Here are your top independent pharmacy news stories for the week of September 27, 2024, including PBM reform in Alaska and Congress’ focus on PBMs and spread pricing.
PBM reform in Alaska
Alaska Governor Mike Dunleavy (R) has signed H.B. 226 into law, a bill spearheaded by the Alaska Pharmacy Association to overhaul pharmacy benefit manager (PBM) practices. The new legislation establishes a duty of care for PBMs toward plan sponsors, benefits administrators, and covered individuals, while introducing new requirements for transparency and disclosure. Read more.
U.S. House Committee Chair Calls Out PBM CEOs for False Claims
On August 28, House Oversight and Accountability Committee Chairman James Comer (R-Ky.) sent letters to the CEOs of CVS Caremark, Express Scripts, and OptumRx asking that they “correct the record” for false and contradictory statements made during the committee’s July 23 hearing.
Comer pointed out that the three CEOs’ testimony was contrary to the findings in both the FTC’s report from earlier this summer and the committee’s staff report. The executives claimed that their PBMs don’t steer patients to their own pharmacies, that they have opaque contract negotiations and opt-out terms, all of which run counter to bipartisan findings.
Comer also noted that under the law those who are untruthful in committee testimony under oath run the risk of a fine or five years imprisonment. The committee is asking the CEOs to provide their corrections to the record within three weeks.
AAP celebrates the passage of H.B. 5378 in the U.S. House of Representatives
This week, the U.S. House of Representatives passed H.R. 5378, Lower Costs, More Transparency Act. According to NCPA, this legislation shines a light on PBM operations and tactics and encourages reform. It would help provide desperately needed relief while also saving taxpayer resources, prohibiting spread pricing and seeing that pharmacies are paid in a way that would cover their dispensing costs.
This bill also includes the Drug Price TransparencyAct which would save taxpayers more than $1 billion over the next 10 years and prohibit spread pricing.
The bill now moves on to the U.S. Senate for passage. We will keep you informed when the vote is scheduled.
CMS issues warning to PBM-insurers, calling for reform
The second PBM reform news story is the warning issued by CMS to PBM insurers, calling on them to make sure independent pharmacies are adequately reimbursed.
The letter goes on to state, “In addition, we know that the increasing level of vertical integration that is occurring among plans, PBMs, and their own pharmacies has the potential to result in anticompetitive behavior and place independent pharmacies at a disadvantage. We urge plans and PBMs to engage in sustainable and fair practices with all pharmacies – not just pharmacies owned by PBMs – and we are closely monitoring plan compliance with CMS network adequacy standards and other requirements.” Read the full letter here.
Cigna calls off merger with Humana
According to Reuters, U.S. health insurer Cigna has called off its attempt to negotiate an acquisition of Humana after the pair failed to agree on price. Cigna has announced plans to buy back $10 billion worth of shares.
A Cigna-Humana combination would have created a company with a value exceeding $140 billion, based on their market values, but was certain to attract fierce antitrust scrutiny. The discussions came six years after regulators blocked other deals between Humana-Aetna and Cigna-Anthem.
Cigna is still exploring the sale of its Medicare Advantage business, which manages government health insurance for people aged 65 and older, and its performance has been disappointing to investors.
The Food and Drug Administration has issued a one-year delay on the final enhanced drug distribution security requirements under the Drug Supply Chain Security Act (DSCSA). Those requirements were set to take effect in November. The new date will be Nov. 27, 2024.
The decision to delay the DSCSA requirements was made after several advocates warned the FDA that the supply chain was not ready to comply. The extended time aims to allow each sector of the pharmaceutical supply chain time to develop the systems and processes necessary for efficient transactions. Read more.
Moderna’s updated COVID-19 vaccine is effective against Eris variant
In this Weekly Rx Roundup, Moderna reports an initial study data showed its updated COVID-19 vaccine to be effective against the “Eris” and “Fornax” subvariants in humans.
The company expects the updated shot to be available, pending approval from the FDA, in the coming weeks for the fall vaccination season.
Pfizer has reported that its updated COVID-19 shot showed success at neutralizing activity against the Eris subvariant in a study conducted on mice. Pfizer has yet to complete its study in humans.
Eris, the nickname for EG.5, is a sub-lineage of the still-dominant Omicron variant. EG.5 accounted for about more than 17% of COVID-19 cases in the U.S., according to the latest government data. Infections from Fornax, officially known as FL 1.5.1, are also rising across the country.
Two big PBM stories in this Weekly Rx Roundup
Shares of CVS Health plunged 8% on Thursday after Blue Shield of California said it will drop the company’s pharmacy benefit management services and instead partner with Mark Cuban’s Cost Plus Drugs company and Amazon Pharmacy to save on drug costs for its nearly 5 million members.
The announcement hints at the potential for health insurers to abandon the traditional pharmacy benefit manager, or PBM, system and sent shares of other companies that offer PBM services lower.
CVS Health’s Caremark has been Blue Shield’s PBM partner for more than 15 years.
The other big story is that the United States Tenth Circuit Court of Appeals on Tuesday issued an unfavorable decision in the Pharmaceutical Care Management Association (PCMA) v.Mulready appeal.
The decision overturns Oklahoma’s effort to regulate pharmaceutical benefit managers (PBMs) – and likely would have implications for other states as well. The ruling allowing PBMs to escape certain state regulation by hiding behind the alleged preemption of that law by federal ERISA and Medicare Part D laws.
“The Tenth Circuit decision is inconsistent with what other federal courts have decided, and it departs from the Supreme Court’s unanimous Rutledge decision, which clearly held that PBMs can’t hide behind ERISA. It must be overturned,” said B. Douglas Hoey, CEO of the National Community Pharmacists Association.
AAP is following this story closely and will keep you updated as it unfolds.
Schedule meetings with your local policymakers during the August legislative recess
The August legislative recess is here. This is the perfect time to invite your local state and federal policymakers to your store and explain how they can help your business.
With the flurry of activity this year on Capitol Hill lawmakers looking to hold PBMs’ feet to the fire, AAP and NCPA members have testified before the House Oversight and Accountability Committee and the Ways and Means Health Subcommittee, as well as the Senate Commerce Committee.
Additionally, the Drug Price Transparency in Medicaid Act, was unanimously advanced out of the Energy and Commerce Committee to the House floor as part of the PATIENT Act. These are all encouraging developments, but we need to keep the pressure on policymakers to finish the job and send a comprehensive PBM reform bill to the president’s desk.
This can best be accomplished by hosting members of Congress and candidates in your pharmacy for one-on-one meetings, giving them a firsthand look at the important role you play in your community and in helping your patients, and highlighting the harm abusive PBM practices have on both your pharmacy and your patients. If you aren’t sure how to contact them, you can look up their information here.
During the August legislative recess, members of Congress are usually home meeting with constituents. This is a very opportune time to host your legislators in your pharmacy.
We need all community and LTC pharmacists to participate in this important month of action and keep the pressure on our elected officials to take strong legislative action.
When you do host your local lawmaker, let AAP know. Send us an email and pictures so we can share with our other Members on social media and in our weekly newsletter.
Take advantage of this great opportunity to promote yours and every independent and community pharmacy.
Breaking News: PBM reform bill advances in Senate vote
More good news for independent pharmacies – a PBM reform bill advances in Senate vote. On July 26, the U. S. Senate voted 26-1 to advance the Modernizing and Ensuring PBM Accountability Act to a vote of the full Senate. This vote is a big step for independent pharmacies because this PBM reform package contains several provisions to enhance transparency into PBM-insurer operations, improve patient access to community pharmacies, and ensure fair pharmacy reimbursements that are based on actual acquisition and dispensing costs.
After a full U.S. Senate vote, the next step would be a vote in the House of Representatives. No date has been set for that, however.
The package also contains language from two other bills: the Drug Price Transparency in Medicaid Act (S. 1038), which creates a fairer reimbursement rate for pharmacies operating in Medicaid managed care, and the Protect Patient Access to Pharmacies Act (S. 2052), which reforms Medicare Part D by clarifying and providing enforcement tools for the any willing pharmacy law. NCPA has more details about the PBM reform bill that advanced in Senate vote
Another blow to was dealt to the PBM industry last week. Federal Trade Commission voted unanimously to warn that some of its previous advocacy statements related to PBMs no longer reflect current market realities. The decision effectively removes a major line of defense for the PBM-insurers in litigation, arbitration, and lobbying against state and federal reforms.
Our friends at NCPA were instrumental in persuading the commissioners to reconsider the agency’s prior statements and ultimately bring it to a vote. Read more on NCPA.org.
After more than three years, the COVID-19 public health emergency ended Thursday.
While many Americans may not initially notice the sunsetting of the declaration, they are likely to feel it if they come down with COVID-19 or suspect they might have it. They could have to start paying for testing and treatment that they’ve grown used to being free during the pandemic. Just how much depends on the type of health coverage they have. Get the testing and vaccine details here.
FDA Advisory panel votes unanimously in favor of making Opill birth control an OTC
Advisers to the Food and Drug Administration on Wednesday voted unanimously to recommend making a birth control pill available without a prescription.
The 17-0 vote by two advisory panels came despite concerns from agency officials about the quality of the data used to support switching Opill from prescription to over the counter. The agency did not have concerns about the safety and effectiveness of the drug.
The FDA is not required to follow the recommendation but the panel’s opinion will weigh heavily on the FDA’s final decision, which is expected later this summer. Read more here.
FDA approves Rexulti for the treatment of agitation associated with Alzheimer disease dementia (AAD)
It is now the first FDA-approved treatment indicated for AAD in the U.S. According to John J. Miller, MD, Editor in Chief of Psychiatric Times. “Baby boomers are retiring and Alzheimer disease is on the rise, and AAD in one of the most difficult complications of dementia. Meanwhile, the need for treatments of Alzheimer disease and dementia remains huge and largely unaddressed. This approval parallels nicely with recent drug development and research working on decreasing disease progression by removing amyloid plaque with monoclonal antibodies and improving cognitive function.” Read more.
A group of pricey breakthrough prescription drugs are poised to shake up the market this year — including an Alzheimer’s treatment that could be approved today by the FDA.
Why it matters: Though the drugs offer hope to patients with hard-to-treat conditions like Alzheimer’s or sickle cell disease, or who struggle with obesity, their potentially eye-popping prices are sure to create dilemmas for insurers, government programs and patients themselves.
The big picture: The approvals could fuel already-contentious debates around affordability and equity, giving ammunition both to those who say innovation doesn’t come cheap and others who contend medical advances are meaningless if patients can’t access them.
Although some of the drugs could be transformative, “they will create choices that need to be made and they will also create potential burdens, particularly on the most vulnerable, on people who are the least well-insured and people who live in states or happen to have insurance coverage that is the least generous,” said Rena Conti, a professor at Boston University’s Questrom School of Business.
None of the drugs would be subject to the price controls that congressional Democrats included in the Inflation Reduction Act.
Driving the news: The FDA is expected to today decide whether to approve Eisai and Biogen’s lecanemab, a treatment for Alzheimer’s disease, setting into motion another round of debate over how much the drug should cost and whether Medicare should cover it.
It would become the second FDA-approved Alzheimer’s treatment targeting amyloid plaques that are believed to contribute to the development of the disease. But it isn’t likely to cause as much controversy as Biogen’s Aduhelm did when it was approved in 2021.
Biogen initially priced that drug at $56,000 a year, drawing outrage from critics and presenting big questions about how Medicare could absorb the large spending spike if millions of beneficiaries tried to get it.
If lecanemab is approved, experts will be closely watching both its list price and whether the FDA limits its use to subgroups of Alzheimer’s patients. Both factors will be crucial in determining potential spending on the drug.
A cost-effective price would be between $8,500 and $20,600 a year, the Institute for Clinical and Economic Review said last month.
State of play: The drug pipeline is brimming with other experimental cures that could make headlines this year.
Data for another promising Alzheimer’s treatment by Eli Lilly that is similar to lecanemab is expected midyear, per a recent Cowen research note, and Medicare will almost certainly have to revisit its coverage policy for the entire class of drugs.
Several multi-million dollar gene therapies have already been approved. But this year the pipeline includes two treatments for sickle cell disease, which has a much larger patient population.
Clinical trial results for Eli Lilly’s obesity drug candidate are also expected in April, potentially ushering a new entrant to what could become a booming market. Disputes over coverage of obesity drugs already on the market will almost certainty continue.
Between the lines: Some novel drugs present an inherent dilemma: They’re worth a lot of money because of the way they can dramatically improve patients’ lives. Even so, manufacturers can still price these drugs well above what experts say they’re worth.
Gene therapies may cost millions per patient. Other drugs could cost much less per course, but cater to enormous patient populations or may require long-term use.
In any scenario, the expense could present complex problems to federal and state health programs, private insurers and patients who wind up on the hook for out-of-pocket costs.
“We’re fortunate there are so many treatments in the pipeline that promise to transform the quality of care for people with devastating diseases. While we recognize there are concerns about cost, the facts point to a health care system that can sustain this incredible innovation over the long haul,” said Priscilla VanderVeer, vice president of public affairs at PhRMA.
Yes, but: The final cost burden hinges on several factors, starting with where manufacturers set the launch price.
CMS has issued the final physician fee schedule for CY 2023, which updates vaccine payment information. The CY 2023 payment amount for influenza, pneumococcal, and HBV vaccine administration is $31.14. This amount will be geographically adjusted based upon the fee schedule area where the preventive vaccine is administered. With regard to COVID-19 vaccine administration, for CY 2023 the payment amount is $41.52. This differential will remain in place until the end of the calendar year in which the current Emergency Use Authorization declaration for drugs and biologicals with respect to COVID-19 ends. Thereafter, the payment amount for COVID-19 vaccine administration will be adjusted to align with the payment rate for the other Medicare Part B preventive vaccines. Learn more.
Two of the largest U.S. pharmacy chains, CVS Health and Walgreen Co., announced agreements in principle Wednesday to pay about $5 billion each to settle lawsuits nationwide over the toll of opioids, and a lawyer said Walmart is in discussions for a deal.
Together, the developments amount to what could be the last round of huge settlements after years of litigation over the drug industry’s role in an overdose crisis that has been linked to more than 500,000 deaths in the U.S. over the past two decades. Read more.
With the adjournment of the California Assembly on August 31, only four state legislatures remain in session for 2022—Michigan, Pennsylvania, Ohio, and New Jersey. (As of this writing, Missouri is in Special Session to deal with state tax issues; a state legislature calendar is available here.) The National Conference of State Legislatures bill tracking database shows that through August, 418 bills had been introduced, in 47 states, directly addressing prescription drug-related issues. Read more.
At last! After nearly a year of committee hearings and political maneuvering, Congress finally has approved legislation to reauthorize FDA’s user fee programs for brand and generic drugs, biosimilars, and medical devices. The current programs expire with the close of fiscal year 2022 on September 30. Reauthorization will enable FDA to continue collecting application and facility user fees from industry for fiscal years 2023 through 2027, a 5-year period that begins October 1. Read more.
A federal judge ruled on September 19, 2022, against a Justice Department antitrust challenge to UnitedHealth‘s $13 billion acquisition of health-technology firm Change Healthcare, rejecting government claims that the deal would unlawfully suppress competition and limit innovation in health-insurance markets.
U.S. District Judge Carl Nichols ruled for the companies in an opinion that he kept under seal for now because he said it “may contain competitively sensitive information.” The judge said he would release a redacted public version of the ruling in the coming days. In a one-page public order, he denied the Justice Department’s request to block the companies from completing the deal. Read more
Under the new law, the U.S. government is now able to negotiate prices on the costliest prescription drugs, cap costs at $2,000 per year for people on Medicare, limit the monthly cost of insulin to $35 for seniors, and extend subsidies for people buying their own health coverage through the Affordable Care Act, also known as Obamacare. The law also provides free vaccines for seniors. Read more.
The US Senate passed the Inflation Reduction Act on Sunday. The bill includes provisions that will impact community pharmacies, like Medicare pricing, drug rebates and insulin copays. Read more about the bill here.
Flu season is fast approaching. And it’s more important than ever for patients, particularly those who are at risk, to be vaccinated against influenza. Adults 65 and older, along with those with severe health problems, people of color and those of lower socio-economic status are at higher risk of developing severe complications from the illness. Getting vaccinated can help protect these vulnerable populations. Learn more about the selected strains, changes to vaccine recommendations and what to expect next.
Did you know that more than one-third of health care organizations in the United States were hit by ransomware attacks in 2020? Approximately 65% of these attacks were successful, and approximately one-third of the organizations that had data stolen paid up. However, only 69% of organizations that paid ransom actually got their data back. Here are some tips to help you protect your patients’ information. Read more.
With PCMA’s failure to file its appeal by the July 11, 2022 deadline, North Dakota can regulate PBMs as it sees fit. PCMA has exhausted its legal options. So, the ruling in PCMA vs. Wehbi is now the law of the land for the states in the 8th Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota). Read more
As expected, Florida Governor Ron DeSantis signed the PBM transparency order. The order is aimed at lowering the price of prescription drugs. AAP Member Ben Levine was at the governor’s side during the signing. Levine calls this order a victory for all Floridians. “This transparency will really help drive down drug prices, and also improve access for patients in our community so that they can go to the pharmacy they choose.” Read more about the executive order.
Florida Gov. Ron DeSantis (R) today announced plans to sign an executive order that would hold PBMs accountable and provide drug cost transparency. Under the order, state agencies will be directed to reevaluate their contracts with PBMs to ensure “that costs to the state of Florida are justified.” Read more about the order.
01 March 2022, Berlin: The drug Paxlovid against Covid-19 from the manufacturer Pfizer is lying on a table. Photo: Fabian Sommer/dpa (Photo by Fabian Sommer/picture alliance via Getty Images)
It’s a win for pharmacies, which had been pushing for the FDA to allow them to prescribe the medication, saying that it would ultimately expand access to the antivirals.
Paxlovid is authorized for the treatment of “mild-to-moderate” COVID-19 in adults and pediatric patients that have tested positive and are considered to be at high risk of developing severe disease.
A federal judge on Monday ruled in favor of three major U.S. drug distributors, AmerisourceBergen Drug Co., Cardinal Health Inc. and McKesson Corp., in a landmark lawsuit that accused them of creating a health crisis. Read about the ruling.
California Gov. Gavin Newsom (D) signed the state budget, including a provision that forgives $142 million in Medi-Cal clawbacks from independent pharmacies in the state. Read more here.
Businesses owners, including those who work within the pharmacy industry, often face situations in which legal advice becomes useful. Getting the right legal advice can be pricey, but it can save a lot of time, money and hassle in the long term. Here are some situations where getting good advice is crucial.
Cardinal Health issued a new alert regarding recently reported fraudulent activity. There are reports of individuals falsely claiming to be representatives from pharmaceutical wholesalers and courier service employees. This is an industry-wide issue, as criminals attempt to place orders and intercept delivery of the product. Be on the lookout, and read the full alert here.
