Thursday, October 1, 2015

MDRP Summit: Day 1. Morning Sessions & Keynote Address

The first day of the conference kicked off today with Edward McAdam from Fresenius Medical Care discussing current events in the pharmaceutical industry, including recent price increases that have been covered by all of the media outlets.

The keynote address was from Ezra Klein, Editor-in-Chief of and the central theme was, “Where is healthcare going?” within the context of politics, reform, and policy. 

Mr. Klein first spoke about Zoltan Esteban who is running for President of the United States and is going around country in a bus shaped like a coffin. “He is the only candidate whose sole issue is to conquer death.” Looking at historical elections, oftentimes, topics that were important then now seem ridiculous. To Mr. Klein, that may be the case with our current situation. All of the conversations about things like immigration reform may be viewed by historians as a waste. Obamacare, one of the biggest pieces of legislation in this administration, has been experienced as a slow moving political “trauma” by both sides of the aisle. Republicans have not been able to repeal it and Democrats have lost the House over it. This law is here to stay, especially since the US Supreme Court has made rulings on issues before it, and the best anyone can do is to change it, but neither side is comfortable with it.  Unfortunately, the most recent round of healthcare reform has not focused on what’s probably most important and that’s value within the healthcare system. 

Most people today, including political candidates, agree that the focus of healthcare reform should be on controlling cost, not increasing access. To. Mr. Klein, the belief that the central concern should be about controlling cost, there is something wrong. It should be focused on providing value. Consider these 2 scenarios:

1.    The federal government passes a law that bans all healthcare. Spending drops to a negligible amount of GDP as a result, or,
2.    Researchers invent a pill that guarantees a life span of 180 years with a good quality of life, but doing so raises healthcare costs to 45% of GDP.

Virtually everyone can agree that Option 1 costs the least but the outcome is not desirable. Option 2 costs a lot more but the outcome is more preferable to society as a whole and probably to each individual. 

Instead of focusing on costs, the question should be, “Are we getting good value for our healthcare dollar spending?” Mr. Klein says no, we’re paying more to get less and the problem is in the value, not in the “abstract amount” of what we spend. In recent years, the growth in healthcare expenditures has been slowed but that’s been a result of making healthcare more expensive at the individual level through higher copays, deductibles, etc., and lowering the costs with the providers such as hospitals and drug companies and narrowing networks to enable insurance companies to be able to better negotiate rates. A tremendous amount of the focus currently is on increasing individual responsibility with regards to cost and making people more cognizant of their healthcare decisions.  These both lower cost at the government level but do nothing to improve healthcare

So what is good healthcare policy? The big “win” in healthcare is not dying, not getting an infection when you go to the hospital, finding a cure for Alzheimer’s. Very little spending occurs related to things such as research and cures, with more of an emphasis on treatment. Today, the most important thing in healthcare in Washington is not the care given as part of health but is the budget related to it.  This is true in other areas that include research and development – we will often not know the advancements and opportunities we missed. Viewing healthcare as a scientific issue, not a budget or social justice issue, is a different way of looking at it, and we don’t track how healthy we are and how healthy we could be. Many of the healthcare spending forecasts do not take into account the potential savings from investments in prevention and treatment. Sovaldi® is a good example. It was in the media when it first launched because of its high cost. It treats Hepatitis C and is an expensive drug but it’s cheaper than the ongoing treatment of someone with Hepatitis C. 

Chris Hatwig from Apexus, the company that handles the 340B Prime Vendor Program, next provided an overview of their services and then went through the Proposed Guidance recently issued. (See yesterday’s post for a lot more detail on this hot topic!) And next, although CMS was going to speak about recent updates, at the last minute, they were unable to make it, so Dave Tawes from the Office of Evaluation and Inspections, Office of the Inspector General, graciously stepped in and spoke about their recent initiatives and their work plan. This included information about recent Medicaid studies as well as an interesting study about the use of anti-psychotic drugs in children covered by Medicaid. In this study, 67% of the claims showed there was “quality of care” concerns, 53% poor monitoring, and other issues such as too many drugs being prescribed, the side effects, and the use of drugs not indicated for children.

Other topics included AMP reporting and a comparison of drug expenditures under Medicaid and Medicare Part D. Not surprisingly, drug costs under Medicaid are less than those under Part D. Also, the OIG reached a $12.64 million settlement with a manufacturer for misrepresenting ASP data to Medicare

The future work plan includes requests from Congress and HHS, mandatory OIG reviews, emerging issues such as price increases in the industry that made recent news, generic drug price increases, treatment of authorized generics, specialty drug pricing, audits of states’ collection of rebates for drugs from Medicaid MCOs, contractor oversight of covered uses for Part B drugs, and the spread for high cost drugs within the context of Part B and reimbursement.

Check back tomorrow for more updates from MDRP Summit and if you would like more information on any of these topics, please contact me. As always, there’s a lot going on in the government programs and I can help your organization figure out what is relevant and how to ensure you’re ready for an audit! Katie Lapins, Government Pricing Specialists, LLC, 303.993.6466,

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