Lanton Law Speaks with Drug Topics on Its Over the Counter Podcast on MFN
Lanton Law speaks with Drug Topics on their podcast episode of Over the Counter. Ron discusses developing policy expected to enact significant change in the pharmacy industry and beyond titled “Most Favored Nation: Global Benchmarking to Reimagine US Drug Distribution.”
Ron Lanton of Lanton Law speaks with Drug Topics on their podcast episode of Over the Counter. Ron discusses developing policy expected to enact significant change in the pharmacy industry and beyond titled “Most Favored Nation: Global Benchmarking to Reimagine US Drug Distribution.” Click here to access the podcast.
House Passes Insulin Bill
The U.S. House of Representatives has passed the Affordable Insulin Now Act seen here.
The U.S. House of Representatives has passed the Affordable Insulin Now Act seen here. According to the bill’s summary this bill does the following:
Limits cost-sharing for insulin under private health insurance and the Medicare prescription drug benefit.
Caps cost-sharing under private health insurance for a month's supply of selected insulin products at $35 or 25% of a plan's negotiated price (after any price concessions), whichever is less, beginning in 2023.
Caps cost-sharing under the Medicare prescription drug benefit for a month's supply of covered insulin products at $35 beginning in 2023.
Currently, the Centers for Medicare & Medicaid Services is testing a voluntary model under the Medicare prescription drug benefit (the Part D Senior Savings Model) in which the copayment for a month's supply of insulin is capped at $35 through participating plans. The model is set to expire on December 31, 2025.
The bill also (1) further delays implementation of regulations relating to the treatment of certain Medicare prescription drug benefit rebates from drug manufacturers for purposes of federal anti-kickback laws, and (2) increases funding for the Medicare Improvement Fund.
The bill now goes to the Senate where 60 votes are needed to send it to the President.
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House Committee on Oversight and and Reform Releases Report on Drug Pricing
Last week Representative Maloney (D-NY) who is the Chairwoman of the Committee on Oversight and Reform released the final staff report, resulting from a multi-year investigation into drug pricing. The Committee investigation was originally started by the late Representative Cummings.
Last week Representative Maloney (D-NY) who is the Chairwoman of the Committee on Oversight and Reform released the final staff report, resulting from a multi-year investigation into drug pricing. The Committee investigation was originally started by the late Representative Cummings.
Here are a few findings from the report.
Drug companies aggressively raise prices to meet revenue targets, and executive compensation structures create incentives to raise prices. The companies in the Committee’s investigation collectively raised prices more than 250 times on the 12 drugs examined. The drugs in the Committee’s investigation are now priced at a median of almost 500% higher than when they were brought to market. The Committee ’s investigation revealed evidence that company executives made aggressive price increases to meet ever-increasing revenue targets and earnings goals. All ten companies have compensation structures that tie incentive payments to revenue and other financial targets, and several companies directly tied incentive compensation to drug-specific revenue targets.
Drug companies target the U.S. market for higher prices and use the Medicare program to boost revenue. Internal strategy documents show that drug companies targeted the U.S. market for price increases—while maintaining or lowering prices in the rest of the world—in part because Medicare cannot negotiate directly for lower prices. The Committee’s analysis found that taxpayers could have saved more than $25 billion over a five-year period for just seven of the drugs investigated—Humira, Imbruvica, Sensipar, Enbrel, Lantus, NovoLog, and Lyrica—if private Medicare Part D plans had obtained the same discounts as other federal health programs that are empowered to negotiate.
Drug companies abuse the patent system and FDA market exclusivities to suppress competition. Collectively, the companies in the Committee’s investigation have obtained more than 600 patents on the 12 drugs examined, which could potentially extend their monopoly periods to a combined total of nearly 300 years.
Drug companies use strategies to suppress competition and maintain monopoly pricing. Every company in the Committee’s investigation engaged in one or more strategies to suppress competition from generics or biosimilars. These strategies include what are often described as “life-cycle management” or “loss of exclusivity” strategies: (1) shifting patients to new products or formulations of a drug just before facing generic competition for the old formula (known as “product hopping” or “evergreening”); (2) pursuing contracts with PBMs and insurers that condition rebates and discounts on excluding competitor products; and (3) aggressively marketing directly to patients and physicians to drive sales, especially as drugs faced generic competition. The Committee’s investigation also uncovered new evidence of “shadow pricing,” a practice in which would-be competitor companies follow each other’s price increases.
Drug companies use patient assistance programs as a public relations tool to boost sales. The Committee’s investigation uncovered new evidence that companies emphasized the significant returns on investment from these programs in the form of increased sales, particularly for drugs approaching loss of exclusivity. Internal documents show that companies view these programs as an important public relations tool, but that companies’ spending on patient assistance programs is minimal compared to the enormous amount of revenue brought in by these drugs. These programs often do not provide sustainable support for patients and do not address the burden that the company’s pricing practices have placed on the U.S. health care system.
Research and manufacturing costs do not justify price increases. The Committee’s investigation found that companies’ investments in R&D are far outpaced by revenue gains. The investigation also found that even if the pharmaceutical industry collected less revenue due to pricing reforms, drug companies could maintain or even exceed their current R&D expenditures if they reduced spending on stock buybacks and dividends. From 2016 to 2020, the 14 leading drug companies spent $577 billion on stock buybacks and dividends—$56 billion more than they spent on R&D over the same period. In addition, companies dedicated a significant portion of their R&D expenditures to research intended to extend market monopolies, support the companies’ marketing strategies, and suppress competition.
Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Our healthcare and life science practice has been helping entities nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying efforts help stakeholders nationwide achieve improved business climates through carefully crafted legislation.
If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.
New Congressional Pharmacy Benefit Manager Bill Aimed at Spread Pricing Reintroduced
According to a December 1, 2021 press release, Representatives Carter (R-GA) and Gonzalez (D-TX) have reintroduced the Drug Price Transparency in Medicaid Act. The legislation “would limit the power of pharmacy benefit managers (PBMs) to artificially spike Medicaid drug prices. The Drug Price Transparency in Medicaid Act bans the use of spread pricing by middlemen (PBMs) in Medicaid managed care. PBMs drive up prescription drug costs without adding any value to the consumer.”
According to a December 1, 2021 press release, Representatives Carter (R-GA) and Gonzalez (D-TX) have reintroduced the Drug Price Transparency in Medicaid Act. The legislation “would limit the power of pharmacy benefit managers (PBMs) to artificially spike Medicaid drug prices. The Drug Price Transparency in Medicaid Act bans the use of spread pricing by middlemen (PBMs) in Medicaid managed care. PBMs drive up prescription drug costs without adding any value to the consumer.”
This legislation would help stop the under reimbursement that pharmacies are experiencing, while also helping to create much needed drug price transparency where Medicaid programs nationwide are concerned.
Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Our pharmacy practice has been helping pharmacies nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying efforts help pharmacies nationwide achieve improved business climates through carefully crafted legislation.
If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.
Oregon Proposes New Policy to Control Drug Prices
Drug prices have been fiercely debated in Congress and in various state capitols before COVID-19 brought everything to a halt. Vermont was the first state in the country to require pharmaceutical manufacturers to explain drug price increases. That initiative was followed by Maryland in 2019 as the state created its five member Prescription Drug Affordability Board to monitor prices. It seems now the attention is focused on Oregon.
Drug prices have been fiercely debated in Congress and in various state capitols before COVID-19 brought everything to a halt. Vermont was the first state in the country to require pharmaceutical manufacturers to explain drug price increases. That initiative was followed by Maryland in 2019 as the state created its five member Prescription Drug Affordability Board to monitor prices. It seems now the attention is focused on Oregon.
SB 844 proposes to establish a Prescription Drug Affordability Board in the Department of Consumer and Business Services to review prices for prescription drug products meeting specified cost criteria. Business Services will review prices for prescription drug products meeting specified cost criteria. The bill also requires the board to establish an upper payment limit for drugs that are or are expected to create affordability challenges for health systems and patients in Oregon or health inequities for communities of color.
An insurer, pharmacy benefit manager or other person that pays for or reimburses the cost of prescription drugs in this state may elect to opt out of the upper payment limit for specific drugs to allow the payer to negotiate with a manufacturer for the cost of the drug.
Additionally, the Prescription Drug Affordability Board shall annually assess fees to be paid by manufacturers that sell prescription drug products in this state. The fees shall be established in amounts necessary to meet the costs of the board. The fees shall be imposed based on a manufacturer’s share of gross revenue from sales of prescription drug products in this state.
Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current telemedicine landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.
New White House Drug Pricing Executive Order Released
On September 13, 2020, the Trump Administration released a new Executive Order (EO) targeting drug pricing.
On September 13, 2020, the Trump Administration released a new Executive Order (EO) targeting drug pricing. The EO directs the Secretary of HHS to implement a “Most Favored Nation” drug pricing program for Medicare Parts B and D. This policy relies on international price competition and seeks to provide Americans with the same lower prices for prescriptions that we see in other countries.
Drug pricing has been a major point of contention as manufacturers and insurer/pharmacy benefit managers exchange blame over why drug prices are rising. Drug pricing has been a major issue that had been getting Congressional scrutiny until COVID-19.
This issue will come back once a COVID-19 vaccine is available as there may be questions around the vaccine’s price. Additionally, once COVID-19 dies down, drug pricing for new therapies is expected to be front and center again.
Lanton Law is a national boutique law and government affairs firm that focuses on healthcare and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today!
White House Issues Executive Order Advocating for Importation
The White House has issued an Executive Order titled “Executive Order on Increasing Drug Importation to Lower Prices for American Patients,” which seeks to advocate for having supply chain entities proceed with importation.
The White House has issued an Executive Order titled “Executive Order on Increasing Drug Importation to Lower Prices for American Patients,” which seeks to advocate for having supply chain entities proceed with importation.
“One way to minimize international disparities in price is to increase the trade of prescription drugs between nations with lower prices and those with persistently higher ones. Over time, reducing trade barriers and increasing the exchange of drugs will likely result in lower prices for the country that is paying more for drugs. For example, in the European Union, a market characterized by price controls and significant barriers to entry, the parallel trade of drugs has existed for decades and has been estimated to reduce the price of certain drugs by up to 20 percent. Accordingly, my Administration supports the goal of safe importation of prescription drugs.”
The Executive Order gives stakeholders three methods to accomplish the goals of this order. Either allow reimportation of insulin products from Canada, finalize the December 2019 proposed rule addressing importation, or allow individuals to import drugs as long as the importation is designated by the Food & Drug Administration (FDA) as safe and results in lower costs to patients.
(a) facilitating grants to individuals of waivers of the prohibition of importation of prescription drugs, provided such importation poses no additional risk to public safety and results in lower costs to American patients, pursuant to section 804(j)(2) of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 384(j)(2);
(b) authorizing the re-importation of insulin products upon a finding by the Secretary that it is required for emergency medical care pursuant to section 801(d) of the FDCA, 21 U.S.C. 381(d); and
(c) completing the rulemaking process regarding the proposed rule to implement section 804(b) through (h) of the FDCA, 21 U.S.C. 384(b) through (h), to allow importation of certain prescription drugs from Canada.
Lanton Law is a national boutique law and government affairs firm that focuses on healthcare/life sciences, technology and finance. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.
The Administration Releases Executive Order Targeting Insulin and Injectable Epinephrine via 340B
The White House has announced a few Executive Orders targeting healthcare. One Executive Order titled Executive Order on Access to Affordable Life-saving Medications targets insulin and injectable epinephrine by requiring federally qualified community health centers to pass through 340B program discounts to patients using insulin and epinephrine auto-injectors.
The White House has announced a few Executive Orders targeting healthcare. One Executive Order titled Executive Order on Access to Affordable Life-saving Medications targets insulin and injectable epinephrine by requiring federally qualified community health centers to pass through 340B program discounts to patients using insulin and epinephrine auto-injectors.
Specifically the Executive Order outlines the following:
“It is the policy of the United States to enable Americans without access to affordable insulin and injectable epinephrine through commercial insurance or Federal programs, such as Medicare and Medicaid, to purchase these pharmaceuticals from an FQHC at a price that aligns with the cost at which the FQHC acquired the medication.
To the extent permitted by law, the Secretary of Health and Human Services shall take action to ensure future grants available under section 330(e) of the Public Health Service Act, as amended, 42 U.S.C. 254b(e), are conditioned upon FQHCs’ having established practices to make insulin and injectable epinephrine available at the discounted price paid by the FQHC grantee or sub-grantee under the 340B Prescription Drug Program (plus a minimal administration fee) to individuals with low incomes, as determined by the Secretary, who:
(a) have a high cost sharing requirement for either insulin or injectable epinephrine;
(b) have a high unmet deductible; or
(c) have no health care insurance.”
This will be interesting to see how this gets enforced. The 340B program which is where manufacturers provide outpatient drugs to eligible healthcare entities at a reduced price has been embroiled in controversy the last several years between manufacturers and hospitals over pricing. This Order does not address hospital practices.
Lanton Law is a national boutique law and government affairs firm that focuses on healthcare/life sciences, technology and finance. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.