 2012. They said the government agreed to a “favorable resolution” of the allegations payment because of the self-disclosure.

In a statement, DaVita said the settlement “reflects close cooperation with the government to address practices largely originating with HealthCare Partners.” DaVita said the settlement will be paid with escrow funds set aside by the former owners.

“This case involved illegal conduct in which patients’ medical conditions were improperly reported and were not corrected after further review — all for the purpose of boosting the bottom line,” reads the government’s statement.

The settlement also resolves allegations made by whistleblower James Swoben that HealthCare Partners knew that many of the diagnostic codes were unsupported, but failed to report them. The company reported only cases in which it deserved higher reimbursement, while ignoring codes that would slash payments, a practice known as “one-way” chart reviews.

Swoben, a former employee of a company that did business with DaVita, will receive just over $10 million for the settlement of the “one-way” allegations, under the federal False Claims Act, which rewards whistleblowers who expose fraud.

Drugmakers Play The Patent Game To Lock In Prices, Block Competitors

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Source: Kaiser Health News

David Herzberg was alarmed when he heard that Richard Sackler, former chairman of opioid giant Purdue Pharma, was listed as an inventor on a new patent for an opioid addiction treatment.

Patent No. 9861628 is for a fast-dissolving wafer containing buprenorphine, a generic drug that has been around since the 1970s. Herzberg, a historian who focuses on the opioid epidemic and the history of prescription drugs, said he fears the patent could keep prices high and make it more difficult for poor addicts to get treatment.

“It’s hard not to have that reaction of, like … these vultures,” said Herzberg, an associate professor at the University at Buffalo.

James Doyle, vice president and general counsel of Rhodes Pharmaceuticals, the Purdue subsidiary that holds the patent, said in an email statement that the company does not have a developed or approved product and “therefore no money has been made from this technology.”

“The invention behind the buprenorphine patent in question was developed more than a dozen years ago,” he wrote. “If a product is developed under this patent, it will not be commercialized for profit.”

Yet, the patenting of a small change in how an existing drug is made or taken by patients is part of a tried-and-true pharmaceutical industry strategy of enveloping products with a series of protective patents.

Drug companies typically have less than 10 years of exclusive rights once a drug hits the marketplace. They can extend their monopolies by layering in secondary patents, using tactics critics call “evergreening” or “product-hopping.”

Lisa Larrimore Ouellette, a patent law expert at Stanford University, said the pharmaceutical industry gets a greater financial return from its patent strategy than that of any other industry.

AztraZeneca in 2001 famously fended off generic versions of its blockbuster heartburn medicine Prilosec by patenting a tweaked version of the drug and calling it Nexium. When Abbott Laboratories faced multiple generic lawsuits over its big moneymaker Tricor, a decades-old cholesterol drug, it lowered the dosage and changed it from a tablet to a capsule to win a new patent.

And Forest Laboratories stopped selling its Alzheimer’s disease drug Namenda in 2014 after reformulating and patenting Namenda XR to be taken once a day instead of twice.

Another common strategy is to create what Food and Drug Administration Commissioner Scott Gottlieb calls “patent thickets,” claiming multiple patents for a single drug to build protection from competitors. AbbVie’s rheumatoid arthritis drug Humira has gained more than 100 patents, for example.

The U.S. Patent and Trademark Office awards patents when an innovation meets the minimum threshold of being new and non-obvious. Secondary patents are routinely granted to established drugs when an improvement is made, such as making it a once-a-day pill instead of twice a day, said Kristina Acri, an economist and international intellectual property expert at the Fraser Institute and Colorado College.

“Is there a better way? Maybe, but that’s not what we’re doing,” Acri said.

The controversial patent that Sackler and five co-inventors obtained is widely known as a “continuation patent.” (The original patent application for the wafer was filed in August 2007.)

Continuation patents do not necessarily extend the patent life of a drug, but they can have other uses. In 2016, Rhodes filed a lawsuit against Indivior alleging patent infringement.

Indivior, formerly part of Reckitt Benckiser, sells a film version of the popular addiction treatment drug Suboxone that is placed under the tongue — an oral medicine similar to what Rhodes has patented. Indivior’s comes in a lime flavor.

Indivior’s film, which federal regulators approved in 2010, dominates the market with a 54 percent average market share, according to the company’s most recent financial report. And the company has vigorously fought rivals, including filing lawsuits against firms such as Teva Pharmaceutical Industries, which sought approval to manufacture generic versions. Indivior declined to comment.

The Rhodes Pharmaceuticals version would be a wafer that melts quickly in the mouth. The inventors list potential flavors including mint, raspberry, licorice, orange and caramel, according to the patent.

For opioid historian Herzberg, the patent battles between companies like Rhodes and Indivior are “absolute madness.”

Decisions on what is available on the market to treat addicts should be based on what is the best way to treat the people who have the problem, he said.

Patent battles, Herzberg said, are “not how you want drug policy getting made.”

Attempts to change the patent system have intensified over the past decade as prices of prescription drugs continue to climb.

In 2011, President Barack Obama signed the America Invents Act, which included the creation of the Patent Trial and Appeal Board. The PTAB is an alternative to using the cumbersome U.S. court system to challenge weak patents. Generic drug manufacturers have used the board’s “inter partes review” process and overturned 43 percent of the patents they challenged, according to recent research.

Critics of the administrative process, including the pharmaceutical industry trade group PhRMA, said it creates “significant business uncertainty for biopharmaceutical companies.” Often companies have to defend their products twice — both in the courts as well as before the PTAB, said Nicole Longo, PhRMA’s director of public affairs.

Drug giant Allergan attempted to overcome the PTAB’s review process by arguing that the patent couldn’t be challenged at the review board because they sold the patent to the St. Regis Mohawk Tribe, which had sovereign immunity. A federal appeals court ruled this summer that Allergan could not shield its patents from the PTAB review this way.

This year, several members of Congress proposed bills that would unwind or limit changes made by the America Invents Act, though nothing is likely to happen before the midterm elections. The STRONGER Patents Act, introduced in both the House and Senate, would weaken the PTAB board by aligning its claims standards with what has been established by court rulings.


House Overwhelmingly Passes Bill to Fight Opioid Crisis

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Source: The Hill

The House on Friday overwhelmingly passed legislation meant to fight the opioid epidemic, a moment of bipartisanship amid a series of fierce partisan battles.

The bill, which passed 393-8, is the product of months of work in both chambers. The Senate is expected to soon send the measure to President Trump’s desk.

The legislation includes a range of measures aimed at fighting the deadly opioid crisis, which killed more than 42,000 people in 2016, according to the Centers for Disease Control and Prevention.

The bill lifts some limits on Medicaid paying for care at addiction treatment facilities, addressing restrictions that lawmakers called outdated. It cracks down on illicit opioids being imported by mail and fueling the crisis across the United States.

The legislation also lifts limits on nurse practitioners and other providers being able to prescribe buprenorphine, a drug used in addiction treatment.

“If this legislation can save one life, bring help to one person, that is what matters,” said Speaker Paul Ryan (R-Wis.). “It’s going to do far more than that.”

Several GOP lawmakers in tough reelection races spoke out in support of the measure and touted provisions they sponsored that were included in the bill, something that they can tout on the campaign trail.

Democrats praised the bill as a good first step but said that more needs to be done, including more funding.

“This bill is an important step, but we must do a lot more. The opioid crisis continues to get worse, a lot more needs to be done to provide treatment and expand the treatment infrastructure,” said Rep. Frank Pallone Jr. (N.J.), the top Democrat on the House Energy and Commerce Committee. “And more resources are needed to support the families and communities impacted by this crisis.”

Sen. Elizabeth Warren (D-Mass.), for example, has a bill to provide $100 billion to fight the crisis over 10 years, which she says is closer to what is necessary to truly address the crisis.

Friday’s bill comes after the government funding bill increased anti-opioid funding up to $3.8 billion this year.

Drug Industry Tries to Slip $4 Billion Windfall Into Opioid Bill

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Source: New York Times

Drug companies usually get what they want in public-policy battles on Capitol Hill, but a move by the pharmaceutical industry to grab $4 billion from the federal Treasury in a bill that is supposed to address the nation’s deadly opioid epidemic is meeting fierce resistance.

At issue is a small measure that the Pharmaceutical Research and Manufacturers of America, or PhRMA, has deemed a “technical correction” to a bipartisan budget law signed by President Trump in February. The law required drug manufacturers to provide deeper discounts to Medicare beneficiaries whose spending on prescription drugs falls within a range called the coverage gap, or the “doughnut hole.” The discount, now 50 percent on brand-name drugs, is set to rise next year to 70 percent.

The change sought by the drug industry has nothing to do with the scourge of opioids, but such provisions are often tucked quietly into popular, swiftly moving bills, then discovered months later. In a sign of the times, members of Congress and consumer advocates quickly mobilized opposition.

“Big Pharma is trying to hijack the bill and turn it into a giant pharmaceutical company bailout,” Senator Tina Smith, Democrat of Minnesota, said in a Twitter post.

The proposal “will increase prescription drug costs for older Americans while providing a windfall of billions of dollars to the drug industry,” said AARP, the lobby for 38 million Americans 50 and older.

Senator Ron Wyden of Oregon, the senior Democrat on the Finance Committee, said the relief for pharmaceutical companies would cost more than twice as much as the bill spends to prevent and treat opioid addiction.

Opponents said Monday that they were confident they could block the relief sought by drug companies, at least for now.

The Congressional Budget Office had initially estimated that the requirement for drug companies to provide larger discounts would reduce federal spending on Medicare’s drug benefit by a total of $7.7 billion through 2027. Shortly after the law was enacted, the budget office discovered additional information and raised its estimate of the savings to $11.8 billion.

Drug makers argue that Congress intended to save just $7.7 billion and should now give back the $4 billion difference. Medicare beneficiaries could still receive discounts of 63 percent, the industry says.

The Trump administration has not publicly engaged in this particular fight, but has stoked skepticism of the industry. Mr. Trump has repeatedly said that drug makers are “getting away with murder.”

Pharmaceutical companies see the opioids bill as an attractive vehicle because swift passage is a political priority for members of both parties this election year. Lawmakers are urgently trying to work out differences between the versions passed by votes of 396 to 14 in the House and 99 to 1 in the Senate.

Medicare’s outpatient drug benefit, known as Part D, is delivered entirely by private companies like UnitedHealth, Humana and CVS Health.

“We are focused on ensuring Medicare Part D is secure for the future by correcting a technical error” by the Congressional Budget Office, said Stephen J. Ubl, the president and chief executive of PhRMA, who has led lobbying on the issue.

Prescription drug plans pay some of the drug costs incurred by people in the coverage gap. In the Bipartisan Budget Act in February, Congress reduced the insurers’ share to 5 percent; it would otherwise have been 20 percent next year.

In a classic spat between two powerful industries, drug companies say insurers should pay more so drug makers can pay less. Insurers will do a better job managing the cost of Medicare’s drug benefit if they bear more financial risk, drug companies say, and many health economists agree.

America’s Health Insurance Plans, the chief lobby for insurers, opposes any changes that would increase their share of drug costs in the coverage gap.

Drug companies are urging Congress to provide relief to some Medicare beneficiaries in another way: by delaying a sharp increase in their out-of-pocket drug costs scheduled to occur in 2020, when the coverage gap grows much wider.

The Affordable Care Act temporarily shielded beneficiaries from 2014 to 2019, but that provision of the law expires in 2020.

Mark E. Miller, the former executive director of a federal commission that advises Congress on Medicare, said: “In the context of the current debate, I would not roll back the drug discounts. We need broader changes in the structure of Medicare’s drug benefit. If the discounts are rolled back, patients and taxpayers should get something in return, to bring more competition to the market and drive down drug prices.”

Congress has been considering several proposals to speed the approval of lower-cost generic versions of brand-name medicines. One would make it easier for developers of generic drugs to obtain samples of brand-name products, which they need to show that the generic version is equivalent to the original.

Allowing generic drugs to enter the market sooner could save money for Medicare, Medicaid and other federal health programs.

Under a proposal approved in June by the Senate Judiciary Committee, a federal court could order a brand-name drug maker to provide samples of its product to a generic company “on commercially reasonable, market-based terms.” The court could also award damages to the generic company.

Lawmakers have discussed adding some version of this proposal to the opioids bill. But House Republican leaders are wary of any changes that could generate additional litigation.

As States Try To Rein In Drug Spending, Feds Slap Down One Bold Medicaid Move

Source: Kaiser Health News

States serve as “laboratories of democracy,” as U.S. Supreme Court Justice Louis Brandeis famously said. And states are also labs for health policy, launching all kinds of experiments lately to temper spending on pharmaceuticals.

No wonder. Drugs are among the fastest-rising health care costs for many consumers and are a key reason health care spending dominates many state budgets — crowding out roads, schools and other priorities.

Consider Vermont, California and Oregon, states that are beginning to implement drug price transparency laws. In Nevada, the push for transparency includes the markup charged by pharmacy benefit managers (PBMs). In May, Louisiana joined a growing list of states banning “gag rules” that prevent pharmacists from discussing drug prices with patients.

State-based experiments may carry even greater weight for Medicaid, the federal-state partnership that covers roughly 75 million low-income or disabled Americans.

Ohio is targeting the fees charged to its Medicaid program by PBMs. New York has established a Medicaid spending drug cap. In late June, Oklahoma’s Medicaid program was approved by the federal Centers for Medicare & Medicaid Services to begin “value-based purchasing” for some newer, more expensive drugs: When drugs don’t work, the state would pay less for them.

But around the same time, CMS denied a proposal from Massachusetts that was seen as the boldest attempt yet to control Medicaid drug spending.

Massachusetts planned to exclude expensive drugs that weren’t proven to work better than existing alternatives. The state said Medicaid drug spending had doubled in five years. Massachusetts wanted to negotiate prices for about 1 percent of the highest-priced drugs and stop covering some of them. CMS rejected the proposal without much explanation, beyond saying Massachusetts couldn’t do what it wanted and continue to receive the deep discounts drugmakers are required by law to give state Medicaid programs.

The Medicaid discounts were established in 1990 law based on a grand bargain that drugmakers say guaranteed coverage of all medicines approved by the Food and Drug Administration in exchange for favorable prices.

The New England Journal of Medicine dives into the CMS decision regarding Massachusetts and its implications for other state Medicaid programs in a commentary by Rachel Sachs, an associate professor of law at Washington University in St. Louis, and co-author Nicholas Bagley. They dispute the Trump administration’s claim that Massachusetts’ plan would violate the grand bargain.

We talked with Sachs about Massachusetts’ proposal and the implications for the rest of the country. Her answers have been edited for length and clarity.

Q: Why do you think states, such as Massachusetts, should be allowed to exclude some drugs, a move the pharmaceutical industry has said would break the deal reached back in 1990?

In our view, there’s a way to frame it where the bargain has been broken and Massachusetts is simply trying to restore the balance. The problem is that the meaning of FDA approval has changed significantly over the last almost 30 years. Now we have a lot more drugs that are being approved more quickly, on the basis of less evidence — smaller trials, using surrogate endpoints — where the state has real questions about whether these drugs work at all, not only whether they are good value for the money.

Q: You suggest that Massachusetts could make a reasonable case if it chose to challenge the CMS denial. How?

CMS did not explain why it didn’t grant Massachusetts’ waiver. It needs to give reasons for denying something that Massachusetts, in our view, has the legal ability to do. CMS’ failure to give reasons in this case resembles their failure to give reasons in a number of other cases that have recently led courts to strike down actions by the Trump administration for failure to explain the actions that they were taking.

(Note: A spokeswoman for Health and Human Services in Massachusetts says the state is not going to challenge the CMS decision.)

Q: While CMS blocked the Massachusetts experiment, it has approved the value-based purchasing plan in Oklahoma, and New York has capped its Medicaid drug spending. Aren’t those signs of flexibility for states?

In some ways, yes, and in other ways, no. New York passed a cap on state Medicaid pharmaceutical spending. But once the state hits that cap, it doesn’t mean the state will stop paying for prescription drugs. It just means the state is empowered to negotiate with some of these companies and seek additional discounts. They didn’t need CMS approval for this. New York doesn’t have the ability to say “If you don’t take this deal, we’re not going to cover this product.”

Oklahoma is pursuing outcomes-based pricing, which is of interest. It’s the first state to express interest in doing so. However, there are a lot of observers who are skeptical that outcomes agreements of this kind will materially lower prices or if they just provide companies cover to charge higher prices in the first instance.

Q: So what options do you see ahead for states given what happened in Massachusetts with the Medicaid waiver?

Unfortunately, states are quite limited in what they’re able to do on their own, in terms of controlling prescription drug costs — both costs that are borne by the state in its capacity as a public employer and its capacity as an insurer for the Medicaid population. and then more generally for the many citizens who are on private insurance plans throughout the state.

This is a real problem, this concern of federal pre-emption where states’ ability to go beyond federal law is often limited. So what we’re seeing now is more states like Massachusetts and Vermont taking action that forces the federal government to do something or say something. States are increasingly putting pressure on the federal government because they know that their ability to act on this problem of drug pricing is limited.

Paper Jam: California’s Medicaid Program Hits ‘Print’ When The Feds Need Info

Source: California Healthline

In the shadow of Silicon Valley, the hub of the world’s digital revolution, California officials still submit their records to the feds justifying billions in Medicaid spending the old-fashioned way: on paper.

Stacks and stacks of it.

Stuck with decades-old technology, the nation’s largest Medicaid program forces federal officials to sift through thousands of documents by hand rather than sending electronic files. That’s one of the critical findings in a Sept. 5 report from the federal government’s chief watchdog citing inefficient and lax oversight of Medicaid nationwide.

To illustrate, the U.S. Government Accountability Office published a photo showing piles of records submitted for one three-month period. One folder was placed upright to show the height of the heap.

“It’s really amazing when you look at that picture,” said Carolyn Yocom, a health care director at the GAO who focuses on Medicaid, the federal-state health insurance program for low-income people. “For this type of reporting on expenditures, California really should be able to provide that electronically.”

California, with more than 13 million Medicaid enrollees, said it’s hamstrung because it uses 92 separate computer systems to run its Medicaid program — although it has plans underway to modernize its technology.

“Given system limitations and the magnitude of the supporting documentation, providing it electronically is currently not feasible,” the California Department of Health Care Services said in a statement.

The state’s Medicaid program, known as Medi-Cal, has struggled with technology for years. The state thought it had a solution in 2010 when it awarded a $1.7 billion contract to Xerox, which included $168 million for a new system. But after years of delay, the state scrapped the contract in 2016 and started from scratch, leaving the patchwork system in place a few more years.

Nationwide, despite industry buzz about electronic medical records, smartphone apps and artificial intelligence, a lot of paper is still being pushed across the health care system. Consider all those forms patients repeatedly fill out in the waiting room, the screeching sound of fax machines inside doctors’ offices and the bulging binders of patients’ records in file rooms.

Under Medicaid, states submit data quarterly to the federal government on their spending and include supporting documents such as invoices, cost reports and eligibility records. In California, reports on spending are shared electronically, but the copious supporting documentation required for federal review is not, according to the GAO.

When the Xerox venture failed, the company agreed to pay California more than $123 million as part of a settlement agreement, according to state officials.

Meantime, Conduent, the services unit of Xerox that was spun off into a separate company, was left to keep operating the system and process claims.

Last month, the state awarded a contract to DXC Technology of Tysons, Va., to take over some operations from Conduent. The state said the contract could be worth $698 million over 10 years.

Separately, California’s Medicaid officials are working on plans for a new system that would cost an estimated $500 million. Under the federal-state partnership on Medicaid, the federal government would cover 90 percent of those costs for design and implementation, and the state’s share would be about $50 million.

Pressure has been mounting on California to fix the situation. The Medicaid IT system “needs to be replaced, because it is more than 40 years old, its operations are inefficient, maintaining the system is difficult and there is a high risk of system failure,” state auditor Elaine Howle wrote in a June 26 letter to Gov. Jerry Brown and legislative leaders.

In her letter, Howle said the state was paying about $30 million annually to maintain the legacy system.

Overall, Medi-Cal serves 1 in 3 Californians. The annual Medicaid budget in California is about $104 billion, counting federal and state funds.

Beyond California, the GAO criticized the U.S. Centers for Medicare & Medicaid Services (CMS) more broadly. One complaint: Federal officials assign a similar number of staff to states for reviewing case files — even though some states, like California, pose a far bigger risk for enrollment errors and misspent money due to their size and complexity.

For instance, the report’s authors said, CMS reviewed claims for the same number of newly eligible Medicaid enrollees — 30 — in California as it did in Arkansas, even though California had 10 times the number of newly enrolled patients under the Affordable Care Act.

The report also said CMS devoted a similar number of staff to review both California, which represents 15 percent of federal Medicaid spending, and Arkansas, which accounts for 1 percent.

CMS “needs to step back and assess where are the biggest threats and vulnerabilities,” Yocom said. “If you aren’t looking, you don’t know what you aren’t catching.”

Overall, from fiscal years 2014 to 2018, federal Medicaid spending increased by about 31 percent, according to the GAO report. But the full-time staff at CMS dedicated to financial oversight declined by roughly 19 percent over the same period.

In a July 18 letter to the GAO, the U.S. Department of Health and Human Services agreed with the agency’s recommendations for improving oversight efforts.

HHS wrote that it “will complete a comprehensive national review to assess the risk of Medicaid expenditures reported by states and allocate resources based on risk.”

CMS Provides New Flexibility to Increase Prescription Drug Choices and Strengthen Negotiation for Medicare Enrollees

Image result for CMS Provides New Flexibility to Increase Prescription Drug Choices and Strengthen Negotiation for Medicare Enrollees imagesSource:

The Centers for Medicare & Medicaid Services (CMS) issued a memo today to Medicare Part D plans, which cover prescription drugs that beneficiaries pick up at a pharmacy, offering plans new tools and flexibility to expand choices and lower drug prices for patients.

Currently, if a Part D plan includes a particular drug on its formulary, the plan must cover that drug for every FDA-approved indication, or patient condition, even if the plan would otherwise instead cover a different drug for a particular indication. The requirement to cover drugs in this manner can discourage Part D plans from including more drugs on their formularies and limit their power to negotiate discounts.

Today’s memo explains that starting in 2020, plans will have new flexibility to tailor their formularies so that different drugs can be included for different indications.  This policy, known as “indication-based formulary design,” is used in the private sector and will enable Part D plans to negotiate lower prices for patients.  Targeted formulary coverage based on indication will also provide Part D beneficiaries with more drug choices and will empower beneficiaries to select a plan that is designed to meet their unique health needs.

“This action delivers on President Trump’s drug pricing blueprint by offering Medicare plans new tools to negotiate lower drug prices and offer patients better choices,” said HHS Secretary Alex Azar. “This is a significant step in modernizing the successful Medicare Part D program by giving plans the tools that serve patients well in the private sector.”

“President Trump and Secretary Azar are working to get the best deal for American patients,” said CMS Administrator Seema Verma. “By allowing Medicare’s prescription drug plans to cover the best drug for each patient condition, plans will have more negotiating power with drug companies, which will result in lower prices for Medicare beneficiaries.”

Today’s policy is expected to increase both the number of drugs available on a given plan’s formulary and the diversity of plan formularies available.  Part D plan sponsors and prescription drug manufacturers begin negotiations in the fall of 2018 for formulary placement in Contract Year 2020, so CMS is making this announcement today to ensure that beneficiaries will see the benefits of this policy in 2020.

The memo emphasizes that if a Part D plan limits formulary coverage of a drug to certain indications, the plan must ensure that there are other therapeutically similar drugs on formulary for the drug’s non-covered indications.

To help ensure that Medicare enrollees understand their coverage, the agency will update the online tools that beneficiaries use when selecting a Part D plan, so that beneficiaries will see that a plan’s coverage for a drug varies by indication before they make a choice in 2019 for their 2020 plan.

CMS will also require plans that implement this tool to explain what it will mean for beneficiaries in the plan’s Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) documents.  In addition, the agency will update the 2020 Medicare & You handbook to include information on this new flexibility.  CMS looks forward to working with patients and other stakeholders to ensure the successful implementation of this policy.

To view a fact sheet on today’s announcement, please visit:

To view a copy of the memo that was sent to Medicare Part D plan sponsors, please visit:

Last Updated 10/10/2018

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