Tag: Pharmacy

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Aduhelm could be a strain on Medicaid

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A new Alzheimer drug could add 7% to the overall Medicaid spending annual bill (not just drugs).

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

A vial and packaging for the drug Aduhelm. A previously announced investigation into Aduhelm, an expensive and unproven therapy, has sparked scrutiny since winning US approval last month.Associated Press

Biogen’s pricey new Alzheimer’s drug could cost Medicaid anywhere from $720 million to nearly $2.2 billion each year depending on the number of patients treated, according to a new analysis.

Aduhelm, which carries a $56,000 price tag, is generating concern over its potential impact on the overall health care system. The Centers for Medicare & Medicaid Services, for instance, is about to begin a process for determining whether Medicare will establish a national coverage policy for the Cambridge biotech’s drug, which is and won regulatory approval last month.

But the path taken toward approval was complicated and controversial, raising concerns about regulatory approval standards and the extent to which patients may actually benefit.

The budget-busting prospects were initially prompted when the Food and Drug Administration approved a so-called broad label, which suggested a large portion of the estimated 6 million Americans who have Alzheimer’s may seek treatment. Earlier this month, though, the FDA narrowed the scope of the label to patients with mild cognitive impairment or mild Alzheimer’s, the only patients studied by Biogen.

The drug maker believes this will lower the potential patient population to 1 million to 2 million people, most of whom are expected to be Medicare beneficiaries, since the Alzheimer’s population is largely age 65 and over. But if 500,000 people were treated with the medicine, Medicare would spend $29 billion annually, according to a recent Kaiser Family Foundation analysis.

But Medicaid ― which offers health insurance for low-income and disabled people ― is expected to spend much less, since about 67,000 beneficiaries used existing Alzheimer’s drugs, according to a new Kaiser analysis. If 25 percent of these beneficiaries switched to Aduhelm, the total cost would be approximately $720 million, with the states spending $230 million and the federal government covering $490 million.

Yet Medicaid would have to open its wallet further if 75 percent of those same beneficiaries switch to Aduhelm. If that were to happen, the cost to the program would be more than $2.1 billion, which is equal to seven percent of current Medicaid net spending. Under this scenario, states would spend $695 million and the federal share would be $1.47 billion.

Looked at another way, average state and federal spending per enrollee would reach $13,800 and $29,200, respectively. These figures, by the way, reflect mandatory 23.1 percent rebates that drug makers must offer Medicaid, although Kaiser acknowledged that costs may drop if higher rebates are paid or if fewer patients are treated.

For instance, the Medicaid and CHIP Payment and Access Commission, an agency that makes policy recommendations concerning Medicaid, recently proposed increasing minimum rebates for medicines approved under the FDA accelerated approval program Kaiser noted the Congressional Budget office assumed a 10 percent increase. Separately, the CBO found rebates for so-called specialty drugs were 29 percent of retail prices. Kaiser also noted that state Medicaid programs may use criteria to stem usage, which would lower the cost per person.

A recent analysis by the Institute for Clinical and Economic Review said that Aduhelm would only have sufficient value if it were priced between $3,000 and $8,400, which represents an 85 percent to 95 percent discount off the $56,000 list price, due to “insufficient” evidence that the drug benefits patients.

The cost concerns are only one aspect of an intensifying controversy over the drug.

Acting FDA commissioner Janet Woodcock has asked the Office of Inspector General at the Department of Health and Human Services to open an independent investigation into the recent approval. Some Congressional lawmakers and Public Citizen, the consumer advocacy group, have also called for the HHS OIG to investigate the events leading to the approval.

 
 

Clipped from: https://www.bostonglobe.com/2021/07/27/business/aduhelm-could-be-strain-medicaid/

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Mississippi is probing another Medicaid contractor over pharmacy benefits

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After getting a $55M payout from Centene, MS is thinking UHC/Optum may also be willing to make financial atonement for PBM gaffes.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

A member of the Senate Medicaid Committee reviews a Mississippi Division of Medicaid handout that reviews the managed care rule in this 2018 file photo. Mississippi officials recent reached a settlement with managed care provider Centene following an investigation into its billing practices.

Rogelio V. Solis | AP

JACKSON • Mississippi announced a $55 million settlement with its largest Medicaid contractor, Centene, last week related to allegations it was overcharging taxpayers for prescription drugs, but state authorities say they are not finished scrutinizing pharmacy benefit management practices at other companies that are paid with public money.

State Auditor Shad White told the Daily Journal last week that his office has been probing another Medicaid contractor, UnitedHealthcare, and its subsidiary, OptumRx, over pharmacy benefits. He declined to provide more details.

From 2016 to 2020, Mississippi’s Medicaid program paid $916 million for pharmacy benefit management services provided by OptumRx, according to agency data. OptumRx, a subsidiary of UnitedHealth Group, the fifth-largest company in the U.S., did not respond to a Daily Journal request for comment.

UnitedHealth and its PBM subsidiary are also facing investigations in other states, according to a recent report by The Wall Street Journal. And Ohio sued OptumRx in 2019, alleging the company bilked that state’s workers’ compensation program out of millions of dollars worth of generic drug discounts.

Meanwhile, the investigation into Centene and its subsidiary Envolve Pharmacy Solutions may be over after the recent settlement, but the mega corporation is apparently not finished doing business with the state. A Division of Medicaid spokesman said earlier this month the agency will exercise an optional one-year contract extension with Centene’s subsidiary Magnolia Health, as well as the state’s other two managed care providers, including UnitedHealthcare. New five-year managed contracts will be bid out by the state and begin next summer.

The three companies provide health insurance benefits for about 485,000 poor adults and children, disabled people, pregnant women, and others. They employ the pharmacy benefit managers as subcontractors to manage drug benefits, negotiate drug prices and reimburse pharmacists.

In the $55.5 million settlement agreement drawn up between Centene and Mississippi — in which Centene did not admit fault — the state had to acknowledge “Centene’s good faith and responsible corporate citizenship” by agreeing to settle. And it agreed that the company and its subsidiaries “have provided high quality pharmacy benefit services to the State and are qualified to continue to provide such services.”

Centene acknowledged it has an “obligation to comply with the requirements of Mississippi’s laws” as it delivers benefits for Medicaid patients going forward, and that the company will “provide full transparency” around its pharmacy benefit claims. Centene is set to pay the state in two installments, with some of the money going to attorney’s fees and the rest to compensate the Division of Medicaid.

Centene also will pay Ohio $88 million to settle a lawsuit alleging the company had inflated its pharmacy costs to the state in order to pad its profits. On top of the settlements with Mississippi and Ohio, the company has set aside another $1.1 billion for payments to 20 additional “affected states,” according to a U.S. Securities and Exchange Commission filing. It is negotiating with a pair of law firms that includes Ridgeland-based Liston & Deas to settle those states’ claims.

But neither Centene nor Mississippi officials have yet gone into detail about specific findings from the investigations into the company, including how much Centene may have cost taxpayers overall. White said the key finding from Mississippi — which was different than Ohio — was that Centene’s PBM had been billing the state for drugs at a higher price than its contract with the Division of Medicaid allowed.

Centene’s top executive only described the allegations in vague terms during a Wednesday call with shareholders, according to an Ohio Capital Journal report.

“The agreement addresses a situation from 2017 to 2018,” Michael Neidorff, the chairman, president and CEO of Centene, said of the settlement deals. “The policies and practices that created the situation were changed in 2019, making the matter very much a thing of the past. With this agreement, Centene will be able to put the situation behind us in a timely manner.”

Centene is the largest Medicaid managed care firm in the country, and the 24th-largest company overall. It brought in $111 billion in revenue last year. And this year, according to its Wednesday investor presentation, it expects to bring in more than $120 billion.

Rep. Becky Currie, R-Brookhaven, a nurse who serves on the House Medicaid Committee, said the state’s $55 million settlement with Centene is “ridiculous” and a “slap on the wrist, with nothing else happening to them, and a possible new contract.”

Currie, who has long raised concerns about the state’s Medicaid managed care system, said she was also disappointed that Centene did not admit fault in the deal.

“If I stole $55 million, how am I not at fault?” Currie asked. “If Becky Currie stole $55 million, I would be in jail. Somebody would (be).”

Currie said she doesn’t believe it’s smart for the state to extend Centene for another year, despite the company’s assurances of reform since 2017 and 2018.

She said she recently sent a letter to Gov. Tate Reeves and other state leaders urging them to take a careful approach as they bid out the next five-year managed care contracts. State officials, she said, need to provide more active oversight of the managed care firms.

Clipped from: https://www.djournal.com/news/state-news/mississippi-is-probing-another-medicaid-contractor-over-pharmacy-benefits/article_676e499e-3c9a-51b4-85c6-236e19ce2e7f.html

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Medicaid Spending on Hemophilia Therapies in US Tripled in 2005-19

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Medicaid Spending on hemophilia drugs is now at $1.7B per year, driven by the use of extended half-life therapies started in 2015.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

 
 

Spending on treatments for hemophilia by Medicaid, a U.S. government health insurance program for select groups, more than tripled from 2005 to 2019, an analysis reported.

Its researchers expect this finding will help state agencies with decisions regarding treatment coverage based on their Medicaid budget, given that the program “provides insurance coverage for approximately half of all US patients with hemophilia,” they wrote.

Results from this analysis were described in the research letter “Trends in the Use of Conventional and New Pharmaceuticals for Hemophilia Treatments Among Medicaid Enrollees, 2005-2020,” published in the journal JAMA Network Open.

Hemophilia is caused by mutations that lead to the lack of functional blood clotting proteins — factor VIII (FVIII) in type A, and factor IX (FIX) in type B. One of its standard treatments is replacement therapy, which involves administering a version of the missing clotting protein to patients. Bypassing agents, which can circumvent the need for clotting factor treatment, are another common therapy.

In recent decades, there have been substantial advances in how hemophilia is treated. Starting in 2014, extended half-life products, which are replacement therapies modified to last longer and so require less frequent dosing, became available. Hemlibra (emicizumab), an antibody-based treatment for hemophilia A, was also approved in 2018.

While these therapies have improved hemophilia care, they come at a high cost. According to the U.S.-based research team that authored this study, hemophilia is now “one of the most expensive medical conditions to manage.”

These researchers performed an analysis of Medicaid spending on hemophilia products in the U.S. from 2005 to 2020. Medicaid provides free or low-cost health coverage to qualifying low-income individuals, families and children, pregnant women, the elderly, and people with certain disabilities.

Findings showed a steady increase in the use of standard half-life replacement therapies prior to 2015. Then, after extended half-life products became available, the use of these standard therapies dropped substantially — by 66% for FVIII and by 57% for FIX. The use of bypassing agents also decreased by 69% from 2017 to 2019.

In 2005, Medicaid spending on hemophilia treatments totaled $521 million. By 2019, spending had more than tripled, to $1.57 billion.

Between these years, spending on FVIII products more than doubled (from $330 million in 2005 to $779 million in 2019), and spending on FIX products more than quadrupled (from $52 million in 2005 to $238 million in 2019).

“The transition of factors VIII and IX from plasma-derived to recombinant pharmaceuticals, the transition from [standard to extended half-life] pharmaceuticals, and the use of bypassing agents and emicizumab have contributed to the transformation of hemophilia from a disease of significant morbidity to a condition that allows affected individuals to lead active lives,” the researchers wrote. “However, these advances have increased costs substantially.”

As of 2019, FVIII products accounted for 50% of all Medicaid spending on hemophilia treatments. FIX products accounted for 15%, bypassing agents for 17%, and Hemlibra for 19% of total spending.

Researchers noted these findings may be useful for states determining their Medicaid budgets. According to the investigators, these findings are particularly relevant since gene therapies for hemophilia are expected to become available in the near future, and state agencies will have to make coverage decisions.

Gene therapies work to deliver a non-mutated version of the defective gene to patients’ cells, thereby restoring the production of the functional clotting factor they are missing.

“These gene therapies, which will cost between $2 to $3 million per patient, have the potential to decrease requirements for factor replacement dramatically,” the researchers wrote.

Clipped from: https://hemophilianewstoday.com/2021/06/16/medicaid-spending-us-hemophilia-treatments-tripled-2005-2019-analysis/

 
 

 
 

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CMS Proposes Delays to Major Regulations Affecting Medicaid Rebates

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CMS is delaying rollout of value based rx arrangement to give itself and states more time to implement required data collection systems.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

On May 28, 2021, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule to delay the effective dates of two amendments to the Medicaid Drug Rebate Program (MDRP) related to manufacturer reporting of multiple best prices for drugs when offered as part of a value-based purchasing (VBP) arrangement and inclusion of U.S. territories in the MDRP. CMS is requesting public comment on the proposed effective date delays by June 28, 2021.

Delay of Effective Date for Reporting Multiple Best Prices for VBP Arrangements

CMS proposes to delay for six months the January 1, 2022 effective date for the provisions addressing manufacturer reporting of multiple best prices connected to a VBP arrangement. CMS’ primary stated reason for the proposed delay is to provide more time for CMS, states, and manufacturers to make the complex system changes necessary to implement the new best price and VBP program and assure patient access and quality of care, given the current need to devote resources to the public health emergency (PHE) relating to COVID-19 and the significant expansion of Medicaid under the American Rescue Plan Act of 2021 (ARP).

In proposing this delay, CMS acknowledges that it needs more time to ensure that its own technology infrastructure will be ready to receive multiple best prices related to VBP arrangements. CMS is developing a new Medicaid Drug Program (MDP) system to replace its current system but does not believe it will be ready by January 1, 2022 to operationalize the VBP program.

In addition, CMS stated that State Medicaid agencies need more time to develop capabilities and build an infrastructure that will be able to implement VBP arrangements. Specifically, State Medicaid agencies must develop and implement systems and methods to track beneficiaries and their outcomes, retrieve and evaluate the patient-specific outcomes data, and secure the cooperation of providers and beneficiaries to enter into some of the more complex outcome-based arrangements offered by pharmaceutical manufacturers. CMS stated, without citing evidence, that a reason for the delay was that manufacturer resources were likely diverted away from the implementation of VBP arrangements due to researching, producing, and distributing COVID-19 drugs and vaccines. Some stakeholders were puzzled by this explanation, however, as VBP arrangements continue to be actively pursued, and no manufacturer has publicly called for a delay in implementation of this provision.

Accordingly, CMS believes that July 1, 2022 is a more realistic target date for implementation of the VBP multiple best price program. CMS also stated that it expects to issue additional guidance before July 1, 2022 on operational and policy aspects of the new VBP program, including specifications relating to beneficiary protections.

Delay of Inclusion Date for U.S. Territories in the MDRP

CMS also proposes to delay the April 1, 2022 effective date of inclusion for U.S. territories (American Samoa, Northern Mariana Islands, Guam, Puerto Rico, and the Virgin Islands) in the definitions of “States” and “United States” for purposes of the MDRP to April 1, 2024. However, if public comments indicate readiness to include territories in the MDRP, CMS proposes to finalize an inclusion date that may be earlier than April 1, 2024, but not before January 1, 2023.

The MDRP regulatory definitions of “States” and “United States” were originally amended to include the U.S. territories by the Covered Outpatient Drug Final Rule (February 1, 2016), with a delayed inclusion date of April 1, 2017. Subsequently, CMS issued two interim final rules to further delay the inclusion date for the U.S. territories in the regulatory definitions of ”States” and ”United States” to April 1, 2022 based on discussions with the territories on preparedness to join the MDRP and concerns related to manufacturers potentially increasing drug prices to avoid setting new Medicaid best prices.

CMS is again proposing to delay the inclusion date of U.S. territories in the MDRP for substantially the same reasons, namely that territory resources should prioritize demands arising from the PHE and expansion of Medicaid under ARP to address beneficiary needs during COVID-19.

 
 

Clipped from: https://www.lexology.com/library/detail.aspx?g=0e6295c3-87b2-4b31-808c-45b32e29c521

 
 

 
 

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PhRMA files federal lawsuit to get rid of controversial Medicaid drug rebate rule

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A pharma industry association is asking a judge to not include copay assistance to patients in the “best price” calculation used in Medicaid rebate programs.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

Drugmakers are going to court to overturn a rule that requires them to include copay assistance into Medicaid drug rebate amounts. (zimmytws/GettyImages)

The pharmaceutical industry wants a federal judge to ditch a controversial rule that requires drugmakers to factor copay assistance and discounts into rebates offered to Medicaid.

The Pharmaceutical Research and Manufacturers of America (PhRMA), a top pharma lobbying group, sued the Department of Health and Human Services in the U.S. District Court for the District of Columbia on May 21 over the rule finalized back in December 2020. The lawsuit claims that the rule directly contradicts federal law surrounding Medicaid rebates.

“CMS’ final rule contradicts the plain text of the Medicaid rebate statute by improperly requiring manufacturers to treat financial assistance that they provide to patients to help defray their co-pays and other out-of-pocket costs as part of the ‘price’ a manufacturer offers to commercial insurers,” the lawsuit said.

If the lawsuit is successful, it will roll back an effort by the Trump administration to target assistance such as copay cards that the agency has said does not fully help patients. The rule does not go into effect until Jan. 1, 2023.

The rule touched on a major battle between insurers and pharmacy benefit managers (PBMs) and the drug industry.

Drugmakers that want Medicaid coverage of their products must agree to provide those drugs at the same costs as those given to commercial purchasers. Manufacturers agree to pay rebates to the states to make up the difference.

RELATED: MACPAC calls for Congress to eliminate the drug rebate cap

The program requires manufacturers to report to states the “best price” of a drug that is calculated based on the lowest price available to a wholesaler, retailer or provider and the average manufacturer sales price, which is the average price paid to wholesalers and retail pharmacies. The rebate for brand-name drugs is based on the difference between the best price and average manufacturer price for a product. A generic drug rebate is based on 13% of an average manufacturer price.

But the rule now makes clear that copay assistance cards and other cost-sharing assistance offered by the drugmaker must be counted in the best price calculation.

“This change will help ensure that when patients use a copayment assistance card provided by a drug manufacturer, the value is passed through to the patient’s deductible or cost-sharing obligation in full, as opposed to offsetting what the health insurance company would have to normally reimburse the pharmacy,” according to a CMS press release from December on the final rule.

The rule also comes as insurers and PBMs have adopted copay accumulator programs that limit the impact of a manufacturer’s assistance on a patient’s deductible or out-of-pocket cost limit.

The pharmaceutical industry argues the accumulator programs seek to undermine patient assistance tools, while the PBM industry counters the programs could cause patients to choose more expensive drugs over cheaper options and increase healthcare costs for employers.

RELATED: Insurers worry drug companies could game changes to Medicaid rebate program in new rule

PhRMA argued in the legal filing that the rule directly contradicts the best price text in the Medicaid rebate program’s statute.

The law defines the best price as the lowest price made available to any “wholesaler, retailer, provider, health maintenance organization, nonprofit entity or governmental entity within the United States.”

But drugmaker assistance is not part of the price available to any of those purchasers, PhRMA argued.

“Manufacturer assistance to patients is not part of the ‘price’ available from the manufacturer to any best-price-eligible purchaser, with or without an accumulator adjustment program,” the lawsuit said. “Accumulator adjustment programs deploy only after a drug has been paid for and dispensed and diverts the assistance that the manufacturer provided to the patient, against the manufacturer’s will and often without its knowledge.”

The Centers for Medicare & Medicaid Services did not immediately return a request for comment on the lawsuit.

Clipped from: https://www.fiercehealthcare.com/payer/phrma-files-federal-lawsuit-to-get-rid-controversial-medicaid-drug-rebate-rule

 
 

 
 

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What are the key differences between Medicaid and other payer spaces from a pharmaceutical manufacturer perspective?

Many of our clients are pharmaceutical industry professionals working to increase access for Medicaid members to drugs, devices and therapies. These clients include manufacturers, PBMs and other organization types. The article below is based on our experience working with professionals who have successfully navigated this space. Concepts have been simplified for clarity.

Reading time: 7 minutes

Intended Reader: Pharmaceutical manufacturer sales executives and marketing teams

Key Topics: The state by state nature of Medicaid programs, How PBMs are different in Medicaid, Variation across P&T committees

  The State-by-state Nature of Medicaid Programs

If you’ve seen one Medicaid program, you’ve seen one Medicaid program.

One of the first differences pharmaceutical professionals notice is the uniqueness of each state Medicaid program. While there are national dynamics in play with some of the larger rebate programs, each state has a large degree of control over its coverage and reimbursement policies.  

The main variables for a given state market include:

  1. Fee-for-Service– How does the state handle drug coverage for members who are not in a managed care plan? Are some drugs covered under FFS but others are not?
  2. Managed Care– What responsibility and authority do health plans operating in the state have for pharmacy benefits? For plans that are part of national brands, how centralized are those decisions?
  3. Collaborative Care Models– In recent years, some states have implemented these models. In these models, benefit decisions are often made by a board. Examples include CCOs in CO and WA.

State laws and regulations– Each state will have a different set of regulations on how coverage decisions are made, benefit categories products will be assigned to, and how marketing and communications can be done for members about pharmaceutical benefits.

Use of Pharmacy Benefit Managers  in the HHS Space

The role of PBMs in Medicaid is different

While pharmacy benefit managers (PBMs) are not unique to the Medicaid payer space, recent trends have shown the importance of understanding the impact the state government context has on PBM activities.

There are 3 key considerations for manufacturers evaluating the role of PBMs in Medicaid:

  1. The PBMs goal of conserving public funds– Since Medicaid is funded with both federal and state tax dollars, spending on pharmacy has a high degree of visibility. This is most apparent during the annual budget process in a given state. There is generally more scrutiny on PBM activities in the Medicaid space because of the ongoing need to show cost savings with public funds.
  2. The expanded scope of PBMs in the Medicaid space– Compared to PBMs in other payer spaces, Medicaid PBMs often take on extensive program management scope, including clinical drug reviews for states to inform decision-making (i.e., states outsourcing some P&T-type functions to PBMs).  Medicaid PBMs also negotiate Medicaid supplemental rebates.
  3. Recent concerns around transparency – While states have increased reliance on PBM services in recent years, there has also been some scale-back in certain state markets. This retraction is largely over spread pricing issues. There is a renewed call for transparency in PBM operations, and a new political focus on contracts.

Variation in  Structure and Operation of P&T Committees 

There are some similarities across states, but P&T operations vary widely

Federal law requires each state to have a P&T committee if the state wants to operate a Preferred Drug List (PDL). Each state must include physicians and pharmacists on the committee- but beyond this general requirement, each state can set its own procedures and schedules for the activities and decisions of the committee.

While states must cover any drugs on the federal Medicaid rebate program, coverage for other drugs is up to each state (or health plan if the state has delegated this to managed care). There has been a trend towards adopting more uniform PDLs for specific drug classes (in 2018, 14 state Medicaid programs had a uniform PDL)[1]. Some states have also moved towards streamlining medical neccessity criteria with uniform clinical protocols.[2]

While these trends toward standardization have been observed, wide variation by states is the norm.

Some states require utilization controls (such as prior authorization) for all new drugs before a P&T committee develops specific rules. Some states have rapid evaluation processes, but others have extensive protocols that can include pilots, meta-analyses and extensive expert review. These processes range from three months to one year for consideration of new drugs or newer / improved coverage for an existing drug. Like all things government, there is a political nature to the coverage and pricing in many Medicaid pharmacy programs that needs to be taken into account when addressing market access issues in a given state. In many states, the level of influence that the independent pharmacists association exerts can be the difference between coverage, or limited coverage with extensive controls. The role of advocacy organizations whose populations are impacted by your product is also often significant.

How You Can Address the Challenges and Complexities of the State Medicaid Pharmaceutical Environment

Besides your own research into this topic, there are a few key tactics that can help you overcome some of the common challenges related to improving market access in Medicaid markets. We assist clients with each of these strategies, and are happy to have a conversation anytime. If our services and expertise are a fit for your needs as you develop or execute your strategy, engaging with us is a simple process. If we are not the right fit, we are happy to make a referral to another firm who may be.

  1. Train your account teams on the details of each state Medicaid program they call on. Knowing the fundamentals of each state program is critical. Most teams used to the commercial space are initially unaware of this need in Medicaid, and then quickly become overwhelmed by the learning curve.
  2. Ensure your sales decks and messaging are aligned with the unique values and priorities in the Medicaid payer space. Telling the right story to a Medicaid audience is completely different than the normal narrative for commercial and Medicare Advantage audiences. Your sales collateral needs to account for the unique needs and perspectives of Medicaid program decision makers.  
  3. Evaluate what your traditional government affairs approach can and cannot do to help in the Medicaid space. Many manufacturers have a government affairs presence in multiple states. However, traditional government affairs approaches are often insufficient because of the complexity of players, advocates, and the economics of Medicaid financing.
  4. Set realistic expectations of timelines in your sales planning– Increasing access for a drug in the Medicaid space can take years. While the volume of members in the Medicaid space can drive significant revenues, there is usually a significant time investment, sometimes multiple years, before favorable coverage policies are fully realized. If you do not set appropriate expectations internally, you will create disruption and confusion in your sales organization.

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State files lawsuit, alleging company stole millions in Medicaid payments

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The OG AG continues their efforts to sue Centene, et al around spread pricing issues. Centene says the AG fails to understands complex and critical issues in the case.

 
 

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

 
 

COLUMBUS, Ohio — The Ohio attorney general is accusing a trio of companies of stealing tens of millions of dollars in Medicaid payments.

Dave Yost teamed up with the Ohio Dept. of Medicaid to file the lawsuit in Franklin County Common Pleas Court back on March 11. At the time, it was filed under seal. Thursday night, it was unsealed.

The lawsuit names the Centene Corporation, Buckeye Health Plan and Envolve Pharmacy Solutions.

The complaint includes three counts and is 22 pages. Add in the exhibits, and the lawsuit exceeds 250 pages.

The state is alleging the companies broke Ohio’s Medicaid laws, breached their contract and conspired to steal money via their involvement in the Medicaid system. And the suit alleges those violations amount to tens of millions of dollars in unlawfully obtained Medicare payments.

Centene is accused of filing for reimbursement for payments that had already been made by third parties, failing to disclose the true cost of pharmacy services and inflating pharmacy dispensing fees.

The plaintiffs are asking for thousands of dollars in relief, including three times the payments wrongfully obtained. The suit also is seeking to terminate the companies’ contracts, which would amount to huge losses in revenue for them.

The defendants did make a filing in response, also asking for the case to be unsealed.

The filing said the complain reflects a “misunderstanding of the admittedly complex world of Medicaid accounting and billing” in which the companies operate. It also asserted that the plaintiffs ignored the contractual requirements to provide “timely written notification” of any alleged violation to make every reasonable effort to resolve the dispute. Instead, the defendants’ filing states the lawsuit was filed without consulting or notifying the company.

10TV reached out to attorneys for the state and the AG’s office. Yost was unavailable, so his office directed 10TV back to a previous press release issued on the date of the initial filing.

“Centene’s actions are deeply concerning and have a direct effect on the most vulnerable Ohioans,” Yost said in that release. “Centene has broken trust with the state of Ohio, and I intend to hold this company accountable for its deceptive practices.”

10TV also reached out to attorneys for the defendants and was directed back to Centene. 10TV made contact but has not yet heard back from the company.

 
 

Clipped from: https://www.10tv.com/article/news/local/ohio/state-files-lawsuit-alleging-company-stole-millions-in-medicaid-payments/530-893951af-0fdf-462e-8c3f-99463df43239

 
 

 
 

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Drug Manufacturers Face Elimination of Medicaid Rebate Cap Beginning in 2024

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The Medicaid drug rebate cap is set to go away in 3 years.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

Recently, President Joe Biden signed the American Rescue Plan Act of 2021 (the Rescue Plan), a $1.9 trillion COVID-19 relief package. We described a number of the provisions of the Rescue Plan here. The relief package includes a “sunset” provision that, effective January 1, 2024, would eliminate the statutory cap on Medicaid Drug Rebate Program (MDRP) rebate amounts by terminating Section 1927(c)(2)(D) of the Social Security Act (SSA). That provision, added by the Affordable Care Act (ACA) in 2010,1 capped MDRP rebate liability at 100% of the average manufacturer price (AMP) for a covered outpatient drug.2 Under the Rescue Plan, MDRP rebates will no longer be capped. As a result, there will no longer be a statutory limitation on the MDRP rebate amounts drug manufacturers pay to state Medicaid programs beginning in 2024.3 Accordingly, a drug manufacturer may pay more in rebates than it receives on the sale of the product. 

Discussion of removing the MDRP rebate amount cap gained national attention when the Department of Health and Human Services (HHS) included it in its May 2018 HHS Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs (Blueprint).4 HHS asked for stakeholder input regarding when the rebate cap was “a valid constraint upon the rebates manufacturers should pay” and the potential impact of removing the cap.5 Subsequently, the Medicaid and CHIP Payment and Access Commission (MACPAC) — a nonpartisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress and other policymakers6 — addressed the question of potentially raising or removing the cap.7 In June 2019, for instance, MACPAC issued a report to Congress officially recommending that Congress amend Section 1927(c)(2)(D) of the SSA to remove the cap on MDRP rebates.8  

In its June 2019 report, MACPAC argued that removing the rebate cap would incentivize drug manufacturers to lower list prices and limit price increases on drugs.9 The report noted that the Congressional Budget Office (CBO) estimated that removing the rebate cap would decrease federal spending by $15 billion to $20 billion over 10 years.10 Similarly, in scoring the Rescue Plan, CBO estimated that the provision eliminating the cap would save the federal government approximately $15.9 billion over a 10-year period.11

Following MACPAC’s June 2019 recommendation, the House and the Senate each took up potential legislation on the rebate cap. In September 2019, Sen. Chuck Grassley, R-Iowa, introduced a bill that would raise the cap to 125% of AMP effective for rebate periods beginning October 1, 2022.12 In September 2019, Rep. Frank Pallone, D-N.J., introduced the Elijah E. Cummings Lower Drug Costs Now Act, HR 3, which included a provision to eliminate the rebate cap.13 Following negotiation, however, the House dropped that provision from HR 3 and left SSA Section 1927(c)(2)(D) unaltered in the House’s final version of the bill.14 That bill passed the House but did not advance in the Senate. Elimination of the rebate cap, however, influenced by these initial developments, became law under the Rescue Plan and will now take effect on January 1, 2024.

Drug manufacturers participating in the MDRP and other stakeholders should carefully evaluate the potential impact and future application of this Rescue Plan provision. This and other developments, including the changes in additional rebates for line extensions, which are reported on here, are expected to lead manufacturers to consider changes in their marketing of some drug products. 

1 Patient Protection and Affordable Care Act § 2501(e), Pub. L. No. 111-148, 124 Stat. 119, 309 (2010).

2 SSA § 1927(c)(2)(D) (Maximum Rebate Amount).

3 S. Amend. 891, 117th Cong. § 9816 (2021) (amending American Rescue Plan Act of 2021, HR 1319, 117th Cong. § 3106 (2021)). The Senate version of the bill — which later passed in the House and was signed by the President — amended the effective date of the rebate cap elimination in the original House passed bill from 2023 to 2024.

4 83 Fed. Reg. 22,692, 22,698 (May 16, 2018). 

5
Id. 

6 See About MACPAC, www.macpac.gov/about-macpac/ (accessed Mar. 17, 2021).

7 See MACPAC, September 2018 Meeting Transcript at 219–45 (Sept. 18, 2018), available at www.macpac.gov/wp-content/uploads/2018/09/September-2018-Meeting-Transcript.pdf; MACPAC, March 2019 Meeting Transcript at 4–19 (Mar. 7, 2019), available at www.macpac.gov/wp-content/uploads/2018/03/March-2019-Meeting-Transcript.pdf. 

8 MACPAC, Report to Congress on Medicaid and CHIP at 2 (June 2019), www.macpac.gov/wp-content/uploads/2019/06/Next-Steps-in-Improving-Medicaid-Prescription-Drug-Policy.pdf.

9
Id. at 3. 

10 Id. at 10.

11 Cong. Budget Off., Cost Estimate; Reconciliation Recommendations of the House Committee on Energy and Commerce (Feb. 12, 2021), available at www.cbo.gov/system/files/2021-02/EnergyandCommerceReconciliationEstimate.pdf.
12 S.R. Rep. No. 116–120, at 48 (2019), available at www.congress.gov/116/crpt/srpt120/CRPT-116srpt120.pdf.

13 165 Cong. Rec. No. H10178, available at www.congress.gov/116/crec/2019/12/12/CREC-2019-12-12-pt1-PgH10129.pdf.
14 Elijah E. Cummings Lower Drug Costs Now Act, HR 3, 116th Cong. (2019), available at www.congress.gov/bill/116th-congress/house-bill/3/text.

 
 

Clipped from: https://www.sidley.com/en/insights/newsupdates/2021/04/drug-manufacturers-face-elimination-of-medicaid-rebate-cap-beginning-in-2024

 
 

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Mississippi Medicaid officials investigate Centene’s pharmacy payments

MM Curator summary

 
 

Mississippi is investigating Centene for similar issues in the OH-Centene lawsuit.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

The Mississippi Division of Medicaid is investigating Centene subsidiary Magnolia Health to determine whether it used subcontractors to misrepresent pharmacy costs, the Northeast Mississippi Daily Journal reported March 23.

The state attorney general’s office hired outside attorneys to investigate the matter and potentially pursue claims, as misrepresenting pharmacy costs could have resulted in millions of dollars in overpayments by Mississippi’s Medicaid department, according to the Daily Journal.

Magnolia Health and two other contractors manage health insurance benefits for about 480,000 Mississippians who are a part of the state’s Medicaid managed care system, and the state’s Medicaid department pays the companies a set rate per patient.

Mississippi’s investigation is similar to an Ohio probe announced March 11 by the state’s attorney general, Dave Yost. He filed a lawsuit against Centene claiming the company’s subsidiary, Buckeye Health Plan, used a web of subcontractors to misrepresent pharmacy costs.

Magnolia Health uses at least two companies (Envolve Pharmacy Solutions and RxAdvance) to get medications to Medicaid beneficiaries, according to the Daily Journal.

 
 

Clipped from: https://www.beckershospitalreview.com/pharmacy/mississippi-medicaid-officials-investigate-centene-s-pharmacy-payments.html

 
 

 
 

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Tennessee’s Medicaid Waiver For A Closed Drug Formulary Could Be A Trendsetter

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The TN waiver is the first to allow states to exclude drugs from its formulary in order to get additional financial benefits from preferred manufacturers.

 
 

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

 
 

Former U.S. Supreme Court Justice Louis Brandeis popularized the phrase “laboratories of democracy” to describe how a “state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Within the federalist framework, state and local governments have some degree of autonomy to act as social “laboratories,” where policies can be created and tested at the state or local level. These experiments in policymaking can be confined to one state or locale, or spread to others, depending on their popularity.

And so it goes with Medicaid. In January of this year, Tennessee became the first state in the nation to obtain permission from the Centers for Medicare and Medicaid Services (CMS) to adopt a closed formulary for outpatient prescription drugs.

A closed formulary offers Tennessee’s Medicaid agency more leverage to negotiate supplemental rebates directly with drug manufacturers. In the meantime, the state will continue to receive statutorily mandated Medicaid drug rebates. Other states will monitor what’s happening in Tennessee closely, and may follow suit.

The Medicaid program is run jointly by the federal and state governments, with each state administering its own Medicaid program, subject to federal oversight. The federal government also contributes more than 50% of the program’s costs.

Adopting a closed formulary enables Tennessee to exclude medications from coverage provided they include at least one drug per therapeutic class on the formulary. As a result, this does diminish patients’ access to the full panoply of prescription drugs, and could have a negative impact on health outcomes. There will be exceptions to the rule. Tennessee Medicaid must cover “all or substantially all” of the drugs required to be covered under the Medicare Part D protected classes policy. The six classes are antidepressants, anticonvulsants, antipsychotics, immunosuppressants, antineoplastics, and antiretroviral drugs. And, the state is obligated to institute an appeals and exceptions process, so that patients may apply for access to non-covered drugs.

For years, state Medicaid agencies and Medicaid managed care companies have wanted to be able to utilize the prescription drug management tools common in both the commercial sector and Medicare Part D. This includes closed formularies.

But, until now state Medicaid agencies have been thwarted in their attempts to establish closed formularies. In June 2019, for example, CMS rejected an application submitted by the Massachusetts state Medicaid agency to obtain a waiver to adopt a closed formulary. At the time, this would have been a first for Medicaid.

Besides closed formularies, other methods of cost containment have proven less difficult to pursue. This includes the use of bulk purchasing power. As soon as he assumed office in January 2019, California’s governor, Gavin Newsom, promised to execute a series of changes to the state’s healthcare system, including granting the Medi-Cal – California’s Medicaid agency – direct negotiating power with drug makers with respect to the prices of certain drugs prescribed to Medicaid beneficiaries. Enacted in January 2021, Newsom’s executive order directs Medi-Cal to establish bulk-purchasing arrangements for “high-priority drugs.” Simultaneously, the state will take control of the pharmacy benefit for all 13 million Medi-Cal beneficiaries — the vast majority of whom previously had their prescription drug benefit administered by Medicaid managed care plans and pharmacy benefit managers.

However, California’s capacity to drive down prescription drug prices will depend on the degree to which the Medicaid preferred list can be a de facto closed formulary. Without the ability to exclude drugs, California’s negotiating leverage is limited.

Other states have been active in creative ways to contain drug costs. For example, in July of 2019, Louisiana’s Medicaid state agency embraced a subscription model, colloquially called the “Netflix model,” for provision and purchase of hepatitis C treatments. In principle, this model implies that the state pays a subscription fee to procure a supply of hepatitis C medications. Here, the supply is however many pills are necessary to treat patients diagnosed with hepatitis C. Louisiana, however, adopted a modified version of the subscription model, in which the state pays a fixed price per treatment up to a certain maximum rather than a lump sum payment to the drug maker. After reaching that cap, Louisiana will receive additional treatments at no cost through the end of 2024.

Several states are pursuing prescription drug payment reform. In 2018, Oklahoma became the first state Medicaid program to implement a value-based pricing initiative, linking payments to a drug’s impact on health outcomes. Oklahoma signed value-based contracts for four drugs: Two long-acting atypical antipsychotics, aripiprazole lauroxil (Aristada) and paliperidone (Invega Trinza); an antibiotic for skin infections, oritavancin (Orbativ); and the epilepsy drug, perampanel (Fycompa). Other states, including Colorado, Massachusetts, and Michigan have laid the groundwork for similar outcomes-based pricing arrangements.

At the state level, novel payment models and methods for Medicaid prescription drug cost containment are gaining traction. In Tennessee’s Medicaid program, the closed formulary is becoming a reality. Other states may decide to follow Tennessee’s lead. Success of the initiative will be measured in terms of the state’s ability to keep a lid on costs, and by whether harm is done to patients by reducing the extent of their access to prescription drugs.

 
 

Clipped from: https://www.forbes.com/sites/joshuacohen/2021/03/03/tennessees-medicaid-waiver-for-a-closed-drug-formulary-could-be-a-trendsetter/?sh=1182b11d5f5b