DCMedical News: Tuesday, October 16, 2018
DCMedical News
Washington, D.C.
Tuesday, October 16, 2018
DCMedical News is published every day either the House or the Senate is in session. See schedule session at the bottom of this newsletter. To ensure continued receipt of your copy please subscribe.
THE BIG STORY TODAY IN HEALTH CARE
Price Transparency in 2019: This Will Only Hurt a Little: Prices for drugs are in the news, prices for hospital services coming along.
The Department of Health and Human Services proposed a new rule (here) “amending the Medicare Parts A, B, C and D programs, as well as the Medicaid program, to require direct-to-consumer (DTC) television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost (WAC, or ‘list price’) of that drug or biological product.” The first seven pages of the proposed rule—to be published in Thursday’s Federal Register—discuss HHS’ view of the marketplace for drugs in America, a fascinating “case statement” for price disclosure, especially in broadcast advertising, in which the Supreme Court (Red Lion Broadcasting Company v. FCC) has “recognized that the government may take special steps to help ensure that viewers receive appropriate information.” HHS also published a two page guide to the advertising rule, here.
The rest of the argument (from the proposed rule): “First, in the commercial market, over 40% of beneficiaries are in high deductible plans. Under such plans, beneficiaries pay the full list price of the product until they meet their deductible, which can be thousands of dollars. Second, benefit designs are built off of list price, because the negotiated rebate rate is not paid until months after the product was dispensed. Third, co-insurance has become a standard payor mechanism applicable to high cost drugs, requiring the patient to pay a percentage of the list price. All of the top 10 PDPs [pre-paid drug plans] use coinsurance rather than fixed dollar copayments for medications on nonpreferred drug tiers, charging 30 percent to 50 percent of each prescription’s full price in 2017. Finally, very few drugs have coverage on all the formularies in the country. If a plan does not cover a particular drug requested by a patient, then the patient may have to pay the full list price to access the medication.”
Prices are also supposed to be published for hospitals, beginning in 2019. The final rule for the Hospital Inpatient Prospective Payment System for 2019 (here) calls for price transparency, specifically, the publication by hospitals of “machine readable” “standard charges” on the internet. The regulations “require hospitals to make available a list of their current standard charges via the Internet in a machine readable format and to update this information at least annually or more often as appropriate. This could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.” (See pgs. 2136-2137 of the rule.)
New York-Presbyterian was recently the target of a “price comparison,” paid for by a union, the latter unhappy with high charges paid for hospital services for its members under its union-managed benefit plan. The full-page ad in Crain’s New York Business (here) unfavorably compares the price of a hip replacement at NYP Hospital to “Other New York hospitals,” and illustrates that hospitals may not be the only parties advertising hospital prices.
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
The Massachusetts Health Policy Commission Begins a Two Day “Hearing” on Health Costs: The annual event (agenda here, “health trend cost book” here) features highly structured input from payers (here) and providers (here), as well as panel discussions on issues such as the November ballot referendum on nurse staffing.
DRUGS AND DEVICES
Political Contributions Mirror Challenges of Political Research Payments: Recent stories concerning Memorial Sloan Kettering (here and here) highlight the potential controversy when clinical researchers have corporate ties. In the most recent article (here) in a series undertaken by The New York Times and ProPublica, Dr. Jedd Wolchok, with 31 corporate ties, was a target.
In the same spirit of disclosure, campaign contributions from political action committees to members of congressional committees responding to the opioid crisis was the subject of a “research letter” in JAMA (here). Researchers studied the four firms that distribute opioids (AmerisourceBergen, Cardinal Health, McKesson, and Miami-Luken) and 9 firms that manufacture and market opioids (Allergan, Depomed, Endo, Insy, Janssen, Mylan, Mallinckrodt, Purdue and Teva). Ten of these 13 firms were associated with a total of 12 PACs (Political Action Committees) that made campaign contributions to members of congressional committees involved in the opioid legislation. Some 89% of the Members of the House Energy & Commerce Committee received campaign contributions from one or more of the PACs, with a median amount of $18,500. In the Senate HELP Committee, two-thirds of the 23 members received a similar contribution. The study involved a single election cycle and did not include individual or Super-PAC contributions, only those PACs specifically sponsored by the companies involved.
United Healthcare Seeks CMS Price Determination on CAR-T: Dr. Peter Bach (Memorial Sloan Kettering) writes in The New England Journal of Medicine (here) about CAR-T therapy payment. Dr. Bach writes that “The two approved CAR-T therapies have boxed warnings regarding serious side effects, and each costs about $400,000.” Ancillary costs are estimated to be an additional $33,000 to ten times that amount. Dr. Bach notes that United Healthcare has requested CMS to perform a National Coverage Analysis of CAR-T therapy. He notes that “United argued that implementing a single coverage policy for CAR-T therapy across Medicare would level the financial playing field for competing [Medicare Advantage] plans and ensure equal access.” While CMS has traditionally interpreted its responsibility (under the Medicare statute) to cover all services that are “reasonable and necessary,” Dr. Bach writes that “in recent years, as the costs of treatments have increased, CMS has adopted an approach to coverage determination that takes a stricter view of the evidence.” One possibility would be for CMS to solicit bids from competing manufacturers, as it does for durable medical equipment, and as it has engaged a contractor to do for Part B drugs under the so-called Competitive Acquisition Program. Another alternative would be to consolidate billing for CAR-T therapies into a single code, to foster price competition, a possible strategy recently highlighted by MedPAC.
Drug and Device Lobbies Weigh in on Utah Supreme Court Case: Worried about a potential legal precedent, AdvaMed, PhRMA and others filed amicus briefs (here and here) in a Utah Supreme Court case concerning liability protection. A key question is whether FDA approval of a device (in this case hip implants) protects a manufacturer from liability claims related to design defects.
EVENTS & MEETINGS
Oct. 16
9:30 a.m., U.S. Chamber of Commerce seventh annual Health Care Summit, press invited at 202-463-5682.
1:30-2:45 p.m., Potential Midterm Election Implications for Health Care, Alliance for Health Policy Webinar, for information contact Ann Nguyen at anguyen@allhealthpolicy.org.
Oct. 18
3:00-4:40 p.m., CMS Administrator Seema Verma at Brookings on Medicare Part D, followed by a panel (Kavita Patel, Samuel Nussbaum and others).
Information at: https://www.brookings.edu/events/a-conversation-with-seema-verma/
Oct. 19
12:00-1:30 p.m. (lunch at 11:30 a.m.), Flexibility and Innovation in Medicaid, Congressional Briefing, Alliance for Health Policy, for information contact Ann Nguyen at anguyen@allhealthpolicy.org.
Oct. 24
9:00-10:15 a.m., Health Policy in the Polls, Reporter Breakfast, Alliance for Health Policy, for information contact Ann Nguyen at anguyen@allhealthpolicy.org.
Oct. 25
1:00 to 5:00, “Top Minds,” Chernew, Dafny and more, “Disrupting the Health Care Landscape: New Roles for Familiar Players,” NEJM Catalyst webinar, https://join.catalyst.nejm.org/events.
Nov. 8
Through Nov. 13, 2018 AMA Interim Meeting, Gaylord Convention Center, National Harbor, Maryland
Dec. 4
9:00 a.m., CMS sponsors a “Town Hall” meeting “to discuss fiscal year (FY) 2020 applications for add-on payments for new medical services and technologies under the hospital inpatient prospective payment system (IPPS). Registration required by 11-19-2018, Federal Register notice here.
FOR REFERENCE
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
October publications dates: 17, 18, 19, 22, 23, 24, 25, 26
November publication dates: 13, 14, 15, 16, 26, 27, 28, 29, 30
December publication dates: 3, 4, 5, 6, 7, 10, 11, 12, 13, 14
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com