September 6, 2023
Health Policy Report – Sept. 6, 2023
Biden Administration Announces List of Ten Drugs Subject to Medicare Negotiation
On August 29, the Biden administration announced the highly anticipated list of the first 10 Medicare Part D drugs that will be subject to price negotiations with Medicare. The medications – which treat diabetes, cancer, arthritis, and other conditions – are taken by millions of older Americans and are estimated to have cost Medicare $50.5 billion in gross spending from June 1, 2022 to May 31, 2022. The list includes the blood cancer drug Imbruvica, from AbbVie and Johnson & Johnson, which has a sticker price of $17,000 per month. The full list of selected drugs is as follows:
- Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill
The manufacturers of the 10 drugs have until October 1st to agree to price negotiations or alternatively, to pay a fine or withdraw their products from Medicare and Medicaid. Between October 1, 2023 and August 1, 2024, CMS will negotiate with the drug companies to determine a new, maximum fair price for the selected drugs. The maximum fair prices will be announced on September 1, 2024 and those prices will take effect on January 1, 2026.
The release of the list comes as AstraZeneca and Boehringer Ingelheim filed new lawsuits challenging the program’s price control measures, bringing the total count of lawsuits against the program to eight. Five of the lawsuits were filed by drugmakers with one or more drugs selected for price negotiation this year.
In response to the announcement, drugmakers and Republican lawmakers warned that the negotiation program may harm the government’s efforts to develop cancer therapeutics and other innovative products through the Cancer Moonshot. “The cancer moonshot will not succeed if this administration continues to dismantle the innovation rocket we need to get there. The harm will spread beyond cancer and impact people with rare diseases, mental health illnesses and other terrible diseases,” PhRMA wrote in a statement.
Similarly, Republican leadership on the House Ways & Means Committee, House Energy & Commerce Committee, and Senate Finance Committee wrote in a joint statement that the program will stifle innovation. “President Biden was quick to champion the Cancer Moonshot initiative, yet it is patients, like those who are battling cancer and rely on new and innovative treatments who will suffer the most,” stated House Energy & Commerce Committee Chair Rep. Cathy McMorris Rodgers (R-WA).
To read CMS’s press release, CLICK HERE.
To read a fact sheet on the initial drugs selected, CLICK HERE.
To read more about AstraZeneca and Boehringer Ingelheim’s lawsuits, CLICK HERE.
To read PhRMA’s statement, CLICK HERE.
To read the joint statement from Republican leadership, CLICK HERE.
The Network Sends Letter to Sponsors Supporting H.R. 3674
The Network recently sent a letter to Representatives Gus Bilirakis (R-FL-12), Tony Cardenas (D-CA-29), Greg Murphy, MD (R-NC-3), and Danny Davis (D-IL-7) in support of their bill the Providing Relief and Stability for Medicare Patients Act of 2023 (H.R. 3674), which would help mitigate continued payment cuts to radiation oncology and other community-based specialty services.
In its letter, The Network commended the lawmakers for introducing the legislation, noting that the bill will help preserve patient access to personalized cancer care treatment in freestanding radiation therapy centers. The Network highlighted that recent updates to clinical labor pricing have caused significant payment cuts to radiation oncology, hitting radiation oncologists practicing in freestanding radiation therapies particularly hard.
The Network further emphasized that these cuts exacerbate the existing payment disparity between the physician office setting and the hospital setting. This trend, combined with fiscal uncertainties driven by inflation and increased staffing costs, is jeopardizing the financial viability of office-based practices.
The Network highlighted that H.R. 3674 helps alleviate these concerns by providing an increase in non-facility practice relative value units for those procedures performed in an office setting. “Your legislation recognizes and values the use of advanced medical devices and medical equipment in the delivery of personalized cancer treatment,” The Network wrote.
To read The Network’s letter, CLICK HERE.
To read the text of H.R. 3674, the Providing Relief and Stability for Medicare Patients Act of 2023, CLICK HERE.
House Budget Committee Launches New Health Care Task Force
On August 25, House Budget Committee Chairman Jodey Arrington (R-TX) and Budget Committee Member Rep. Michael C. Burgess, MD (R-TX) announced the launch of a new Budget Committee Health Care Task Force. The focus of the Task Force is to identify policy solutions to reduce health care spending, modernize and personalize the healthcare system, fuel innovation and boost patient access to affordable, quality care. The Task Force plans on convening members from various committees as well as independent experts and stakeholders from across the health care sector to reform what’s broken and build on what’s working.
In an op-ed in The Hill, Chairman Arrington and Rep. Burgess highlighted how the government’s debt burden highlights the need to identify key drivers of rising health care costs.
“The Task Force is intended to serve as an incubator for finding new ways to improve health outcomes while reducing federal spending. We will serve as a forum for developing and modeling legislation to improve spending efficiency, returns on federal investments, and an overall more cost-effective health care system,” the lawmakers wrote. In addition, the lawmakers highlighted how increasing access to innovative care can offer more personalization, convenience, and lower prices for patients.
To read a press release announcing the Budget Committee Health Care Task Force, CLICK HERE.
To read the lawmakers’ op-ed in The Hill, CLICK HERE.
Scrutiny of 340B Pay Remedy Grows
According to a new study from Modern Healthcare, the Centers for Medicare and Medicaid Services’ (CMS) proposed 340B remedy payment will disproportionately benefit hospitals that provide less uncompensated care than other 340B hospitals.
In July, CMS issued a proposed repayment rule to remedy 340B underpayments to hospitals during the years 2018 to 2022. If finalized, CMS would pay more than 1,600 hospitals roughly $9 billion via lump-sum payments to offset reimbursement costs.
The study, conducted by healthcare economists and policy experts, reveals that the uncompensated care metric includes charity care and patients’ outstanding bills for care, but excludes hospitals’ Medicaid shortfall, or the difference between care expenses for Medicaid beneficiaries and reimbursement levels. Under this model, the hospitals that would receive the lowest remedy payments provided more uncompensated care as a percentage of their operating expenses. Hospitals that would receive at least $50 million in remedy payments dedicated an estimated media of 1.39% of their operating costs to uncompensated care. The researchers suggest that “the analysis shows that the 340B program has moved away from Congress’ original intent.”
The study comes as the American Hospital Association (AHA) recently submitted its comments on the proposed rule. While AHA backed the lump-sum repayment proposal, the organization warned the agencies that its plans to keep the proposed rule budget-neutral by recouping $7.8 billion through across the board cuts to hospitals.
“Recouping even more from hospitals would be fundamentally unfair because it would make them pay for two of the agency’s mistakes: the unlawful payment reductions that necessitate this remedy and the agency’s incorrect predictions from CY 2018 to CY 2022 under the prospective payment system,” AHA outlined. Instead, AHA recommended that CMS require hospitals to pay for drugs at average sales price +6%.
To read Modern Healthcare’s analysis, CLICK HERE.
To read CMS’s proposed 340B repayment rule, CLICK HERE.
To read AHA’s comment letter, CLICK HERE.
CMS Cancels Plan to Limit Breast Reconstruction Options
After pushback from doctors, patients, and advocacy groups, the Centers for Medicare & Medicaid Services (CMS) has scrapped a proposal that would have reduced reimbursement for deep inferior epigastric perforator (DIEP) flap surgery, a type of breast reconstruction operation. This procedure has potential benefits over implants and other types of breast reconstruction operations that take muscle from the abdomen, though it can be more costly.
Last year, CMS announced plans to eliminate a trio of HCPCS Level II codes that allowed doctors to collect more money for DIEP flap operations than other types of breast reconstruction. Doctors argued that this move would limit access by forcing patients to pay tens of thousands of dollars out-of-pocket. Advocates urged CMS to scrap the plan in a June hearing convened by the agency, while Rep. Debbie Wasserman Schultz (D-FL), Rep. James Comer (R-KY), Sen. Amy Klobuchar (D-MN), and Sen. Marsha Blackburn (R-TN) outlined their concerns with the proposed plan in a letter to CMS.
In an August 22 memo, CMS noted that it had released a “substantial number of responses” and asked regulators to keep the billing codes that reimburse doctors more for the surgery. Reps. Schultz and Comer and Sens. Klobuchar and Blackburn applauded the agency’s decision, which the lawmakers stated would protect patient choice and access.
To read more, CLICK HERE.
To read the lawmakers’ letter to CMS, CLICK HERE.
To read the memo from CMS, CLICK HERE.
To read the lawmakers’ press release, CLICK HERE.
ARPA-H Investing $24 Million in mRNA Platforms
On August 23, the Advanced Research Projects Agency for Health (ARPA-H) announced it would invest up to $24 million in research to develop mRNA platforms that can be used to prompt immune cells to fight cancer. The historic investment, which will be led by researchers at Emory University, helps advance President Biden’s Cancer Moonshot initiative to halve the U.S. cancer death rate by 2047.
Officially named “Curing the Uncurable via RNA-Encoded Immunogene Tuning” (CUREIT), the new program will invest in mRNA technologies that allow researchers to “turn on” helpful immune responses to attack tumors, as well as treat autoimmune disorders and infectious diseases.
CUREIT is the first award from the ARPA-H Open Broad Agency Announcement, which seeks transformative ideas for health research breakthroughs and technological advancements. The application period is open until March 2024 and future projects will be funded on a rolling basis.
To read the White House press release about the announcement, CLICK HERE.