Live from MDRP 2012: September 12, 2012

This week, we're live from Chicago reporting on the current trends and latest information that matters do the Medicaid Drug Rebate Program industry.  You'll find highlights from a few of the sessions in addition to the key tweets from the day.  To join monitor and join the conversation, be sure to reference #MDRP12.

OIG Work Updates

David Tawes, Department of Health and Human Services
Stephanie Yeager, Department of Health and Human Services
Edward Bailey, Department of Health and Human Services

One of the recently completed is the Affordable Care Act Expansion of the Rebate Requirement: Medicaid managed care organizations are required to report drug utilization data to Sates and States are required to collect rebates from manufacturers for drugs paid through MCO

Current Medicaid Drug Projects include:

• -Zero dollar URAs
• -State Experiences with Rebate Disputes
• -Federal Upper Limits under ACA
• -State MAC Programs
• -Supplemental

Ongoing Part B and D Drug Payments include:

• -Quarterly ASP-AMP Comparisons
• -Retail Pharmacies with Questionable Part D Billing

Ongoing Evaluations Involving Medicare Drugs:

• -Least costly alternative policies for certain prostate cancer drugs
• -Payments for DME Infusion Drugs
• -Potential rebates under Medicare Part B
• -Annual fee on brand drug manufacturers
• -Part D Payments for Drugs included in discount generic programs
• -Manufacturer copay coupons

OIG Work Plan will be coming out in October. But it is now based on reviews with requests from Congress and OIG management. Just because the OIG asks CMS to do something it doesn’t mean they have to do it. Medicaid Drugs in the works are updates in manufacturer AMP reporting, authorized generics an detail pharmacies discount generic drug programs. All reports are available at www.oig.hhs.gov.

Current Criminal and Civil Enforcement Activities to Improve Corporate Compliance
Marilyn May, US DOJ
Virginia Gibson, Hogan Lovells

Current issues include the over payments and their repayment as well as the  New Statue and Proposed Rule. What’s new? An overpayment that has been identified (identified: when you look for it and you find it, if someone else looks for it and finds it? What?) Proposed rule highlights: a person who has received an overpayment must report and return it within 60 days of identification. Meaning the CMS it will be implemented using current monetary process.

Large resolutions: GSK Global Settlement: Many criminal counts. Why is this decade of investigation so costly to the company? First time in a precaution that the company entered into a plea agreement with reporting obligations in addition to the corporate integrity agreement.

Plea vs Probation: Plea agreement makes GSK subject to the DOJ enforcement for violation of the compliance provisions in the plea agreement.

Legal Roundtable: Current Legal Trends Affecting Pharma Manufacturers
Constance Wilkinson, Epstein Becker Green
Sabrina Yohai, Pfizer
Steven Benz, Eli Lilly
Harvey Kaish, BMS

Government pricing is the cost driver than generator. It’s not always fully embraced by companies. What are the greatest challenges you face in making sure government pricing is important for the company. Benz: At one time, no one paid attention. How much do you really want people involved. Managing risks is building relationships with people. Lawyers do their thing and don’t really network. Important drive: how well you know that person. BMS: Pharma is not in the market to do price reporting, but in the market to market and sell their products. It’s important to have a formal process Thai allows a company to have visibility in their transactions. Lilly: If you look at ht GP team, it’s very detailed and it goes to the heart of the national healthcare issue.

Kaish says Government Programs should be involved upfront with certain programs. Formal documents such as SOPs when they relate to the government function. He also suggests cubinging, managed care systems and others are transactions that get missed.  Yohai thinks legal can help the GP team know what’s going on when and where. It’s a great way to catch the holes. Bent: The GP team should be told that they are like the lawyers. Pfizer: GP reality: Current filing and additional jobs. It's important to value the time and energy of the team members.

GP 3.0: From Reactive to Proactive
Richard Zimmerer, KPMG
Jeremy Docken, KPMG

Businesses find it difficult when a behavior needs to be changed in order to make them successful tomorrow. They point to Apple.  When they needed to, they developed the iPod which lead to other products that has lead it to the most successful company in the world.

GP is becoming a core strategic function. The walls between GP and Commercial is coming down. GP is a core function within an organization.

Pricing metrics management should understand the reimbursement landscape, establish objectives by price type, and evaluate tools and options. When you work to make your price calculations more understandable and responsive to the government, your calculations are more understandable.

How do you incentivize innovation:

• • Job rotation – financing/strategy/GP
• • Train everyone
• • Offer serious and smart prizes (Gate Foundation, Google, Netflix, Nasa)

Developing a Pricing Committee: Managing Government Program Risk
Michael Hepburn, Janssen Pharmaceuticals

What is a pricing committee?
It’s a governance body that provides oversite. They can be structured as a company sees fit.
A few parts of developing this committee:

• • Charter: Cover the scope of the pricing committee – franchise, company level. Hepburn believes the higher scope the better. Commercial and/or government contracts
• • Presentation requirements – develop standard template so that everything looks the same
• • Approval process
• • Documentation and Communications process – how does everybody get the information
• Membership and Roles and responsibilities. Who should participate? Sales/Marketing, Account Management,  Finance Rep, Contract admin rep, Healthcare compliance rep, Government Compliance •Rep, Legal rep, Gate keeper
• •Meeting frequency
• •Review process

Veterans Affairs Pricing Compliance and Management Updates
Mark Myers, Department of Veterans Affairs

There were 15 reports issued through September 15, 2012. There were $3.3 million in recoveries, with the average being $220,000.The number one thing they looked at was the treatment of new covered drugs and covered drugs purchased from another manufacturer.

For new cover drugs, you are required to develop the temporary FCP. The due date is within 45 days, the due date is 75 days after the launch. The Permanent FCB is based on just the first full quarter. Transferred covered drugs – when you buy it from another vendor, you must have it in the agreement that you get the data from them.


Payment and Service Delivery Reform in Medicaid
Michael Hales, State Medicaid Director Utah

In Utah, they have 75% of the population in four counties around Salt Lake City. 75% are enrolled in a healthplan. Medicaid drug programs are state and federally run, but the state determines how much the payment will be. Hospitals get close to the Medicare upper payment and physicians are closer to 75%. Hospitals get reimbursed better.

Goals focused on in Utah Healthcare Reform:

• -Target the areas of highest growth (inpatient and outpatient hospitalization)
• -Restructure reimbursement to pay for quality rather than billable events. They wanted to get away from volume outputs.
• -Incentives for collaboration. The hospital and physicians should have the same incentives as each other to provide better care for patients
• -Provide a risk-based methodology
• -Restructure cost sharing and provide new incentives to reward clients for personal efforts to maintain or improve their health
• -Keep the same funding in the system

What they developed:
Utah Medicaid ACO Model changes included meeting established standards, distribute payments across the spectrum of covered benefit providers, and additions to healthcare effectiveness and data information set, and specific quality targets  specific to to the state that it will develop.

Limited Pharmacy Benefit was allowed under the Affordable Care Act to have MCO Pharmacy Claims eligible for rebates. They are keeping the mental health drugs out of the physical health drugs in this. It will require the ACOs to exchange encounter data on what the ACO prescribes and dispenses in the network so that Utah can work out the rebates with the manufacturers.

Where can the state of Utah innovate? They restructure the reimbursement rates to the provider groups. They want to enhance the medical home concept – what does the patient need instead of reimbursement? And better care coordination among providers just to identify a few.

Timeline: Waver submitted on June 30, 2011, began content discussions with CMS on August 25, 2011, CMS decision in 2012 and scheduled implementation on January 1, 2013.