Health Policy Report

The Week in Review

Washington enjoyed a relatively quiet week as Congress was away on the second half of a two-week recess. Two more Members of Congress, one Republican and one Democrat, used the recess to announce plans to step down due to scandal. Rep. Blake Farenthold (R-TX) resigned immediately in the wake of the revelation that he used taxpayer funds to settle a sexual harassment suit and Rep. Elizabeth Esty (D-CT) said that she would not seek re-election after reports surfaced that she had failed to fire a senior staff member who had been accused of making violent threats to her staff.

The Week Ahead

Congress returns this week after a two-week recess for the Easter and Passover holidays with a rare respite from urgent deadlines. The Senate is expected to begin a busy period of confirmations for presidential nominees when they reconvene today, starting with consideration of Claria Boom to become a U.S. District Judge in Kentucky.

The House, which is set to return on Tuesday, will start with a handful of suspension bills before moving to consideration of a trio of financial services bills. The three measures (H.R. 4293, H.R. 4061, H.R. 4790) would ease regulations under the regime created by the Dodd-Frank financial reform law, and are seen as part of the ongoing negotiation between House and Senate leaders on the bipartisan regulatory relief bill passed in the upper chamber earlier this year.

Lawmakers also plan to take up a resolution (H. J. Res 2) backing a constitutional “balanced budget” amendment that would require Congress to balance expenditures with revenues in the annual budgetary process. The resolution would likely only be a messaging exercise as constitutional amendments require supermajorities in both chambers and ratification by three-fourths of state legislatures.

Senate HELP Committee and House E&C Panel to Hold Hearings on Opioid Bills

Last Wednesday, both chambers of Congress moved forward with efforts to combat the opioid crisis. The Senate Health, Education, Labor, & Pensions (HELP) Committee announced it will hold a hearing April 11 to discuss a bipartisan draft bill (summary), the Opioid Crisis Response Act of 2018. Also Wednesday, the House Energy & Commerce Health Subcommittee announced it will hold a hearing April 11, focused on opioid-related coverage and payment issues in the Medicare and Medicaid programs. During the Subcommittee’s third and final hearing in this series, members plan to examine more than two dozen bills.

The HELP Committee’s bipartisan draft bill, the Opioid Crisis Response Act of 2018, is a result of six bipartisan hearings on the subject with the FDA, NIH, CDC, SAMHSA, governors, health experts, and impacted families. The legislation, introduced by Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), grants new authority to several agencies within the Department of Health and Human Services (HHS), the Drug Enforcement Agency (DEA) and other entities to address the crisis, and authorizes funding for programs intended to support children, families, and communities dealing with the ripple effects of opioid abuse.

Among the key topics included in the Senate HELP bill are:

• FDA — The bill would give the FDA authority to require manufacturers to package certain drugs for set durations of treatment, such as in three-day blister packs. Through the bill, the FDA would receive additional funding to improve coordination with the U.S. Customs and Border Control, and would allow the FDA to clarify its development and regulatory pathways to spur development of non-addictive and non-opioid pain products through feedback from public meetings.
• CDC and PDMPs — The bill authorizes the Centers for Disease Control and Prevention (CDC) to undertake prevention activities related to prescription drug monitoring programs (PDMPs), including enhancing interoperability between the program and health information technology; and facilitating data exchange among state PDMPs.
• Privacy Issues — The bill directs HHS to establish model programs and materials for training health care providers on the privacy and security regulations governing patient records, as well as “Jessie’s Law,” which would direct HHS to develop best practices for how, at a patient’s request, said patient’s history of opioid use disorder can be “prominently displayed in the medical records.”

At Opioid Summit, FDA Commissioner Reiterates Calls for Uniform PDMP

FDA Commissioner Scott Gottlieb delivered remarks to the National Rx Drug Abuse and Heroin Summit last week in which he led off by discussing FDA’s analysis of prescribing patterns. These comments served to ground his recommendations on the need to craft policies and develop training to better rationalize prescribing. He noted that today there is a lack of evidence-based guidelines to inform clinical practice for opioid use, and that this is hampering prescribers from providing personalized pain management and addiction treatment at the point of care. Further, Commissioner Gottlieb expressed support for Congress’ efforts to pass legislation that would create a uniform system of electronic prescriptions for controlled substances and integration of Electronic Health Records (EHR) and Prescription Drug Monitoring Program (PDMP), as well as data sharing across PDMPs.

Commissioner Gottlieb’s stated support for a uniform system of electronic prescriptions for controlled substances and integration of EHRs and PDMP is well-timed with ongoing congressional discussions around the next legislative package addressing the opioid epidemic. Last month, Gottlieb testified before the House Energy and Commerce Subcommittee on Health, and last week’s speech reinforced some of the Administration’s policy priorities. He also sought to turn up the public pressure on potential partners that have been slower to engage with the FDA on key issues.

Specifically, Gottlieb discussed FDA’s plan to expand its analysis of prescribing patterns to the Medicare and pediatric populations, with the goal of making it publicly available for policymakers creating and revise opioid-related policies. He highlighted four main areas for improvement to address the opioid epidemic: supporting education and training, developing evidenced based guidelines, enhancing enforcement, and advancing electronic prescribing systems and policies.

Gottlieb highlighted that FDA’s REMS is optional for prescribers and suggested that it was time to consider making it mandatory. He expressed a desire to collaborate with professional societies to develop evidence-based guidelines on the appropriate dose and duration for some common procedures, and suggested FDA would explore whether this data could be included in drug labeling. Gottlieb offered support for improving prescribing platforms that make it easier for doctors to adopt evidence-based guidelines, particularly a robust e-prescribing system and e-prescribing for controlled substances which could embed evidence-based prescribing guidelines.  Gottlieb closed out his speech by calling on social media companies, internet service providers and others to collaborate with the FDA to root out illegal efforts to distribute opioids. According to Gottlieb, FDA will host a summit meeting with CEOs and other senior representatives of the internet stakeholders, academics, and advocacy groups to identify technology gaps and new solutions.

In MA and Part D Call Letter, CMS Tightens Opioid Policies, Signals Concerns on Drug Costs

The Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2019 Rate Announcement and Call Letter finalizing policy and payment changes for Medicare Advantage (MA) plans as well as under Part D last week. CMS gave Medicare Advantage plans a 3.4 percent pay raise for 2019, well above the 1.84 percent bump the agency had initially proposed and higher than last year’s increase. While the Administration previously sought comment on, and officials have been praising the voluntary efforts of, health plans to pass on prescription drug rebates and discounts to patients, CMS did not include a new requirement for Medicare Part D plans to do so at this time. CMS did, however, finalize a number of other Part D policies they believe will lead to lower drug costs for patients and for the federal government.

Additionally, the Administration finalized new opioid prescribing limits and monitoring efforts under Part D, as well as changes to MA utilization of encounter data, expanding MA supplemental benefits, and reducing payments to Employer Group Waiver Plans. Medicare beneficiaries who are deemed at risk for opioid misuse or abuse with be prevented from obtaining prescription drugs from multiple doctors or pharmacies, and will be “locked-in” to one pharmacy or prescriber for Part D benefits.

CMS’s announcement highlighted a variety of measures that support the Administration’s broader opioid initiative. CMS Administrator Seema Verma also focused on Medicare policy changes that are designed to increase available health plan choices for consumers as well as to empower patients to make informed choices for the services and products they utilize. Notably, CMS flagged concerns with recent changes the Bipartisan Budget Act of 2018 made to the Part D Coverage Gap Program, saying the agency will continue to take steps to support competition in the Part D plan market.

The Administration has openly discussed that it is considering additional steps around drug pricing. CMS will likely have a significant role in forthcoming policy initiatives and the agency alluded to this ongoing work in the Call Letter. CMS, working closely with Department officials, is proceeding to thoroughly vet proposals that may be controversial and have a varying impact for industry partners. The proposals included in the Call Letter and Payment Notice may serve as a starting point for the Administration, with additional proposals potentially advancing out of CMS’ Innovation Center, among other agencies.

China Tariffs Could Pose Threat to Generic Competition

Last week, the Trump administration proposed 25 percent tariffs on thousands of Chinese-made products, including vaccines, insulin products, MRI machines, surgical tools, and other devices. Many are concerned that the inclusion of a host of raw ingredients used to create pharmaceuticals will raise the prices of American-made drugs and limit generic competition. The Office of the U.S. Trade Representative cautioned that the list is incomplete and not intended to “delimit, in any way, the scope of the proposed action.”

Although brand name drugs are generally more expensive, generics bear much more of the brunt of the physical act of making the pill. Advocates for generics have argued that although the administration is eager to show progress on reducing the costs of pharmaceuticals, increased manufacturing costs will severely handicap generic competition. China is the biggest supplier of active pharmaceutical ingredients in the world, and experts have cautioned that penalties placed on ingredients will completely negate administration and congressional efforts to lower drug prices. Impact could prove to be smaller than anticipated, as many generic medicines used by U.S. consumers are made by generic companies based in India. The potential impact has not yet been completely worked out due to the total extent of the tariffs on the global ecosystem. Additionally, no date has been set for the tariffs to go into effect, and the U.S. and China may work out a deal before they are ever imposed.

Surgeon General Issues National Advisory Urging Public to Carry OD-Reversal Drug Naloxone

The U.S. Surgeon General issued a national public health advisory last Thursday, calling for Americans to carry the overdose-reversal drug naloxone. Dr. Jerome Adams compared the drug to other lifesaving interventions such as knowing how to perform CPR or use an EpiPen, and stressed that friends and family of those potentially at risk of opioid abuse keep the pharmaceutical on-hand and educate themselves on how to use it. A public health national advisory has not been issued by the U.S. Surgeon General since 2005, and marked the urgency of a crisis that has seen overdose deaths double from 21,089 in 2010 to 42,249 in 2016. The Surgeon General noted that wider availability to the life-saving drug would be critical to reducing overdose deaths, as paramedics and police officers who carry naloxone often arrive too late to administer the drug with any effect.

States and local governments have increasingly shown efforts to boost access to the drug, including issuing standing orders for the drug to entire communities and offering legal protection to all who administer the drug. Many have criticized the high price of naloxone as it has increased in demand, and many local police, fire, and health departments have struggled with the growing price. Shortly after the national advisory, CVS Health announced it would offer a discount on Narcan, the branded version of naloxone, to uninsured customers, and reduce the cost to $94.99. Narcan is the only FDA-approved naloxone nasal spray.

Senators Ask CEO for Pricing Transparency After Cancer Drug’s 1,400 Percent Price Increase

Senators Susan Collins (R-ME), Catherine Cortez Masto (D-NV), and Claire McCaskill (D-MO) sent a letter last week to the CEO of Tri-Source Pharma questioning why a drug intended to treat brain tumors and Hodgkins Lymphoma had increased in price by 1,400 percent since 2013. CEO Robert DiCrisci was asked to explain the price increase of the drug lomustine, and provide data on how much of a profit the company makes from the drug. The Wall Street Journal previously reported that a subsidiary of Tri-Source, NextSource Biopharmaceuticals, had raised the price of the drug nine times since 2013. The Senators also requested that Mr. DiCrisci supply information regarding expenses related to the sales of the drug, all documents and communications referring to or relating to the drug’s cost estimates and profit projections, and a list of all drugs sold by the company that have increased in price by at least 200 percent in a single year.