Health Policy Weekly 03 11 22

March 11, 2022

Health Policy Weekly

Like a dog with a bone:

Senate hearing on lowering the cost of prescription drugs

Mar 11, 2022

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Like a dog with a bone:

Senate hearing on lowering the cost of prescription drugs

On Monday, Senate Majority Leader Charles Schumer (D-NY) announced via a Dear Colleague letter that the Senate Finance Committee will hold a hearing next Wednesday on lowering the cost of prescription drugs in Medicare. In his letter, Leader Schumer stated the cost of prescription drugs is one of the most important issues to the American people.

Witnesses include:

Rena M. Conti, PhD, Associate Professor, Department of Markets, Public Policy, and Law, Questrom School of Business, Boston University
Douglas Holtz-Eakin, PhD, President, American Action Forum
Stephen Ezell, Vice President of Global Innovation Policy, Information Technology and Innovation Foundation
Steffany Stern, MPP, Vice President of Advocacy, National Multiple Sclerosis Society

While the Build Back Better bill stalled late last year, Democrats may focus on more targeted drug pricing reforms such as an out-of-pocket cap in Medicare Part D, capping monthly insulin prices for Medicare and commercial plans, or letting Medicare negotiate the price of certain drugs, a policy which Sen. Joe Manchin (D-WV) had supported in the past.

Before the mid-term elections, Democrats will likely bring forward packages that include drug price reforms, an extension of the higher Affordable Care Act subsidies for low-income individuals, and closure of the Medicaid gap, among other healthcare policies.

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Legislative update

States take the bull by the horns when fed government doesn’t: MI PBM push

In late February, Michigan Gov. Gretchen Whitmer (D) signed a series of pharmacy benefit management reforms into law. This reform program seeks to reduce the cost of prescription drugs and increase transparency and accountability among pharmacy benefit managers (PBMs), which can influence which drugs are available in pharmacies throughout the state.

Michigan House bills 4348, 4351, and 4352 were developed based on the recommendations set forth by Gov. Whitmer’s Prescription Drug Task Force. In collaboration with health policy experts, bipartisan members of the legislature, and stakeholders, the task force examined several options for reducing prescription medication costs for Michigan families.

Currently, 3 PBMs dominate the market in the US: CVS Caremark, Express Scripts, and OptumRx. Their role is to arrange lists of covered drugs, determine copays, negotiate rebates for some drugs to offset high list prices, and perform other behind-the-scenes work.

The legislation prohibits PBMs from forcing pharmacists to sign confidentiality agreements preventing them from informing consumers it is cheaper to purchase drugs out of pocket rather than through their insurance. Further, patients cannot be forced to pay a copay that is more expensive than the cost to dispense the medication. A mandated licensing process for PBMs is also included in the measure, as they are now required to submit annual transparency reports. PBMs are also prohibited from using spread pricing, a tactic typically opposed by smaller pharmacies that facilitates the recoupment of additional fees.

These bills are part of a package of legislation that also proposes caps on insulin and chemotherapy medications. These priorities align with Whitmer’s recent State of the State address, in which she said she would support efforts to get insulin prices down to $50 a month.

PBMs have been in the spotlight lately, and, despite the Federal Trade Commission not moving forward with an investigation into PBM practices, the focus will remain. As Michigan showed, states are still a source of scrutiny for that industry.

Accelerated approval in the doghouse

This week, Chairman of the House Energy and Commerce Committee Frank Pallone (D-NJ) introduced legislation to make it easier for the Food and Drug Administration (FDA) to remove accelerated approval drugs from the market. The legislation attempts to ensure a product granted accelerated approval continues to offer a clinical benefit.

The accelerated approval process allows for earlier approval of drugs that treat serious conditions, and that fill an unmet medical need based on a surrogate endpoint. Pharmaceutical manufacturers are required to confirm the clinical benefit of the drug; if they do not, the FDA may remove the drug from the market. However, according to Chairman Pallone, this process is “cumbersome, resource-intensive, and seldom used.”

Specifically, the proposed reforms would:

Permit the FDA to withdraw accelerated approval if a manufacturer fails to achieve agreed-upon enrollment targets, milestones, or timely study completion
Require manufacturers to conduct post-approval studies to verify clinical benefit of a drug that received accelerated approval
Require an agreement between manufacturers and the FDA on how the post-approval studies will be conducted before the FDA can grant accelerated approval
Allow the FDA to require studies to be underway at the time of accelerated approval
Automatically expire accelerated approval status 1 year after post-approval studies are scheduled to be complete, and in no case later than 5 years after approval, unless progress is verified by the Secretary of Health and Human Services
Require additional information on accelerated approval drugs’ labels
Add more frequent updates on post-approval studies
Penalize manufacturers for failure to submit reports or act with due diligence on post-approval studies

Finally, legislation to reform the accelerated approval process has a high chance of becoming law this year, as part of the next reauthorization of the Prescription Drug User Fee Act. That must-pass legislation expires September 30 and often includes several FDA reforms.

No time for a cat nap. Congress passes omnibus spending bill

On Thursday, Congress passed a $1.5 trillion federal omnibus spending bill ahead of Friday’s deadline, with the Senate clearing it late last night.

Some highlights:

$45 billion for biomedical and behavioral research at the National Institutes of Health, an increase of $2.25 billion
$8.5 billion to the Centers for Disease Control and Prevention, an increase of $582 million
$4 billion to the Centers for Medicare & Medicaid Services (CMS), an increase of $50 million
$3.3 billion to the FDA (in addition to user fee revenues), an increase of $102 million, with new investments to address the opioid crisis, improve medical supply chain surveillance, facilitate the development of treatments for rare cancers, and accelerate medical product development as authorized in the 21st Century Cures Act
$1 billion to establish the Advanced Research Projects Agency for Health to accelerate the pace of scientific breakthroughs for diseases such as amyotrophic lateral sclerosis (ALS), Alzheimer’s disease, diabetes, and cancer
Provisions to extend and expand telehealth flexibilities for 151 days after the end of the COVID-19 public health emergency

House Democrats pulled all COVID-19 relief that was going to be attached to the bill, as some lawmakers expressed concerns about spending offsets for the additional COVID-19 relief funding.

The bill goes to President Joe Biden for his signature before current funding for the government expires at 11:59pm ET tonight.

COVID-19 update

COVID-19 bulletin

Johns Hopkins University reported the global COVID-19 death toll has surpassed 6 million.
The above bullet notwithstanding, a Gallup poll found 63% of Americans think the COVID-19 situation is improving.

Value Corner

Raining cats and dogs. Which do you value more?

Last Thursday, the Institute for Clinical and Economic Review (ICER) announced plans to assess the comparative clinical effectiveness and value of semaglutide (WEGOVY), phentermine/topiramate (QSYMIA), liraglutide (SAXENDA), and naltrexone/bupropion (CONTRAVE) for the treatment of obesity. The Draft Scoping Document is now open to public comment, and stakeholders are invited to submit formal comments via email by March 23. After the public comment period, ICER will publish a Revised Scoping Document on March 31. The New England Comparative Effectiveness Public Advisory Council (New England CEPAC) will deliberate and vote on evidence presented in September 2022.

Also on Thursday, ICER announced it has received new grant funding from the California Health Care Foundation to support the development of: 1) 2 annual unsupported price increase reports for California; and 2) a policymaker guide outlining how to use comparative effectiveness research to ensure that patients have fair access to fairly priced drugs. The guide would aid California policymakers in leveraging comparative effectiveness reports for price negotiations, developing formularies, and creating coverage criteria. This grant will also support ICER assessments that are evaluated by the California Technology Assessment Forum as well as the development of additional guides for policymakers and other decision makers to utilize independent value assessments to achieve patient access and affordability.

Last Tuesday, the Innovation and Value Initiative (IVI) and Health Affairs released an article exploring the future of value assessment in a post-pandemic US. The article titled, “Health Care Value Through the Lens of Patients’ Well-Being,” and written by IVI’s Executive Director Jennifer Bright and the National Patient Advocate Foundation’s CEO Alan Balch, discusses 3 key conditions that must be established to successfully implement value-based healthcare. The authors first note that value-based decision making should stem from the needs, experiences, and perspectives of patients to connect all other stakeholders affected by the healthcare system. In order to align on a mutual understanding of value, methodologies, and outcomes, evidence must be well defined and reflect the impact on patients’ welfare and well-being. Lastly, a value-based healthcare system must be motivated by financial reward to deliver optimal outcomes to diverse patients, and stakeholders ranging from patients and customers to funders and academic journals can hold organizations and health systems accountable to be “patient responsible.”

In late February, the National Council on Disability published a Health Equity Framework based on input and feedback from medical professionals, policymakers, and other stakeholder experts over the last year. This framework serves as a roadmap for policymakers to address the physical and systemic barriers to accessing healthcare for people with disabilities. The 4 core areas to achieve health equity include designating people with disabilities as a special medically underserved population (SMUP), requiring comprehensive disability curricula and training of healthcare professionals, requiring the use of accessible medical and diagnostic equipment, and improving data collection concerning healthcare for people with disabilities across the lifespan.

If you need assistance with all things ICER or value-related, please contact Erika Wissinger.

Regulatory Update

Straight from the horse’s mouth.
2022 coding updates for prescription digital therapeutics

The new year introduces 3 new codes for prescription digital therapeutics (PDTs) in cognitive behavioral therapy. Two Current Procedural Terminology (CPT) codes became active starting January 1, 2022, for healthcare provider (HCP)-prescribed outpatient digital behavioral therapy services using an online cognitive behavioral program when remote therapeutic monitoring and management services are required and costs are incurred by the HCP. CMS recently announced that 1 Health Care Procedure Code System (HCPCS) code will become active starting April 1 for an FDA-approved PDT that provides online cognitive behavioral therapy without HCP services.

Code type	Code and description	Appropriate use requirements
CPT CPT category III codes are used for emerging technologies Codes effective dates of services on/after January 1, 2022	0702T Remote therapeutic monitoring of a standardized online digital cognitive behavioral therapy program ordered by a physician or other qualified HCP; supply and technical support, per 30 days	FDA-cleared device prescribed by a HCP HCP has: incurred a cost, and taken ownership/title, and billed for the PDT device HCP provides remote therapeutic monitoring services
	0703T Remote therapeutic monitoring of a standardized online digital cognitive behavioral therapy program ordered by a physician or other qualified HCP; management services by physician or other qualified HCP, per calendar month
HCPCS Codes effective dates of services on/after April 1, 2022	A9291 Prescription digital behavioral therapy, FDA cleared, per course of treatment	FDA-cleared device prescribed by a HCP HCP has not: incurred a cost, nor taken ownership/title, nor dispensed the PDT device Specialty pharmacy dispenses the PDT device to the patient and directly bills the non-Medicare payer

FDA-approved PDTs are a rapidly emerging therapeutic class that leverage regulated and clinically validated prescription software to treat human disease. HCPCS A9291 was created in response to a HCPCS application for Pear Therapeutics’ reSET used to provide outpatient prescription digital cognitive behavioral therapy for substance use disorder (SUD) as an adjunct to contingency management for adults who are currently enrolled in outpatient treatment under the supervision of a clinician.

For now, establishing HCPCS A9291 may facilitate access to PDTs for cognitive behavior therapy in SUD in the home setting for non-Medicare payers that already cover these services. In the future, it may prove an important step toward establishing a standard for the coverage and payment of PDTs for other human diseases as well.

Contact Milda Kaitz for questions about coding strategies for PDTs and other emerging technologies.

Information buffet (AKA, other stuff that caught our attention)

CMS issued a calendar year 2023 Request for Applications for Part D Sponsors for the Part D Senior Savings Model.
CMS sent a final rule for Medicare Secondary Payer and Certain Civil Money Penalties to the Office of Management and Budget (OMB) for review.
CMS also sent proposed rules to OMB:
CMS updated its Open Payments data.
The Center for Medicare and Medicaid Innovation (CMMI) began accepting applications for the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) model.
The Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission released the transcripts of their March 2022 meetings.
MedPAC released interesting findings from its annual focus group of Medicare beneficiaries and clinicians:
- Few beneficiaries reported having conversations with their clinician about the cost of prescription drugs
- Most beneficiaries knew what their prescriptions would cost before going to the pharmacy and reported that their drugs were affordable
- A minority of beneficiaries reported facing high out-of-pocket drug costs and how those high costs affected them
- Clinicians and beneficiaries reported knowledge and use of GoodRx
- Access to cost information and formularies at the point of sale is limited for clinicians
The Government Accountability Office released a report on “Information on Geographic Adjustments to Physician Payments for Physicians’ Time, Skills, and Effort.”
Health Affairs published an article outlining CMMI’s initiative to advance health equity.
Kaiser Health News reported how more employers are moving retirees to Advantage plans to shift costs to Medicare.

Heard on the street

“We find that 23 million people (nearly 1 in 10 adults) owe significant medical debt. The SIPP survey suggests people in the United States owe at least $195 billion in medical debt. Approximately 16 million people (6% of adults) in the US owe over $1,000 in medical debt, and 3 million people (1% of adults) owe medical debt of more than $10,000. Medical debt occurs across demographic groups. But, people with disabilities, those in worse health, and poor or near-poor adults are more likely to owe significant medical debt. We also find that Black Americans and people living in the South or in Medicaid non-expansion states were more likely to have significant medical debt.”

– “The burden of medical debt in the United States,” Peterson-KFF Health System Tracker, March 10