Daily on Healthcare: Trump administration cuts Medicare payments for pricey new drugs

By | November 2, 2018

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Trump administration cuts Medicare payments for pricey new drugs. The Trump administration finalized a regulation Thursday that cuts the Medicare reimbursement for new cancer and other specialty drugs, which administration officials say could lower costs for seniors. The administration released on Thursday final regulations for doctor reimbursements under Medicare for 2019, including a proposal to cut payment amounts for new drugs covered under Medicare Part B, which reimburses doctors and hospitals for drugs administered in offices or facilities. “When we lower the cost that we are going to pay, that transfers to the patient,” said Centers for Medicare & Medicaid Services Administrator Seema Verma on a call with reporters. Currently under Medicare Part B, the federal government reimburses doctors or hospitals for the wholesale acquisition costs for new drugs, plus an extra 6 percent of those prices to cover storage and handling. But starting in 2019, Medicare will cut the reimbursement rate from 6 percent to 3 percent. Traditionally, Medicare reimburses doctors or hospitals the average sales price for reimbursement for Part B drugs, but it uses the wholesale cost for new drugs that have just launched.

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CMS also revamps paperwork requirements for docs. The agency included in the final regulation the first update in 20 years to requirements for codes that doctors have to enter to get Medicare reimbursement. The requirement is called “evaluation and management” and is the code that doctors have to enter for routine patient visits. The requirements haven’t been updated in 20 years and the new final rule addresses “longstanding issues,” CMS said. “Today’s rule offers immediate relief from onerous requirements that contribute to burnout in the medical profession and detract from patient care,” Verma said in a statement Thursday. “It also delays even more significant changes to give clinicians the time they need for implementation and provides time for us to continue to work with the medical community on this effort.”

Senior Trump administration drug pricing official dies.  Daniel Best, the health official overseeing the Trump administration’s efforts to lower drug costs, has died, the Department of Health and Human Services announced Thursday. “It is with tremendous sadness that I learned of the passing of our friend and colleague,” HHS Secretary Alex Azar said in a statement. “I had the great privilege to know Dan Best for the past decade. He joined me here at HHS out of a desire to serve the American people by making healthcare more affordable. He brought his deep expertise and passion to this task with great humility and collegiality. All of us who served with Dan at HHS and in the administration mourn his passing and extend our thoughts and prayers to his wife Lisa and the entire Best family at this difficult time.” The administration did not disclose a cause of death, and HHS said it did not have any additional comments. Best, a former CVS executive, joined HHS in March 2018 to work on drug pricing policies. Best had served as the corporate vice president of industry relations for CVS Health’s Medicare Part D business, and before that was at Pfizer Pharmaceuticals for 12 years. When Azar nominated him he said that he had the “deep experience necessary to design and enact reforms to lower the price of medicines that help Americans live healthier and longer lives.” Best’s job was to advise Azar on drug pricing reform issues.

Medicaid expansion ballot measure proponents hope to avoid what happened in Maine. Activists backing state ballot measures to expand Medicaid expressed confidence Thursday their state legislatures will implement the expansions if voters pass the measures, avoiding what happened in Maine, where the governor has fought implementation. Voters will go to the polls next week in three states to expand Medicaid for the first time — Utah, Nebraska, and Idaho — and Montana voters will decide whether to reauthorize the state’s expansion. “The sentiment has been among legislators and the governor that it is the will of people,” said RyLee Curtis, campaign manager of the pro-expansion group Utah Decides.

Curtis said that Utah should have a smoother path to getting an expansion implemented than Maine because the ballot measure includes a funding mechanism: A higher tax on non-food items in grocery stores. Curtis and other expansion organizers spoke with reporters during a Thursday call organized by the Fairness Project, a group that worked to add the expansion questions on the ballots. But neither Nebraska nor Idaho included measures for funding, meaning their state legislatures will have to enact revenue provisions. John McCollister, a member of Nebraska’s state legislature, said that legislators he has talked to are open to funding. The state’s governor, Republican Pete Ricketts, opposes expansion but has said he will not campaign against the measure. Idaho’s ballot measure also got a boost earlier this week when Republican Gov. Butch Otter said he supports expansion.

Bipartisan group of lawmakers target schemes drugmakers use to keep insulin prices high. A bipartisan group of U.S. representatives called Thursday for changes to the monopoly on sales for insulin drugmakers enjoy in an attempt to curb skyrocketing prices for the vital diabetes treatment. The report, released Thursday by Reps. Tom Reed, R-N.Y., and Diana Degette, D-Colo., also recommends requiring companies to disclose insulin prices and approving generic versions of insulin much faster. “The price of insulin has doubled since 2012, which follows a nearly 300 percent increase between 2002 and 2013,” the report said. Insulin makers have protected their brand-name formulations by a practice called “evergreening,” through which the company gets a new patent for a slight change to the formulation. The lawmakers also want brand-name insulin manufacturers to provide more proof that their new formula of insulin is actually a new breakthrough and would improve management of the disease.

Decision on controversial powerful opioid likely to come today. The Food and Drug Administration will likely deliver a decision Friday on whether to approve an extremely powerful opioid called Dsuvia that is 1,000 times more potent than morphine. Dsuvia would be administered in a medically supervised setting, but the patient advocacy group Public Citizen said in a statement on Thursday that people will learn to abuse it and die. The drug is five to 10 times more potent than fentanyl, which is a major contributor to the opioid epidemic due in part to illicit versions of the drug being shipped into the U.S.

An FDA advisory committee voted 10-3 to accept the approval of the drug, made by AcelRx Pharmaceuticals. However, the meeting took place without the committee chairman Dr. Raeford Brown, who couldn’t make it. Brown has since called for the FDA to not approve the medication because of its potential to generate addiction. Sen. Ed Markey, D-Mass., also called for the agency to nix the application. “Even in the midst of the worst drug crisis our nation has ever seen, the FDA once again is going out of its way to approve a new super-charged painkiller that would only worsen the opioid epidemic,” Markey said in a statement last month. The agency must make a decision on the product by Nov. 3, which falls on a Saturday and making the new deadline Friday.

This isn’t the first time the FDA has gotten in hot water for opioids. Markey and Sen. Joe Manchin, D-W.Va., heavily criticized the agency back in 2013 for approving the powerful opioid Zohydro. The senators criticized the agency for not requiring Zohydro to contain a formula that makes a drug harder to chew or snort, key ways that addicts employ to get a quicker high. The agency defended the approval, saying that the drug did not contain acetaminophen and so would ensure that patients wouldn’t be in danger of liver damage if they took it. The FDA later approved a version of Zohydro with the abuse-deterrent formulation back in 2015. Manchin and Markey even went so far as to vote against President Obama’s pick to lead the FDA, Dr. Robert Califf, back in 2015 in part over concerns over the Zohydro approval.

Apple, Amazon join fight against Trump rollback of transgender protections.  A coalition of U.S. businesses pushed back on Thursday against any effort by the Trump administration to remove civil rights protections for transgender people. Fifty-six companies, including Amazon, Apple, Google, American Airlines, and Dow Chemical, issued a statement opposing any policy that “violates the privacy rights of those that identify as transgender, gender non-binary, or intersex.” Speculation is mounting that Trump will seek to narrow the definition of gender, which would erase legal safeguards for such individuals. The coalition wrote that discrimination “imposes enormous productivity costs” and conflicts with the expansion of rights for transgender people across much of the business community.

Manchin to vote against West Virginia abortion amendment. Sen. Joe Manchin, D-W.Va., said during a debate Thursday that he will vote against a state constitutional amendment that would prevent state funding from covering abortion under Medicaid and say that nobody in the state has a constitutional right to an abortion. Manchin said the amendment does not include exceptions for the cases of rape, incest or to save the life of the  mother. “If those exclusions are not in there, it is not something that we should be voting on,” he said. His opponent, state attorney general Patrick Morrisey maintained that the amendment does have those exceptions.

FDA warns consumers about genetic tests to predict responses to certain medications. The FDA wants consumers to know that genetic tests marketed as predicting how you will respond to a certain medication aren’t approved by the agency. The agency sent out a warning on Thursday that said the tests haven’t been reviewed by the agency and “may not be supported by clinical evidence.”

Using a genetic test, for example, to gauge whether to use a certain antidepressant would be a mistake, the agency said. Such use of the tests “could lead to inappropriate treatment decisions and potentially serious health consequences for the patient.”


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FRIDAY | Nov. 2

House and Senate in recess until the Nov. 6 midterm elections.

Nov. 1-2. Health and Human Services advisory committee meeting on “Heritable Disorders

in Newborns and Children.” Agenda.

Nov. 1-2. Washington Marriott Georgetown. American Academy of Actuaries meeting and public policy forum. Details.

TUESDAY | Nov. 6

Election Day.

8:30 a.m. CVS Health to hold third-quarter earnings call. Details.