The Health Policy War Room

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...

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...

Liquid biopsies are poised to disrupt cancer testing as we know it. These novel blood tests analyze circulating tumor DNA (ctDNA) and other molecules released by cancer cells, providing a non-invasive option for detection, diagnosis, and monitoring. The promise of liquid biopsies has generated tremendous excitement, along with over $1 billion in investments and acquisitions in recent years. But how close are we to realizing their full potential?  A recent review article sounds a note of caution amidst the hype. While liquid biopsies show ability to detect cancer, evidence that they improve patient outcomes is still lacking. Randomized trials with survival endpoints are needed to prove clinical utility. However, this provides the perfect opportunity for innovative diagnostics companies. Rather than dampening enthusiasm, these evidence gaps highlight major growth possibilities if companies can demonstrate real-world value.   We envision liquid biopsies transforming oncology...

Access to affordable health care is a persistent challenge for many Americans. However, a recent bill, the Protecting Health Care for All Patients Act (HR 485) , is making its way through the House of Representatives, which could hinder efforts to improve affordability of prescription drugs and other health care services. The bill seeks to block the use of quality-adjusted life-years (QALYs) and similar measures in government health care programs such as Medicare and Medicaid. QALYs are a widely accepted outcome measure used in health economic studies to assess the benefit of a therapy compared to standard care. They combine two critical health outcomes—length of life and health-related quality of life—into a single measure. QALYs are calculated by assigning weights to different health states, ranging from perfect health to death. By using QALYs, policymakers can estimate the average benefits of a treatment for a specific population. The debate over the use and impact of QALY is beyond...

In the ever-evolving landscape of healthcare, the rising costs of prescription drugs continue to be a major concern for patients, providers, and payers alike. Drug spending is a complex issue with many different dynamics at play. While the Medicare program has recently been given authorities to control drug spending, some have expressed concern that these efforts will only shift drug cost pressures to different parts of the healthcare system. The escalating cost of prescription drugs is a significant burden on both patients and payers. As the prices of pharmaceuticals continue to soar, it is crucial to understand the myriad factors behind this trend. Pharmaceutical companies cite research and development costs, regulatory requirements, and the need for profit as justifications for the high prices. The ballooning drug costs have prompted federal interventions aimed at curbing the financial strain on the healthcare system. CMS now has the authority to negotiate the price of some prescri...

The Medicare Physician Fee Schedule (MPFS) Conversion Factor has played a significant role in shaping the reimbursement rates for healthcare services provided by physicians under the Medicare program in the United States. The conversion factor is a crucial component of the MPFS, determining the dollar value assigned to the relative value units (RVUs) assigned to each medical service. This factor has undergone several changes over the years in response to evolving healthcare policies and financial considerations. The history of the conversion factor dates back to the implementation of the Resource-Based Relative Value Scale (RBRVS) in 1992. The RBRVS system aimed to standardize physician payments based on the complexity and resource utilization of services provided. Over time, the conversion factor has seen several adjustments such as the creation (and elimination) of the sustainable growth rate formula and the more recent shift to quality payment programs and accountable care. Under cu...

In an ongoing effort to address the healthcare needs of Americans, Senator Bernie Sanders has introduced the Medicare for All 2023 Bill. This proposed legislation aims to transform the United States healthcare system by providing comprehensive healthcare coverage to all residents, regardless of their age, income, or employment status. Versions of Medicare for All have been introduced in some version since at least 2019 and the concept of single payer health reform has been around for decades. This version of the single payer proposal has 15 sponsors including Mr. Sanders, Ms. Warren (no relation), Mr. Booker and others and reportedly has upwards of 112 co-sponsors. While this level of support does not guarantee that the bill survives, it does demonstrate that Congress is taking health reform seriously and is willing to float various ideas designed to reform and improve the healthcare system. Image created by AI via http://www.gencraft.com Let's delve into the key provisions and obj...

Recently, much has been written about the escalating costs of drug prices in the US. Increasing drug prices are present challenges to those who struggle with affordability and access to their medications. The Inflation Reduction Act brought changes to the way the Medicare program reimburses for prescription drugs. Last year, President Biden challenged the Center for Medicare and Medicaid Innovation (CMMI) to develop and test new payment models that can support value-based payments and promote high-quality healthcare. CMMI has recently proposed three models intended to improve affordability and access to drugs as well as measuring the feasibility of implementation.       1. The Medicare High-Value Drug List Model Under this model, Part D plans would be encouraged to offer a low, fixed co-payment across all cost-sharing phases of the Part D drug benefit for a standardized Medicare list of generic drugs that treat chronic conditions. Patients picking plans that particip...

Medicare is an important aspect of the healthcare system in the United States and plays a crucial role in providing medical coverage to millions of seniors. In recent years, Medicare spending and financing has been a topic of great concern and debate, with many questioning the sustainability of the program. In this article the Kaiser Family Foundation takes a look at some trends in Medicare spending and financing and what policy solutions might address these concerns. In 2020, Medicare spending accounted for 3.7% of the Gross Domestic Product (GDP), and this number is expected to grow in the future. KFF projects that Medicare spending will reach 5.8% of GDP by 2040. The main drivers of this spending growth are the increasing number of beneficiaries, rising healthcare costs, and the increasing costs of new medical technologies. This trend highlights the need for finding solutions to reduce the growth of healthcare costs and improve the efficiency of the healthcare delivery system. With...

On August 2, 2021, CMS placed on display at the Federal Register the final fiscal year 2022 Inpatient Prospective Payment System Final rule. Amongst the over 2,000 pages are CMS's final decisions on New Technology Add-on Payments (NTAP) for FY 2022. The NTAP program was designed to identify new technologies and to ensure that payment under the IPPS would be adequate so that early adopters of  new technologies would not be financially disadvantaged. Under the traditional NTAP pathway, a technology must be considered "new",  the charges of cases involving the technology must be more than 75 percent of the unadjusted rate for the MS-DRG to which the technology is assigned, and the technology must represent a substantial clinical improvement over existing technologies.  Beginning in 2021, CMS implemented an alternative NTAP pathway for technologies granted "break-through" approval by the FDA and for certain antimicrobial products. For this alternative pathway, techn...

  Since January 1, 2020, CMS has made separate payment for the treatment of opioid use disorder when furnished by qualified opioid treatment practitioners (OTP). This new Medicare benefit, established by the SUPPORT Act, allows CMS to make bundled payments for weekly episodes of care. Medicare will pay for episodes of care that include drugs, for non-drug episodes of care, for intake and periodic assessments, take-home dosages of methadone and buprenorphine, as well as for additional counseling. Pricing The episodic payment rate includes reimbursement for the drug- and non-drug-components of the encounter. Pricing for the drug component of the bundle is set using the most appropriate pricing mechanism currently in place and varies depending on the drug. Annual updates to the drug component of the bundle are made using the most recently available data from the applicable pricing mechanism. The non-drug portion of the bundle is updated based on the Medicare Economic Index. To reflect...

In the CY 2022 Physician Fee Schedule Proposed Rule, released yesterday (https://public-inspection.federalregister.gov/2021-14973.pdf) CMS is proposing two changes to its long-standing policies on drug pricing.  First, CMS is proposing to require manufacturers of drugs covered under Part B to report ASP data even if the manufacturer does not have a Medicaid rebate agreement. Noting that many manufacturers without a Medicaid rebate agreement currently report ASP data to CMS, CMS believes its proposed will cause little upset to manufacturers and would in fact preserve the status quo.  In a 2017 report (http://medpac.gov/docs/default-source/reports/jun17_ch2.pdf), MEDPAC presented findings many repackagers do not report ASP data to CMS and that this failure to report could be skewing Medicare payment rates. In this year’s proposal, CMS presents its own findings that exempting repackagers from reporting ASP data could increase errors in ASP calculations and delay CMS’s ability to ...

Legislators and policymakers alike have struggled with finding effective ways to reconcile the differences between drug prices in the United States and prices for those same drugs in foreign countries. Many factors including Government price controls, varied supply chains, and differences in the volume and mix of drugs prohibit the direct comparison of drug prices between countries. The concept of developing a price index to track differences in prices over time and across markets is not new. The Medicare program has used market basket updates – a form of price indexing, to keep growth in payments under its prospective payment systems from falling behind prices in the market.  However, the concept of a price index for drugs has not been widely recognized by policy makers. That was, until President Trump released his “American Patients First” (1) blueprint to lower drug costs . In the blueprint, President Trump urged the Department of Health and Human Services to take steps to “addr...

On May 13th, CMS released the latest in a series of rules intended to support the control of the spread of COVID-19 infections in long-term care (LTC) facilities and intermediate care facilities for individuals with intellectual disabilities (ICF-IID). The interim final rule with comment (IFC) went into effect on May 21st; however, CMS is accepting comments from interested stakeholders until July 12, 2021. With the implementation of these new rules, CMS is requiring LTC facilities and ICF-IID to develop and implement policies and procedures to ensure that they offer residents and staff vaccination against COVID–19 when vaccine supplies are available. CMS is defining “staff” as those individuals working in the facility in a full-time capacity as well as those individuals who provide weekly services on-site. CMS chose not to extend this requirement to individuals who infrequently enter facilities -- such as service technicians, plumbers and others who may enter the facility only a few ti...

In this week's Healthcare HotShots, I get in the wayback machine and revisit May 2018 to look at President Trump's American Patients First blueprint to see if I can figure out what a second Trump Administration might do to lower prescription drug costs.

After reading Dr. Adam Fein's blog about growth in the biosimilar market (here:https://www.drugchannels.net/2020/10/the-booming-biosimilar-market-of-2020.html) I decided to take my own look at Medicare payments for biologicals and their biosimilar competitors to see if there have been any recognizable changes. Read on to see what I found.... Biologicals are products that include blood, tissues, recombinant proteins and others that are developed using natural sources. Unlike small molecule drugs, which are chemically synthesized and have well known and understood chemical structures, biologics are exceptionally complex and can be complicated to manufacture. Because of their nature, biologics are highly susceptible to production variations -- making them difficult to replicate. This manufacturing sensitivity is what makes it virtually impossible for manufacturers to develop an exact replica, or a “generic” biologic. This is part of what led to the development of biosimilars. Biosimil...