The Supreme Court – Fun Facts Edition

I don’t normally get involved in things political but the Supreme Court’s recent decision to uphold the Affordable Care Act by a 7-to-2 margin got me thinking about the highest court and its history. After spending way too much time in the Number One First Street rabbit hole I discovered so much about the rich history of this esteemed institution. If you are interested in reading eight fun facts, follow along.

John Warren is the Owner and Principal Consultant at Gettysburg Healthcare Consulting in Hanover, Pennsylvania. He worked at CMS for 22 years and he directed divisions responsible for rate setting and payment policy development as well as program integrity and medical review. He has consulted with numerous clients in the Medicare space interested in navigating Medicare coverage, coding and reimbursement. Visit http://www.policypros.net for information about GHC and its services.

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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...

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...

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...

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