Welcome to the Health Policy WARroom

Welcome the the Health Policy WARroom, the official blog of Gettysburg Healthcare Consultants. GHC, located in Hanover, Pennsylvania works with health industry clients to obtain appropriate coverage, coding and reimbursement from the federal Medicare program.

John Warren is the owner and principal consultant at GHC. He has been in the health insurance industry for nearly 30 years. He spent 22 years at the Centers for Medicare & Medicaid Services and directed the Divisions that developed payment policy and rate setting for the Medicare physician fee schedule, clinical laboratory fee schedule, ambulance fee schedule and the Part B Average Sales Price programs. He has consulted with a wide range of clients in the healthcare sector including pharmaceutical companies, laboratory test developers, medical equipment suppliers, and physician specialty societies. John uses his comprehensive understanding of the Medicare program to navigate the complex and ever changing ecosystem.

Photo by National Cancer Institute on Unsplash

The healthcare industry is constantly changing, and nowhere is that more evident than in the Medicare program. By staying on top of changes to Medicare legislation (like the Affordable Care Act or the Protecting Access to Medicare Act and even the CARES and Families First Acts), regulations (including the annual updates to the Physician Fee Schedule, Outpatient Prospective Payment System and Inpatient Prospective System), to CMS Administrator Rulings, Medicare Transmittals, and National Coverage Decisions, stakeholders can develop effective strategies and plans for developing and commercializing new and innovative technologies.

Having a solid understanding of Medicare Administrative Contractors, their local policy processes and reimbursement requirements can also help stakeholders to position themselves and their products for the most favorable outcomes possible.

In this blog, we will explore some of these changes and highlight some of the benefits and the challenges of this continually evolving landscape

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The Problem of Limited-Supply Agreements for Medicare Price Negotiation

A recent JAMA Viewpoint article discusses how limited-supply agreements between brand name and generic drug makers could impact Medicare price negotiation under the Inflation Reduction Act (IRA). These agreements allow brand manufacturers to maintain some market exclusivity by limiting the supply of generic competitors. The article suggests these deals may increase as the Centers for Medicare and Medicaid Services (CMS) implements the IRA's price negotiation provisions. From a business perspective, it's understandable why brand manufacturers might find limited-supply agreements preferable to having their drugs subject to Medicare negotiation. Maintaining even partial exclusivity is likely better for revenue than triggering government-dictated price reductions. However, policymakers and patients are increasingly concerned that these deals keep prices high despite generic availability. The use of limited supply agreements could also produce unintended consequences. Balancing som...

Selecting Therapeutic Alternatives: A Critical Perspective for Drug Manufacturers

The Inflation Reduction Act (IRA) of 2022 instructed the Centers for Medicare and Medicaid Services (CMS) to initiate drug price negotiations with manufacturers for the first time. A key component of these negotiations involves considering factors like the drug's benefits and costs to establish a "lowest maximum fair price." (MFP) For drug manufacturers, CMS’s process for making comparisons of therapeutic alternative(s) to determine the MFP raises a number of crucial questions. The IRA's guidance suggests that CMS will initially compare drugs within the same class as the negotiated drug to determine a starting point for pricing. For drug manufacturers, this approach raises concerns regarding price competition within drug classes. As new drugs are often priced in line with preexisting brand-name drugs in the same class, the negotiation process may result in downward pressure on prices for all drugs in the class. This could significantly affect the revenue and profitabi...

FDA Green Light Inches Genetic Screening Forward

The FDA recently granted authorization for the first multi-gene test for assessing hereditary cancer risk, marking a significant advancement in genetic screening capabilities. Developed by Invitae Corporation, the Invitae Common Hereditary Cancers Panel analyzes variants in 47 genes associated with increased cancer risk. Using next-generation sequencing on DNA from blood samples, the test looks at BRCA1 and BRCA2 variants linked to breast and ovarian cancer, as well as other cancer-related genes. (image source: Adobe Stock Images) The FDA’s approval provides a regulatory framework giving labs a clearer roadmap for developing similar multi-gene panels. With an authorized model in place, labs can proceed more confidently in navigating FDA submissions. Specifically, the de novo classification created for Invitae’s test allows future lab-developed panels to gain regulatory clearance through the expedited 510(k) pathway by demonstrating substantial equivalence. This streamlined validat...

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