2013 Agenda: Implementing the Prescription Drug Provisions of the Affordable Care Act

• Medicaid rebates can and should be improved. The Affordable Care Act changes how Medicaid rebates are administered, and one outcome could be better oversight of drug industry rebate calculation and payment. The current system is rife with fraud, and the lack of a national database of drug prices has made it difficult for states to negotiate uniform pricing. The Affordable Care Act changes the way rebates must be calculated at both the state and federal levels, increasing the amount of rebates for some drugs and establishing through regulation a national price list from which rebates can be calculated.

• Implementing the Affordable Care Act provides states with new levers to promote a variety of prescription drug policies. "Obamacare" includes a variety of provisions relating to pharmaceutical policy, including Medicaid drug pricing and reimbursement, benefit management and marketing. There are potentially opportunities for legislators to expand some existing state programs and look for alternative ways to implement other policies such as pharmacy benefit manager (PBM) transparency, disclosure of gifts and payments to physicians, datamining, academic detailing and more. States get to set the rules for the insurance exchanges and the federal government is promoting state flexibility, so states should investigate opportunities to promote better prescribing and pharmacy benefit practices.

See Also:

Planning a State Legislative Agenda for 2013 | more

Who’s Looking Out For The Kids

State legislators and policymakers need to pay attention to a growing issue: over-prescribing powerful drugs to children - drugs that often have not been tested for their effects on children and that have significant side effects and sometimes questionable value. From heavy prescribing of ADHD drugs generally to policies affecting children in foster care and patients on Medicaid, states need to review their oversight and policies. This year, Minnesota adopted a new policy requiring requiring doctors in many cases to begin using a state-funded consulting service before prescribing powerful psychiatric medications for young patients.

See Also:

Planning a State Legislative Agenda for 2013 | more >>

2013 Agenda: We Suggest Legislators Review Compounding

Cracking down on compounding pharmacies. 

With the death count currently at 20 and 254 sickened - and more expected - from contaminated steroid injections, a spotlight has been aimed at compounding pharmacies. It turns out states are the regulators of these entities, some of which have morphed into loosely regulated drug manufacturers. Clearly, the current crisis calls out for comprehensive federal oversight. But how many of us expect that Congress will act promptly to clarify and expand the FDA's authority? In the absence of a speedy revamping of federal authority, state legislators need to review their statutes and regulations, as well as the enforcement of those rules. While it appears that Massachusetts had some key rules in place, with complaints going back to 1999, enforcement zeal remains a question. Other states may want to look to new policies in Massachusetts including surprise inspections just announced by Governor Deval Patrick.
In addition to reviewing and beefing up their pharmacy regulations, legislators should consider a focus on best practices for prescribing and review reimbursement rules for state-funded prescription drug and insurance programs. There are a lot of steroid injections being prescribed for pain. Are they warranted given the risks? According to the Wall Street Journal, patients are going ahead with these treatments despite the risks. Just as federal policymakers are scrutinizing Medicare, state policymakers should look at Medicaid and other programs where states set the rules or pay the bills and determine if changes are warranted.

A good place for legislators to start would be to review Congressman Markey's October 29, 2012 report on federal and state oversight and note the gaps in state regulations and enforcement. Link to report: http://markey.house.gov/document/2012/compounding-pharmacies-compounding-risk-report

See Also:

Planning a State Legislative Agenda for 2013 | more UPDATE (10-30-2012): Tragically the death count has changed to 23 confirmed deaths.

Datamining, Round 2

The pharmaceutical and datamining lobbyists have been making the rounds of the Northern New England legislatures, offering up legislation to implement some legal "housekeeping" by repealing the laws at issue in IMS v Sorrell, in which the US Supreme Court overturned Vermont's prescription record privacy law. While Vermont and Maine legislators duly enacted these repeals, New Hampshire lived up to its "Live Free or Die" motto and dug in its heels. NH Rep. Cindy Rosenwald, sponsor of the first prescriber privacy law in the country, reported in the NLARx summer meeting that the NH House passed, by a large margin, an amendment to the industry repeal bill that tweaked the NH privacy law by amending the state's HIPAA provisions, retaining a level of privacy protection for this data. The Senate refused to go along, so the entire bill died. Expect New Hampshire legislators to bring this issue back for reconsideration in the next Legislature. Attendees of our summer meeting also heard from Boston University Law Professor Kevin Outterson and Washington College of Law Pharmaceutical Fellow Meredith Jacobs on the legal issues raised by IMS v Sorrell and possible legislative approaches to protect the privacy of patient and provider prescription information, while complying with the First Amendment legal standard established by the Supreme Court.

Link to Story

Vermont's Vaccination Saga

Senator Kevin Mullin shared a fascinating report at the summer meeting on his efforts to remove the parental philosophical objection provisions in Vermont law and boost vaccination rates in his bill, S199. Senator Mullin recounted Vermont's experience from the earliest days of the state's history when local hero Ethan Allen was vaccinated for smallpox to the success in nearly wiping out polio with routine vaccinations, to today, when vaccination rates are sliding, posing real public health risks. While his original bill did not pass both the Senate and House, the latter which opposed removing the philosophical objection, Senator Mullin was able to pass a stripped-down data collection version of S199, that reads as follows: Sec. 1. 18 V.S.A. § 1121 is amended to read: § 1121. IMMUNIZATIONS REQUIRED PRIOR TO ATTENDING SCHOOL AND CHILD CARE FACILITIES *** (c) To the extent permitted under the federal Health Insurance Portability and Accountability Act, Pub. L. 104-191, all schools and child care facilities shall make publicly available the aggregated immunization rates of the student body for each required vaccine using a standardized form that shall be created by the department of health. Each school and child care facility shall annually, on or before January 1, submit its standardized form containing the student body's aggregated immunization rates to the department of health. Notwithstanding section 1120 of this title, for the purposes of this subsection only, the term "child care facility" shall exclude a family day care home licensed or registered under 33 V.S.A. chapter 35.

Link to Story

For more information:

Sharon Anglin Treat, NLARx Executive Director
207-622-5597
streat@reducedrugprices.org

Trade Policy & Pharmaceuticals:

The Korea-US Free Trade Agreement (FTA) and Australia-US FTA included provisions for the first time that directly addressed drug pricing for reimbursement purposes by government health programs like Medicaid. These provisions were applicable to the U.S. as well as our trading partners, but a footnote in the Korea agreement, which was strongly advocated for by NLARx and governors in several U.S. states, clarified that Medicaid rebates would not be affected by these provisions. Now the U.S. government is involved in negotiations over the 9-country TransPacific Partnership or TPP trade deal (soon to be 11 countries), and similar provisions have been proposed. These provisions are being advocated for by PhRMA and the biomedical and medical device industries, and would limit how effectively governments can negotiate prices. Once again, NLARx and a number of states have objected to this languagewhich seems intended to drive drug prices ever higher, and which also includes provisions that raise safety concerns. Although the US government has indicated an interest in again "carving out" Medicaid, state legislators worry that other safety net programs such as 340B will be caught in this net.

There are some useful new materials to help understand this issue. At the NLARx meeting in Burlington, Executive Director Sharon Treat presented on the TPP issues. In addition, a recent report commissioned by the Maine Citizen Trade Policy Commission analyzed the potential impact of these pharmaceutical provisions on the Maine Medicaid program, and other states would be similarly affected. Finally, although not limited to pharmaceutical issues, a resolution finally passed July 15 by the NCOIL International and Executive Committees calls for more consultation with state legislators and greater transparency in the TPP and other trade negotiations.

Link to Story

Wither the Affordable Care Act?

With all the focus on the individual mandate and Medicaid expansion provisions of the Affordable Care Act, relatively little attention has been paid to the multitude of provisions in the Act that affect pharmaceutical policies including pricing, reimbursement, benefit management and marketing. Yet there is a lot there, and there are potentially opportunities for legislators to expand some existing state programs and look for alternative ways to implement other policies such as PBM transparency, disclosure of gifts and payments to physicians, datamining, academic detailing and more. NLARx Executive Director Sharon Treat presented briefly on many of these provisions, and the legislators and legislative staff present agreed that a future NLARx meeting should be devoted to exploring the ACA and the opportunities for state legislators to expand on policies in the Act, such as marketing disclosure, and potentially to use the rules of the Exchanges to promote greater transparency in PBMs as well as to fine-tune data and electronic record privacy provisions.     

Link to Story              

More Spotlights on Affordable Care Act Here

REGISTER NOW

NLARx Summer Meeting
Friday, July 13, 2012
3:15 - 6:15 pm (registration is at 3 pm)
108 Cherry Street, Conference Room 2B
Burlington, Vermont

Catch up on the latest prescription drug policy being advocated by state legislators from around the country at the Summer NLARx meeting in beautiful Burlington, Vermont.

 Register here          Hotel & Travel Information

We have conveniently scheduled our meeting so that legislators interested in health care policy who are attending the sessions on the Affordable Care Act or trade policy at the NCOIL conference may also participate in our meeting on pharmaceutical policy.  

Agenda

• IMS v Sorrell - Where do we go from here? New Hampshire's pioneering work on prescriber privacy continues in spite of a setback to its datamining law in the U.S. Supreme Court. Is there a way forward that balances First Amendment protections with patient and prescriber privacy and public health concerns?

Speakers: Prof. Kevin Outterson, Boston University Law School; N.H. State Rep. Cindy Rosenwald

• Vaccination policy - This year, the Vermont Legislature tackled the difficult issue of parental opt-outs. Balancing public health and parental involvement in vaccination policy presents challenges for all states.

Speaker: Vermont State Senator Kevin Mullin

• Specialty drugs - Rising costs spur state policy responses across the country.  Will the Affordable Care Act come to the rescue? What options do states have?

Speaker: Maine State Rep. Sharon Treat, NLARx Executive Director

• Trade policy and drug prices - Will the Trans-Pacific Partnership prevent states and the federal government from negotiating drug prices? What's the latest news about Big Pharma's strategy to keep prices high through trade policy?

Speaker: Maine State Rep. Sharon Treat, NLARx Executive Director

Meeting registration is at 3 pm, and the meeting will run from 3:15-6:15 pm.  

Registration costs only $25 for state legislators, so there's no reason to delay! 

 
We also plan a networking dinner for legislators at a local restaurant Friday night. For more information about registering for the meeting or attending the dinner, call Tina at 207.622.5597 or email us at info@reducedrugprices.org.

States Cut Prescription Drug Coverage

An unfortunate consequence of the recession and reduced revenues have been significant cuts to state prescription drug assistance programs and Medicaid coverage including for prescription drugs.  

In Texas, 500,000 free vaccines for kids won't be provided anymore.  Legislators in Maine enacted a budget cutting health care entirely for 20,000 young adults aged 19-20 and eliminated 1,500 seniors from prescription drug assistance.  The budgets passed by both the House and Senate in Illinois would eliminate the elderly prescription drug assistance program serving 180,000 people to save $72.2 million. Cuts of $36 million to New York's EPIC program (Elderly Pharmaceutical Insurance Coverage) went into effect in January.

This recent report from the Community Access National Network outlines Medicaid cuts proposed or enacted in many of the 50 states, including pharmaceutical cuts. The report lists the following states as having numerical limits on the number of prescriptions (some with monthly caps) that may be purchased through Medicaid: Alabama, Arkansas, California (proposed), Georgia, Illinois (proposed), Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, West Virginia. See also this report from the Kaiser Family Foundation on planned mid-year cuts to Medicaid in 10 states.

In a "double overtime" special session, Washington state avoided cuts to pharmacy despite early proposals that would have made significant cuts.

Australia's Price Cuts Contrast Sharply With US Drug Costs

As US Drug Prices Increase, Australia's "PBS" Keeps Drug Costs Manageable
Will trade policy cause prices hikes?

An Australian government law effective April 1, 2012 will slash prices on 1000 brands of 60 popular prescription medicines by up to $14 a script. Not only will thousands of families pay less for prescription drugs, but taxpayers who subsidize the cost of the life-saving medicines through the national government's Pharmaceutical Benefits Scheme (PBS) will also save $1.9 billion over five years. The Sydney Morning Herald reports "Millions of patients will pocket average savings of $3 a pack on essential drugs to treat high blood pressure, cholesterol, diabetes, epilepsy, depression and pain. Sixty commonly prescribed drugs will be cheaper for patients, while taxpayers will save $1.9 billion - freeing up funds to subsidies new drugs for leukemia, arthritis and HIV for the first time."

Drug prices in Australia are already very low in comparison to in the US
because of the role of the Australian government in both subsidizing drug costs for its citizens and also establishing reference pricing under the national PBS. For example, 300 patients a year who are newly diagnosed with chronic myeloid leukemia will no longer face bills of $30,000 a year to buy the drugs dasatinib and nilotinib.

According to an article in the Courier Mail/Sunday Mail, "Drug companies hope those savings will also help the Government list new drugs on the taxpayer-funded PBS, with a swag of new treatments for cancer, arthritis and kidney failure set to join the taxpayer-subsidized medicines scheme."

The paper reports, "Because the price of the drugs will now fall below the co-payment for prescription medicine of $35.40, patients will secure big savings and pharmacists can compete on price. Pensioners and concession card holders will continue to pay $5.80 a script."

Such drug costs are almost shockingly low even without the price cuts from a US standpoint. A recent AARP report found that the retail price of the 514 drugs most widely used by Medicare recipients rose approximately 26% between 2005 and 2009. Although the price of generics decreased 31% during this same time period, brands increased 41% and specialty drugs increased more than 48%. Read the AARP report.

According to the Sunday mail article "The vast majority of prescription medicines are purchased by patients with concession cards who will continue to pay $5.80 a script,'' Pharmacy Guild of Australia spokesman Greg Turnbull said. "The average cost of the thousands of medicines on the PBS is about $48. So every time you pay $5.80 you are getting a massive saving.''

The price cuts also apply to super-expensive cancer and specialty drugs. For example, 300 Australian patients a year who are newly diagnosed with chronic myeloid leukaemia will no longer face bills of $30,000 a year to buy the drugs dasatinib and nilotinib.

Compare this to what Americans face. An April 2 article on US prices in FiercePharma reported that new cancer drugs are "more expensive than ever. Just look at some of the recently approved products in the category: Dendreon's prostate drug Provenge at $93,000; Pfizer's targeted lung-cancer treatment Xalkori at $115,000 a year; Bristol-Myers Squibb's melanoma drug Yervoy at $120,000 per year; and Roche's targeted melanoma med Zelboraf at $56,400 for a 6-month course."

Reuters reports on the implications of these high costs for developed and developing countries alike: "Cancer is a leading cause of death worldwide, accounting for 7.6 million deaths in 2008 and predicted to top 13 million in 2030, according to the World Health Organization. Some 70 percent of deaths occur in low- and middle-income countries.

For drugmakers, the disease is a rich seam of sales and profits. Cancer medicines overtook cholesterol fighters as the biggest-selling selling prescription drug class five years ago and sales are set to hit $85 billion in 2016, up from $58 billion last year and a mere $8 billion in 2000, according to consensus forecasts compiled by Thomson Reuters Pharma."

The Reuters article acknowledges that in the United States, "some cancer patients have abandoned medical care because of their bills or else face a significant risk of bankruptcy, according to studies presented at the American Society of Clinical Oncology last year."

Capping specialty drug costs. No wonder some states are rebelling, and putting limits on what insurance companies can charge for specialty drugs such as these new cancer drugs, with Maine recently enacting a $3500 annual out of pocket limit for specialty drugs. Link to LD 1691 The federal Affordable Care Act will also require prescription drug costs to be included within the overall deductible for medical costs in insurance policies beginning January 1, 2014. Read more.

Trade policy implications. Of course, this does little to address the underlying prices of these drugs, and there is widespread concern among NGOs concerned with access to medicines, academics, and US states that recent trade agreements with Korea and under negotiation with Pacific Rim countries (the Trans-Pacific Partnership or TPP) will lead to locking in these high "market-based" prices. In Australia, concerns have been raised that the TPP will interfere with the successful pricing strategies of the PBS. For more on this trade and pharmaceutical pricing, read about trade policy on the NLARx website.

Recent Action on Prescription Drug Policy in the States

More Action in the States: Vaccination Policy, Immunity, Joint Purchasing, Payments to Doctors & More

VERMONT VACCINATION POLICY DEBATE:
The House Committee on Health Care marked a significant policy shift last week, when a majority of the committee in a straw poll said it would oppose removing a philosophical exemption for parents who choose not to vaccinate their children.

The Senate passed, by an overwhelming majority, a bill that requires all children be vaccinated against a range of illnesses. The bill prevented parents from claiming "philosophical exemptions," which would allow them to refuse to vaccinate their child before sending them
to school.

The House committee, however, passed a bill that allows for those philosophical exemptions.

According to reporting by WCAX.com, "The bill they voted out will not directly address the decline in rates we've seen in Vermont. I am disappointed. I wish they could've done more," said Sen. Kevin Mullin, R-Rutland County, who is also Vice Chair of the NLARx Board of Directors.

But the bill saw fierce debate in the House, and last week a compromise that would have kept the exemption failed on a tie vote. It is unclear at this point whether it will make it to the House floor. Read the Vermont Digger story.

VERMONT MARKETING & DOC PAYMENT REPORT OUT:
Vermont's annual report from its Attorney General on drug company spending on payments to doctors and other medical providers is now out. The Vermont law is one of the models for the federal Physician Payment Sunshine Act which was part of the Affordable Care Act, the implementation of which remains delayed. Vermont's current report found in FY11, approximately 42% of the $5.6 million in expenditures were for clinical trials and research. Doctors received 23% of the expenditures, 12% went to professional, educational, or patient organizations and 5% to academic institutions; 12% of the expenditures went to all health care providers combined for educational materials.

Overall, 154 manufacturers of pharmaceuticals, biologics, and medical devices spent approximately $5.6 million in direct payments to Vermont doctors, hospitals, universities and others. That figure represents an overall spending increase of 17% from the $4.8 million reported the previous fiscal year. In particular, the amount spent on pharmaceutical marketing ($2.2 million) is about 22% higher than the $1.8 million reported in the previous fiscal year. This is in spite of the fact that Vermont has a law banning most gifts and payments to medical providers. Read more in the Vermont Digger.

ILLINOIS GOVERNOR QUINN SEEKS BIG CUTS:
Lawmakers are trying to figure out how to meet Governor Pat Quinn's goal of cutting the $14 billion Medicaid program by $2.7 billion, and are scrutinizing the big-ticket cost of the pharmaceuticals. More

OREGON'S EFFORT TO MAKE STATE DRUG PURCHASING MORE EFFICIENT FAILS AGAIN:

Oregon is not finding it easy to make state drug purchasing more efficient. For the second year in a row, legislation requiring state agencies to purchase their prescription drugs through the Oregon Prescription Drug Program (OPDP) was unable to overcome staunch opposition from the pharmaceutical industry and insurance lobbyists. This is in spite of the fact that a legislatively required study by the Department of Corrections showed the agency could save approximately $1.4 million based on half the drugs purchased by the department. In addition, Public Employees' Benefit Board could save $5.1 million. Read more in The Lund Report.

ARKANSAS MEDICAID FALSE CLAIMS ACT CASE GOES AFTER RISPERDAL MARKETING:
Bloomberg BusinessWeek reports that the state of Arkansas is in court charging a subsidiary of pharmaceutical company Johnson & Johnson improperly marketed an antipsychotic drug and lied to doctors for years about the risk of side effects.

Arkansas wants Janssen Pharmaceuticals Inc. fined for each of the 250,000 Risperdal prescriptions issued to the state's Medicaid patients from November 2002 through June 2006, an award that could range from $1.25 billion to $2.5 billion and would go toward the state's Medicaid fund.

The state claims that Janssen violated Arkansas' Medicaid Fraud False Claims Act by misrepresenting of the drug's side effects of diabetes and hormonal imbalance. The state also claims the company violated the Deceptive Trade Practices Act by lying about the drug's risks in a letter sent to Arkansas doctors. Read more

NORTH CAROLINA CONSIDERS DRUG COMPANY IMMUNITY:
A senate committee is considering legislation to immunize drug companies from liability for harm from FDA-approved drugs, after case filed involving Brittany Prewitt, 15, who was taking the drug Yaz to clear up her acne and collapsed while playing catch with her father. The family is suing Bayer, claiming the company suppressed information about dangers associated with Yaz. More

RHODE ISLAND BILL WOULD BAN COUPONS:
Rhode Island would join Massachusetts as the only states with a ban on coupons for prescription drugs if a bill currently pending passes. Read the bill.

State PBM Regulations Get New Life

We're not sure if it's the federal attention being paid to the proposed Medco-Express Scripts merger, state budget pressure, or the advocacy of pharmacists -- probably all three -- but states are taking a second look at PBM laws and there is more attention being paid to these middlemen than we've see in years. For instance, here's an editorial in the Houston Chronicle opposing the merger.

Pharmacists in Alaska turned out to support HB 259, complaining of abusive PBM audit practices. Utah legislation, HB 76, also focuses on these audit practices. The Mississippi Board
of Pharmacy is now implementing its PBM law passed last year.

House Bill 4122 is pending in Oregon, and PBMs have gone on the warpath with a big advertising buy and heavy lobbying. HB 4122 would require PBMs be regulated by the Oregon Board of Pharmacy, and force them to provide insurers and the Oregon Health Plan with information about the rebates and contracts the PBMs enter into with drug manufacturers. The transparency is intended to ensure that PBMs are passing on the savings they generate onto insurers and, eventually, health care consumers. The bill has bipartisan support, and is backed by the Oregon State Pharmacists Association, the Oregon Society of Health-System Pharmacists, and the National Association of Chain Drug Stores.

Bipartisan PBM legislation is also pending in Washington state - HB 2303 and SB 6096. These bills are quite comprehensive and have much in common with the Maine PBM law enacted in 2003 but recently repealed by the new Republican majority there. Unlike in Maine, though, PBM legislation has bipartisan support in most of the country, with Republicans and Democrats alike sponsoring the legislation.

Vermont is also considering PBM legislation, HB 674, posted here: http://www.leg.state.vt.us/docs/2012/Bills/Intro/H-674.pdf

Specialty Drug Costs Drive Legislation Capping Out of Pocket Insurance Costs

States across the country are considering legislation that would limit out of pocket costs for super-expensive specialty drugs for chronic diseases such as hemophilia, multiple sclerosis, and Crone's disease. These drugs can cost as much as $20,000 - $100,000 or more per year, and some insurance plans have started charging co-insurance of 50%. The experiences of patients can be very persuasive to legislators considering bills to cap such costs or otherwise regulate specialty tiers.

Pending legislation in Vermont, Senate Bill 221 which is sponsored by NLARx Board Vice Chairman Senator Kevin Mullin, would cap out of pocket prescription drug costs, including for specialty drugs, at $1,000 per insured individual and $2,000 per insured family. Vermont previously passed a moratorium on specialty drug tiers in insurance effective July 1, 2012 in order to give the Legislature time to consider a longer term solution to the issue.

Maine legislation, LD 1691, that would bar specialty drug tiers was amended in committee and voted out 9-4 in favor. The amended bill may still face an uphill battle on the floor. As amended, the bill would require specialty prescription drugs to be included within any cap on out of pocket spending in an insurance policy executed or renewed on or after January 1, 2013. The provision is similar to language in the Affordable Care Act that would become effective January 1, 2014. This and other legislation is being brought forward by the drug manufacturers; in the Maine instance by Pfizer, according to bill sponsor Rep. Stacy Fitts.

A bill analysis prepared last month by the nonpartisan legislative staff found that specialty tier legislation has also been enacted in New York (Chapter 536, NY Laws 2010), was killed in Maryland, and is pending in California (AB 310), Connecticut (Raised Bill 1084), Kansas (HB 2136), Nebraska (LB 1017) and Washington (HB 1876). Read the staff analysis here.

Read all of the NLARx February 29, 2012 Newsletter