Health Policy Report (9/3)

Johnson & Johnson Ordered to Pay for Role in Opioid Epidemic

Cleveland County District Judge Thad Balkman released a decision last Monday declaring Johnson & Johnson and its subsidiary Janssen Pharmaceuticals played a punishable role in the opioid crisis. He ordered Johnson & Johnson pay more than $572 million based on public nuisance claims to account for “misleading” opioid marketing and promotion practices. His decision determined that these practices compromised the health and safety of thousands of Oklahoma residents and contributed to increased rates of additional and overdose deaths. Johnson & Johnson has already promised to appeal the “highly flawed” judgment.

The Johnson & Johnson case was one of the first opioid lawsuits to go to trial and could set a precedent for what may happen with the national multidistrict trial slated for October in Ohio. The plaintiffs in that case will pursue a similar strategy, arguing that drug companies created a public nuisance by misrepresenting the risks associated with the long-term use of opioids. Myriad lawsuits have been filed in states across the country — including in California, Maryland, and New York — and other opioid manufacturers have settled with Oklahoma to avoid highly publicized court battles. Purdue Pharma settled with the state for $270 million and withdrew its right to promote and market analgesic opioids in Oklahoma, and may reportedly offer to pay between $10 billion to $12 billion to settle national lawsuits.

Florida Submits “Concept Paper” Detailing Drug Importation Plan to HHS

The Florida state Agency for Healthcare Administration recently submitted a “concept paper” to the U.S. Department of Health and Human Services (HHS) detailing the state’s proposal to implement a state drug importation system. Florida’s plan broadly describes how state health officials would safely import cheaper pharmaceuticals from Canada and potentially save the state more than $150 million a year. Florida would hire a vendor to oversee the program and determine eligible drugs and suppliers, and utilize existing Food and Drug Administration (FDA) regulations governing pharmaceutical re-packagers and re-labelers to ensure drugs imported are safe and effective. In a press release, Florida Governor Ron DeSantis said “Two months after signing Florida’s Prescription Drug Importation Program into law, I am pleased to announce that our state is one step closer to realizing true cost savings on safe, high quality prescription drugs from Canada.”

Florida’s plan would utilize existing FDA regulations to ensure only safe and effective drugs are imported from Canada and would target only the pharmaceuticals with the greatest potential savings for the state. The state intends to contract with an outside vendor that will manage and oversee all aspects of the program and ensure Canadian suppliers and eligible importers comply with all legal requirements. Eligible importers will be limited to wholesalers and pharmacists serving state health programs, according to the concept paper. The $150 million annual savings estimate does not include drugs obtained through government programs that already offer deep discounts like Medicaid supplemental rebate programs. The importation plan also excludes various classes of drugs that are inhaled or injected rather than consumed, as well as controlled substances or biological products, such as insulin.

Florida’s concept paper could serve as a model to inform HHS as they develop rules in line with President Trump’s recent directives on the importation of prescription drugs. The state’s submission ramps up pressure on HHS Secretary Azar to fulfill President Trump’s priority and provide a response to the states’ formal submission. Even if Florida’s plan is granted the federal go-ahead, however, the importation program will still need to return to the state legislature before being implemented. Under the law signed by Governor DeSantis earlier this year, the state legislature will need to approve funding for the importation program — as well as another pathway described in state legislation—next year.

OIG Finds CMS Paying Twice for Same Hospice Drugs

Last Tuesday, the Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) reported that Medicare Part D has duplicated payment for pharmaceuticals covered under the Part A hospice benefit. The mistake has resulted in an additional $161 million in CMS payments to hospices. Specifically, Medicare, Part D paid $422.7 million for 6.7 million prescriptions for beneficiaries who received hospice care, although hospice organizations should have provided and paid for the drugs. The drugs were essentially paid for twice through payments to hospice organizations and again through Part D, and hospices or beneficiaries should have paid for the remaining $262 million in Part D total cost.

The OIG previously noticed duplicate payments between Part A and Part D in 2009 and warned of the issue in a 2012 report. The report acknowledges the previous warning, and notes that the OIG “disagrees CMS will adequately address the issue because the duplicate payments persist.” The OIG stated that “CMS has not developed or required controls to ensure that Part D is not paying for hospice-covered drugs,” and explained they will continue to recommend that CMS develop a strategy to stop the duplicate hospice drug payments that includes working with Part D sponsors and seeking whatever authorities are necessary to develop proper controls. CMS Administrator Seema Verna wrote to OIG Inspector General Dan Levinson in response and said that she “agrees with the importance to avoid duplicate payments” and will maintain current efforts to address the problem.

CMS Sets Stakeholder Meeting Date to Discuss Opioid Action Plan

Last Wednesday, the Centers for Medicare & Medicaid Services (CMS) announced that it will hold a public meeting on September 20 to discuss the development of a CMS Action Plan to Prevent Opioid Addiction and Enhance Access to Medication-Assisted Treatment. During this public meeting, stakeholders will have an opportunity for public input. In addition, experts from the federal government, advocacy communities, the research, treatment, clinical, and medical industry are scheduled to brief attendees on key information, including the U.S. Department of Health and Human Services (HHS) and CMS activities to address the opioid epidemic, pain management and substance use disorders. The SUPPORT Act (2018’s Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act) listed a series of reviews and areas for recommendations that HHS must address in the Action Plan, including:

  • A review of payment and coverage policies under the Medicare and Medicaid programs program, including a review of coverage and payment of all medications related to the treatment of opioid use disorder and other therapies that manage chronic and acute pain and treat and minimize risk of opioid misuse and abuse;
  • Payment and service delivery models CMS’ Innovation Center could test;
  • Data collection that could facilitate research and policy-making regarding prevention of opioid use disorder and data that would inform CMS’ coverage and payment decisions;
  • A review of Medicare and Medicaid beneficiaries’ access to therapies that manage chronic and acute pain and treat and minimize risk of opioid misuse and abuse; and

A review of payment and coverage policies under the Medicare program and the Medicaid program related to medical devices that are non-opioid based treatments approved for the management of acute pain and chronic pain, for monitoring substance use withdrawal and preventing overdoses of controlled substances, and for treating substance use disorder, including barriers to patient access.