Health Policy Report

White House: Trump Will Announce IPI Model in September

President Trump is expected give a major health policy speech in September, including a roll-out of an international reference price system for prescription drugs. As reported last week in Bloomberg News, the President’s senior adviser, Kellyanne Conway, said that an international pricing index (IPI) for purchasing certain drugs under Medicare would be in the President’s plan, although she gave no indication if the plan would resemble one outlined in an advance notice of proposed rulemaking (ANPRM) from October 2018 that targeted Part B drugs or if it would be more expansive. The plan will reportedly be unveiled alongside a number of other health care-related proposals, though few specifics are available. According to Conway, Congressional Republicans have been briefed on the President’s plans.

Under the proposal first teased last year, the Centers for Medicare and Medicaid Services (CMS) would construct an index of Part B drug prices based on those in a basket of other wealthy countries. Medicare would then cap its reimbursement for Part B drugs at a certain percentage of the index prices with the goal of reducing overall expenditures by 30 percent. The proposal is currently under +review at the Office of Management and Budget (OMB), a sign that CMS +is close to issuing a notice of proposed rulemaking (NPRM). The Administration is also rumored to be considering a similar policy for Medicare Part D — potentially as part of the same rulemaking.

Recently, President Trump floated the idea of an executive order to give the U.S. what he termed “most favored nation” status, requiring drug companies to sell to U.S. customers at “whatever the lowest nation’s price is.” The President first used the term “favored nations” in the drug pricing context during an October 2018 speech where the IPI was first revealed, leading many to speculate that a forthcoming executive order would build upon the IPI proposal. The possible scope of such an order is unclear, and rumors have circulated that the proposal could even extend to commercial markets — although some experts have questioned the administration’s regulatory authority vis-à-vis ERISA plans.

CMS Expands Coverage of CAR-T Immunotherapy Treatments

Last Wednesday, the Centers for Medicare & Medicaid Services (CMS) released a National Coverage Determination (NCD) that will make CAR T-cell cancer therapy available to all Medicare beneficiaries. Under the new policy, Medicare will pay for CAR-T therapies so long as they are administered in health care facilities that follow the Food and Drug Administration’s (FDA) risk evaluation and mitigation strategies (REMS). The final coverage decision differs from the CMS proposal to only cover the therapies in hospitals after oncologists with stand-alone clinics voiced concerns.

Medicare will also cover CAR-T for off-label indications recommended by CMS-approved compendia. Notably, CMS finalized the coverage decision without the proposed “evidence development” requirements that would have compelled providers to participate in a clinical registry or study aimed at determining whether real-world results mirror those from clinical trials. Acting FDA Commissioner Ned Sharpless noted that despite the removal of the evidence development requirement, the FDA will continue working with their partners at CMS and the National Institutes of Health’s National Cancer Institute “to help advance the development and availability of these therapies to patients in need.”

CMS proposed nationwide coverage of CAR T-cell therapy in February, although infighting between career staff and political appointees to drop the evidence development requirement reportedly delayed the final coverage decision. CMS announced they will instead rely on the mandatory post-market studies that FDA already required as a condition of approving the drugs and research conducted at the National Institutes of Health. Administrator Seema Verma said the requirement was dropped for legal reasons, although she did not elaborate, and said CMS was encouraging providers and patients to participate in ongoing research at the National Cancer Institute.

CMS Informational Bulletin Highlights SUPPORT Act DUR Requirements

The Centers for Medicare and Medicaid Services (CMS) released guidance for states on implementing pharmacy safety procedures in their Medicaid programs last Monday. Section 1004 of the SUPPORT Act (H.R. 6, 115th Congress) directs states to implement additional drug utilization review (DUR) standards in their programs and to require contracted managed care organizations (MCOs) to do the same. Many of the new requirements use a prospective review — as opposed to reviewing past claims — to encourage proper use of opioid analgesics. CMS’s new informational bulletin gives states additional clarity on what CMS is looking for in terms of compliance and gives them a roadmap as they work to implement the SUPPORT Act provisions.

CMS directs states to address the following areas in their SPAs: (1) claims review limitations, (2) a program to monitor antipsychotic medication use by children, (3) fraud and abuse identification, and (4) requirements for MCOs. Additionally, the agency encourages states to adopt the Centers for Disease Control (CDC)’s 2016 opioid prescription guideline in their DUR programs, in spite of reported widespread misuse of the guideline and criticism from patient advocates. The changes required by the SUPPORT Act will necessitate changes in the information systems used to administrate Medicaid programs and process claims, and in line with past practice, CMS alerts states that they may be eligible for enhanced federal funding for such changes, amounting to 90 percent of the cost.

CMS Outlines New EHB Benchmark Selection Options

Last Thursday, the Centers for Medicare and Medicaid Services (CMS) released an informational bulletin discussing recently-established flexibilities for essential health benefit (EHB) benchmark plan selection. CMS’ 2019 Payment Notice opened up additional options for states when defining their essential health benefit (EHB) benchmark plans beginning in 2020, and the agency is highlighting those new flexibilities’ specific impact on alternative benefit plans (ABP). CMS clarified that the new EHB selection methodologies applied also to states designing an ABP for their Medicaid beneficiaries. States that adopt new EHB benchmark plan selection methodology will need to submit state plan amendments (SPA) addressing the relevant changes to their Medicaid programs.

States may continue to use their existing EHB benchmark plan selections and use the same benchmark plan as their commercial markets without submitting a SPA. However, if a state decides to develop a new ABP requiring initial benchmark plan selection or change the plan used to define EHBs for its ABP, it must select a benchmark based on CMS’ new criteria and submit a state plan amendment addressing the change. Any plan selected under the new methodologies would be required to comply with previous standards for ABPs’ EHB benchmark plans, including that it be no more generous than the most generous among a set of comparison plans and that the scope of benefits be equal to or greater than a typical employer plan. Only EHBs must be compared in this way and additional benefits do not need to be considered for the purposes of maximum generosity and a typical employer plan. As with any SPA to amend or establish an ABP, states are required to give advance public notice prior to making changes.

The third option available to states, proposing a set of benefits to CMS for approval, offers the most flexibility. The benefits must be consistent with statute requiring coverage of the ten EHBs, but CMS would be able to compare proposed benefits to statute rather than to existing plans. This could give states the opportunity to pare down EHB coverage. Required EHB coverage has spurred criticism from some circles, particularly when covering groups who may not need robust coverage of all ten EHBs. However, others have pointed to coverage of the ten EHBs as necessary for keeping coverage equitable and reasonably priced across the patient spectrum in commercial markets.