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A 25-year-old federal drug discount program has grown so big and controversial that it faces a fight for survival as federal officials and lawmakers furiously debate the program’s reach...The program, known as 340B, requires pharmaceutical companies to give steep discounts to hospitals and clinics that serve high volumes of low-income patients...The Centers for Medicare & Medicaid Services...cut Medicare payments for hospitals enrolled in the program by 28 percent...About 40 percent of the hospitals in the U.S. now buy drugs through the program...the hospital lobbying group 340B Health, said that for some small, rural hospitals the funding cut “could actually be the difference between staying open and closing.”...those supporting the cut, including drugmakers, argue that the program has grown beyond its original intent because hospitals have pocketed the discounts to pad profits — not to help indigent patients...Stephen Ubl, president of drug industry group PhRMA, said the program “needs fundamental reform” and that the latest rule change is merely a good first step. His group, which has deep pockets and an advertising campaign geared at pinpointing the program’s flaws, has a list of changes that Congress and the Trump administration could tackle. Those include limiting which hospitals should be eligible for 340B price breaks and making sure needy patients benefit when hospitals buy discounted drugs.

Laura Joszt, assistant managing editor at The American Journal of Managed Care. Welcome to This Week in Managed Care from the Managed Markets News Network

The market is buzzing with speculation that Amazon.com Inc. will enter the pharmacy business. Some drugmakers are just fine with changes the tech retail giant might bring to the complex market...Drug companies say getting medicine into patients’ hands is too complicated and costly. Some have pointed to the multiple layers of middlemen -- including insurers, pharmacy benefit managers, distributors and pharmacies -- as one reason for distorted prices and high costs in the U.S...Amazon’s entry could bring more efficiency, Takeda Pharmaceutical Co. Chief Executive Officer Christophe Weber said during an interview in London. That could impact business in the U.S. or in other markets...“I am all in favor of a more effective distribution system,” Weber said, adding that in some countries the markup can be higher than the manufacturer’s own price. “For us it doesn’t matter so much where the point of sale is, as long as we reach the patient.”

The FDA has been helping dozens of U.S. drugmakers in Puerto Rico get power and supplies to their plants in the wake of the infrastructure disaster left by hurricanes Irma and Maria. But with a shortage of saline getting worse in the U.S., the FDA is moving three Baxter plants on the island to the front of the line...FDA Commissioner Scott Gottlieb today said that state and federal authorities have been responsive to its request that a “subset of critical production facilities,” including those plants that manufacture IV saline bags, get priority in getting fuel for their generators and hooked back to the grid ahead of others...“Unfortunately, most manufacturers are still relying on generator power, and even those that have returned to the electrical grid continue to face interruptions as the grid is rebuilt," Gottlieb said. "We’re hopeful that these companies manufacturing medically important products will see their power needs addressed on an accelerated basis.”...A shortage of some presentations of the medically essential saline solution has fettered hospital care since at least 2014. But the issue immediately got worse when hurricanes knocked down power lines and tore up roads in Puerto Rico, interrupting production and distribution from more than 40 U.S. plants on the island, including Baxter’s three producing saline...

New proposed rule offers insurers more plan flexibility and eases regulations...The proposed rule released last week by the Centers for Medicare and Medicaid Services would strengthen and improve the Medicare Advantage and Part D programs...CMS's proposed 2019 Medicare Advantage and Part D rule offers insurers greater flexibility in reporting and makes changes to how star ratings are calculated...Star ratings determine bonuses for insurers. Another plus for plans that have an overall 5-star rating is the ability to offer a year-round open enrollment period for Medicare Advantage...The rule has an open enrollment period for MA plans of Jan. 1 through March 31, 2019. It allows enrolled individuals to make a one-time election to go to another plan or to original Medicare...The proposed rule would get rid of artificial limits on the variety of plans an insurer can offer in a certain region, ease the medical loss ratio, allow for more tailored benefits and would revise regulations for maximum out-of-pocket limits, among other changes.

Nicole Crisano, PTNN. This weekly video program provides our readers with an in-depth review of the latest news, product approvals, FDA rulings and more.

The US Food and Drug Administration this week began adding four-letter meaningless suffixes at the end of newly approved biologics' nonproprietary names, signaling a shift in policy from only adding the suffixes to biosimilars' nonproprietary names since 2015...The first additions of the meaningless suffixes came for...approval of Roche's Hemlibra (emicizumab-kxwh), one of the first new medicines in nearly two decades to treat people with hemophilia A, and...approval of Ultragenyx Pharmaceutical's Mepsevii (vestronidase alfa-vjbk) to treat pediatric and adult patients with a rare inherited condition called mucopolysaccharidosis type VII (MPS VII), also known as Sly syndrome...The newly added suffixes were not preceded by an announcement from FDA, though the shift was not entirely unexpected...Back in January, FDA finalized guidance on how biosimilars and their biologic reference products' names should include this four-letter, FDA-designated meaningless suffix attached at the end of the nonproprietary name...But until this week, only new biosimilars had the suffixes attached to their names. The agency did not respond to a request for comment on why new biologics' nonproprietary names included the suffixes this week.

It turns out that the quarter-crushing $575 million that drug wholesaler AmerisourceBergen set aside to settle civil litigation with the Justice Department was not enough. It is going to take another $50 million...That comes on top of the $260 million the drug distributor has already paid to resolve a criminal misdemeanor charge tied to its sales of injected cancer meds produced in a plant that was not FDA certified...the company has now agreed to pay $885 million to resolve both civil and criminal allegations which are tied to issues that reach back more than 15 years...The company...in a filing reported it increased its Q4 set aside to $625 million to cover the agreement, which is awaiting court approval...The civil case stemmed from alleged violations of the federal False Claims Act. The DOJ has alleged that between 2001 and 2014 two of the wholesaler’s...subsidiaries—Oncology Supply Co. and the now-defunct Medical Initiatives—prepared millions of syringes of cancer medicines, including Aloxi and Anzemet and generics of Neupogen and Procrit, in an unapproved facility...the complaint did not indicate any patients were harmed by the drugs and that FDA testing of syringes that were seized in the case had not found any “quality concerns.”

CVS is reportedly in talks to buy Aetna in a deal that could help protect its business from the entry of the tech giant in to the healthcare space...CVS should focus on its vertical integration strategy, according to Morgan Stanley, and steer clear of gong head to head with Amazon in next day or same day delivery...Don't go head-to-head with Amazon...Goldwasser said that CVS' strength is its vertical integration. CVS has made a number of acquisitions over the past decade, such as Caremark RX, a pharmacy benefits manager, Omnicare, a leading pharmacy services provider and Target's pharmacy and retail clinic businesses. That push puts the company on a better footing to engage consumers, improve access to care, and deliver cost savings, he said.Goldwasser said however that any plans to go head-to-head with Amazon in next-day or same-day delivery service of prescriptions may impact the company's front-store sales. CVS already offers this service and plans to expand it to all of its locations in 2018.

After a successful pilot program with Kroger’s pharmacies, Ohio’s prescription drug monitoring program is the first in the United States to offer advanced analytics for pharmacists and health care providers...The State of Ohio Board of Pharmacy is working with Appriss Health, provider of a comprehensive platform for substance use disorder, to enhance the state’s PDMP, known as Ohio Automated Rx Reporting System...The PDMP now provides NarxCare, an advanced analytics and patient support solution, to Ohio prescribers and pharmacists, in clinical workflow and via OARRS, to assist in clinical decision-making and promote patient safety. The analytics are available for free to Ohio healthcare providers and pharmacists accessing OARRS via electronic health records and pharmacy management systems...NarxCare...aggregates and analyzes prescription information from providers and pharmacies...then presents visual, interactive information — as well as advanced analytic insights, complex risk scores...The system also provides tools and resources that support patients’ needs and connects them to treatment, if necessary.