Medical Devices and Prescription Drug Policy

An insurance giant has signed on as the newest member of Washington's leading pharmaceutical benefit manager (PBM) lobbyist group.

Wellpoint, Inc., the Indianapolis-based insurer, will join the Pharmaceutical Care Management Association (PCMA), the groups announced Thursday.

"WellPoint has a unique role in the insurance market as the nation’s largest healthcare benefits company that also continues to maintain control over our formulary and clinical programs," Pete Clagett, a WellPoint vice president, said in a statement. "We look forward to working with PCMA to communicate with the news media, policymakers, and others the integral role PBMs play in lowering costs and enhancing access for consumers and payers."

PBMs act as middlemen, negotiating prices and processing claims between pharmacists, insurers and drug makers. The industry has been under the microscope in recent years over allegations that some PBMs overcharged for drugs and that others sought kickbacks from drug makers to favor their products.

In response, the new health reform bill requires PBMs operating under Medicare or exchange plans to disclose details about its price negotiations to the Health and Human Services Department. 

Mark Merritt, president and CEO of PCMA, welcomed the addition of Wellpoint on Thursday, saying the PBM model provides "workable prescription drug solutions for policymakers seeing to balance cost and access."

This post was updated at 5:30 p.m.

Reps. Michael McCaul (R-Texas) and Joe Sestak (D-Pa.) are hosting a panel of the nation's top cancer doctors next week for a Congressional Childhood Cancer Summit.

The Sept. 16 summit, to coincide with Childhood Cancer Awareness Week, is expected to address issues such as drug development, availability of treatment, access to clinical trials, survivorship and the impact of childhood cancer on families and communities. It also seeks to draw attention to several pieces of legislation currently stuck in Congress. 

Rep. Jackie Speier's (D-Calif.) Childhood Cancer Survivorship Research and Quality of Life Act creates National Institutes of Health grants to research cancer survivorship and improve follow-up care. And Sen. Sam Brownback's (R-Kan.) Creating Hope Act would reform the Food and Drug Administration's priority review voucher incentive program relating to tropical and rare pediatric diseases.

McCaul and Sestak are the founders and co-chairs of the Congressional Pediatric Cancer Caucus.

Genzyme Corp. this week snubbed an $18.5 billion buyout bid by Sanofi-Aventis, arguing that the offer grossly undervalues the Cambridge, Mass.-based biotech company — one of the largest in the world.

“The Genzyme board is not prepared to engage in merger negotiations with Sanofi based upon an opportunistic proposal with an unrealistic starting price that dramatically undervalues our company," Genzyme CEO Henri Termeer wrote to Sanofi Monday.

The $18.5 billion offer breaks down to about $69 per share. Citibank analysts estimate that Sanofi-Aventis would have to hike its offer to as high as $77 per share to entice Genzyme shareholders to support the deal, Bloomberg reported Tuesday. 

New rules surrounding Medicare's prescription drug benefit could force more than 3 million seniors to adopt different plans next year, according to an analysis by a leading healthcare group.

Republican critics of healthcare reform are already pointing to the report as evidence that the White House was disingenuous in its claims — heard often during the health reform debate — that consumers who like their plans can keep them.

At issue are new "meaningful differences" rules issued in April by the Centers for Medicare and Medicaid Services (CMS). Next year, under those guidelines, CMS will accept Part D bids only for plans that differ dramatically from other plans offered by the same company. 

As a result, "many Part D sponsors will have to reduce their plan offerings and potentially make changes to the benefit package and cost sharing in order to meet the new requirements and continue to offer multiple plan offerings," according to analysts at Avalere Health, a Washington-based healthcare consultant group.

Specifically, the group estimates:

• About 2.75 million seniors in basic Part D plans will have to choose a new plan next year because the new rules prevent sponsoring companies from offering more than one basic plan in any one region.

• About 350,000 seniors in enhanced Part D plans without gap coverage will be forced to shift into new enhanced plans — the result of new rules limiting companies to two enhanced plans per region.  

• An additional 645,000 beneficiaries in enhanced plans with some 2010 gap coverage "may" have to choose new plans in 2011, "depending on whether or not those enhanced plans meet the CMS definition of 'meaningfully different,'" Avalere writes.

The group was quick to note that its figures are approximate estimates, given that analysts didn't have access either to details about 2010 out-of-pocket costs or to information about 2011 plan offerings. 

"Given those limitations," Avalere said, "our estimates represent a conservative approximation of the potential impact of plan changes to meet the new requirements on beneficiaries." 

Still, the office of Rep. Dave Camp (Mich.), senior Republican on the Ways and Means Committee, shot out the analysis to reporters Wednesday.

Avalere's figures were based on an examination of Part D beneficiaries who, as of last February, were enrolled in standalone plans offered by the top 10 Part D sponsors.

Prescription drug prices for seniors jumped more than 8 percent last year — the steepest increase in the last six years, according to an analysis by AARP released Wednesday.

The cost of every one of the 25 most popular branded drugs among Medicare patients rose higher than inflation in 2009, according to AARP, the 50+ lobby. Of the 217 best-selling branded prescriptions among seniors, the group found, 211 saw retail price hikes exceeding general inflation.

On average, the retail price of those 217 drugs rose 8.3 percent last year — higher than the jump in any of the previous five years, which ranged from 6.0 percent to 7.9 percent, AARP said.  

“These are increases that hit the wallets of every American, whether through their own health care bills or the costs of programs like Medicare and Medicaid,” John Rother, AARP's executive vice president, said Wednesday in a statement.

AARP has long followed the cost trends in the prescription drug market, but this year's analysis marks the first time the group has focused on retail prices for consumers, rather than the cost to manufacturers to produce the drugs. 

The drug lobby has criticized past analyses, saying the manufacturers' price doesn't take into account the rebates the companies give to seniors at the drug counter. It won't be able to make the same argument this year, Rother said.

“For the first time, we know that brand name drug retail prices are growing just as quickly as manufacturer prices,” he said.

Among the notable price hikes, the cost of Flomax (0.4 mg capsules), the prostate drug, jumped 24.8 percent in 2009; Provigil (200 mg), which treats sleeping disorders, jumped 22.7 percent; and Prevacid (30 mg), a popular antacid, leapt 23.1 percent. 

"Unless something is done to bring down their skyrocketing price increases, life-saving medicines will be out of reach for too many.  The health care law made some progress by closing the Medicare doughnut hole, but Congress and the industry must bring more competition and transparency to the marketplace."

The pharmaceutical industry perennial ranks among the most profitable in the country. In 2008, instance, Forbes, drug companies reported profits of 19.3 percent relative to revenues — third highest among all industries, Forbes found. 

The Food and Drug Administration's approval on Friday of the emergency contraceptive Ulipristal — also known under the brand name ella — drew swift disapproval from Americans United for Life.

The drug, already sold in Europe, can prevent pregnancies up to five days after sex. Anti-abortion groups argue the drug causes abortions.

"The FDA's irresponsible approval of ella (Ulipristal), without adequate safety studies, places women's health and lives at risk," said Charmaine Yoest, President and CEO of Americans United for Life. "Furthermore, billing this abortion-causing drug as an 'emergency contraceptive' is misleading to the public."

Americans United for Life is part of a coalition, ella Causes Abortions, that signed a letter to Health and Human Services Kathleen Sebelius urging the FDA not to approve the drug.

Planned Parenthood, on the other hand, applauded the news and called ella "safe and effective at preventing ovulation and therefore pregnancy."

"Every woman deserves every option available to prevent an unplanned pregnancy, and there are many reasons why a woman may face the risk of unintended pregnancy — from failure or improper use of birth control, to sexual assault," said Cecile Richards, president of Planned Parenthood Federation of America. "The FDA’s approval of this new form of emergency contraception gives women one more option."

In approving Ulipristal, the FDA warned that "it is not intended for routine use as a contraceptive."

The drug ella will only be available by prescription.

The Food and Drug Administration (FDA) on Friday gave its stamp of approval to a controversial pill that prevents pregnancies up to five days after sex.

Available in Europe since May 2009, the so-called ella tablets should be used only as an emergency measure, the FDA said. 

"It is not intended for routine use as a contraceptive," the agency warned.

Plan B, which prevents pregnancies up to three days after sex, has been on the market for more than a decade (and available as an over-the-counter drug since 2006). 

The five-day pill, which has come under fire from anti-abortion activists, will be prescription-only.

A new study funded by the drug industry suggests congressional budget scorekeepers "significantly overstated" the savings from a proposed ban on "reverse payment" patent dispute settlements.

The preliminary economic analysis of the so-called "pay-for-delay" legislation limiting generic drugmakers' ability to accept money to settle patent disputes criticizes the CBO's methodology as well as a previous study by the Federal Trade Commission. In particular, the new study says both the CBO and the FTC were wrong to assume that banning reverse payments would speed up generic entry into the marketplace by 17 months.

"Under many circumstances, reverse payment patent settlements between branded and generic manufacturers can benefit competition and consumers," the study says, "particularly by averting continued litigation that may well delay generic entry substantially." Read more...

A group of bipartisan senators this week introduced legislation to entice drug makers to focus more intently on cures for uncommon children's diseases.

Sponsored by Sens. Sherrod Brown (D-Ohio), Sam Brownback (R-Kan.) and Al Franken (D-Minn.), the Creating Hope Act aims to solve a nagging problem inherent to the market-driven world of pharmaceutical manufacturing: how to encourage the creation of expensive-to-develop drugs that few patients need?

The lawmakers hope to do so by offering expedited FDA approval of potentially popular drugs to pharmaceutical companies that develop treatments for rare pediatric diseases. The idea is that the financial incentive associated with bringing "blockbuster" drugs to the market sooner will encourage companies to work harder researching the lesser needed treatments.

The proposal expands on a 2007 law that offers "priority review vouchers" to companies that develop new drugs for neglected tropical diseases. Drugs yielding vouchers, under the bill, must meet the definition of "rare" established by the Orphan Drug Act, and must not have previous approval from the FDA.

The bill would also prohibit companies from getting vouchers under the 2007 law for drugs already on the market abroad. Closing that loophole would force the companies to create new treatments, rather than simply bringing old ones to market in the U.S.

The National Institutes of Health estimates that there are more than 6,000 diseases qualifying as rare under the Orphan Drug Act, a vast majority of which get little or no drug company research money because the return on investment would be so small.

"We are falling woefully and inadequately short in our efforts to cure and treat rare and neglected pediatric diseases and conditions," Brown said in a statement announcing the bill. 

Kids' healthcare advocates agree. 

"This legislation aligns government and private sector interests and will be a major step forward in addressing the unmet needs of children with devastating illnesses, including life-threatening cancer," said Nancy Goodman, executive director of Kids v Cancer.

Children's hospitals say the new healthcare reform law inadvertently denies them drug discounts worth millions of dollars a year — and they want lawmakers to fix the problem they created.

Sen. Sherrod Brown (D-Ohio) is gathering signatures in a letter urging Majority Leader Harry Reid (D-Nev.) to make a technical correction to the new law "at the earliest opportunity." The House has already twice passed legislation that would amend the law.

At issue is the drug discount program for hospitals that serve low-income populations, known as 340B. The healthcare reform law enacted in March extends the program to cover more facilities, including free-standing cancer centers, critical access hospitals, rural referral centers and sole community hospitals.

Children's hospitals are also included in that list, but the National Association of Children's Hospitals says that's a mistake: Children's hospitals became eligible to participate in 340B starting in September 2009, months before healthcare reform was signed into law. That's an important distinction because certain drugs are excluded from the discount program for entities that were newly made eligible by the healthcare reform law.

The Reconciliation Act, signed in parallel with healthcare reform, exempts a class of pharmaceuticals known as orphan drugs from the discount program. These are drugs developed to treat rare medical conditions.

Children's hospitals say the orphan drug exemption should not apply to them, because they weren't added by the healthcare reform law.

"Children's hospitals use on a daily basis most of the 347 drugs that have received orphan drug status," Brown writes in the letter, obtained by The Hill. "The hospitals participating in the 340B drug discount program have achieved significant savings. They estimate that those savings would be reduced dramatically with the orphan drug exemption."

NACH says the loss of the orphan drug discount would cut children's hospitals' 340B savings by 50 percent to 90 percent. Without a fix, their only options would be to pay full price for the drugs or leave the 340B program in order to buy the drugs through a group purchasing organization.