Rising Drug Costs

Welcome to this FDA/CMS Summit for Payers podcast.

Below is a teaser from our podcast with Bill Winkenwerder, Former CEO, Highmark Inc.

Access the complete podcast and transcript here.

How should manufacturers determine drug prices and what consideration should there be?

Bill: Well, certainly manufacturers need to recover their costs – their investment in R&D – and it’s important that they make a profit. Nobody can be in business for any period of time without being able to make a profit. Now, more recently – especially with respect to certain manufacturers that have brought very expensive medications to the market – have been criticized and have been identified as charging too much. That’s the common perception, but I see the immediate evidence that the prices for these medications – given the relatively small population of people that would benefit from them – that there is a serious over-charging that’s going on. But, certainly we need to sit down and talk and determine if there is a better way to arrive at the price. What is a fair price? What is a good, market-based price? That’s what this Conference is about.


To see more from Dr. Winkenwerder, download the complete podcast here.

Download the updated event brochure here. 

Bill will be joining us at the FDA/CMS Summit for Payers in Washington D.C. for his closing keynote address "An Industry Perspective: Payment Policy for Clinically Valuable But Very Expensive Pharmaceuticals" on Friday December 12th.

Register now to save an extra $100 off the current rate with the code XP1917BLOG.

See you in Washington D.C.

MDRP 2013 Track 3: State

This week we'll be featuring MDRP 2013 event posts from our content partners, Huron Life Sciences. Today's author, Sam Woronoff, recaps day 2 Track Session: State

A Panel of manufacturers and state representatives shared their thoughts on the recent online surveys were sent to states regarding how the states are validating the MDRP rebate claims data. Based on 32 states’ responses, the survey suggested that in regards to FFS claims data, majority of the state had confidence in their claims data validation process. However, when it comes to the MCO claims data, majority of the states responded that either no validation process was in place or had serious deficiency. As for the 340B claims, some states are relying strictly on voluntary disclosure from contract pharmacies participating in stock replacement as an only source for excluding claims. With the growing trend of MCO claims in MDRP and serious lack in states’ ability to validate the MCO claims data, the manufacturers need to be aware of this gap and be proactive in their invoice validation efforts.

Kudos for the MDRP Collaborative Workgroup for their efforts to create and standardize the electronic formats for claims level details (CLDs) and ROSI/ PQAS! Their efforts will accommodate both the manufacturers and the states to improve invoice validation and dispute resolution efforts, as well as efficiency in processing quarterly invoices! It was great to see the collaborative efforts of the manufacturers and states. Thank you guys!

To this date, the workgroup has developed a standardized CLD format as well as improving the electronic data file for ROSI/ PQAS. The standardized CLD format will be using common language for CLD data to decrease data manipulation, improve operational efficiencies, resource management and compliance control. In addition, they have included 340B indicators into the CLD format. The improved electronic ROSI/PQAS data file was created to minimize both manufacturer and the states’ manual efforts and speed up the rebate process and reduce operating costs. The proposed data file will include the EFT payment information as well.

The workgroup now needs manufacturer’s participation and assistance in pushing this effort into the next level by reviewing and providing feedback for the CLD and ROSI/PQAS data file drafts and reaching out to CMS directly to enforce the importance of this effort for the benefit of the entire MDRP rebate stakeholders.

For more information or to review the proposed CLD format, contact:

Stefano Paoloni Stefano.paoloni@dhs.state.nj.us 
Lynn Lewis llesix@us.imshealth.com  

One pharmaceutical manufacturer has shared their experience in implementing the Texas reporting process and their effort in overcoming challenges. They shared their stance and their methodology for addressing the timing issue, price change definition, and the price point determinations. For detailed information, reach out to IIR for a copy of Michael Hepburn’s presentation deck.

A representative from a leading manufacturer shared their vast insights and experiences in Medicaid Supplemental Contracting. There are many details and nuances in each state’s supplemental bids to understand and to consider. She has shared detailed tips and examples useful for manufacturers to refer to when completing a bid.

Also, some great tips and tools for disputing questionable utilization in Medicaid rebate invoices were shared today. Be sure to know your product, communicate readily with states, and be proactive for the effective dispute resolution process. States are just as eager as manufacturers to reach resolution. The industry is moving forward in the positive direction to work together to become more efficient and knowledgeable as well as resourceful. This track provided great insights and practical knowledge applicable to manufacturers involved in the day to day operation of MDRP.

MDRP 2010 Conference - New Strategies and Opportunities in Medicaid and Medicare Programs

Speaker:
Mary Kay Owens – Southeastern Consultants

As we look further into the new healthcare reform changes the only thing that is clear at this time is that things are very unclear.

One issue being the Take-Back (a.k.a. clawback) provision which is already in place. Will the states use the increase in the prescription volume from the MCOs to negotiate supplemental rebate increases in an effort to recapture the 8% Take-Back amount? Or will they be looking at other options that will help to make up for that “lost” money? In addition, it is uncertain if there will be new methods for calculating pharmacy capitation rates for MCOs.

The managed care end of the business will have various impacts due to the new regulations. Included, but certainly not limited to, being unable to capture existing rebates for the Commercial and Medicaid populations due to the decrease in prescription volume as the rebates shift to the stats.

There is confusion on the increase of the direct and administrative costs. Will the costs go up specifically due to all of the possible system edit changes that could be taking place? And will we see an increase in the renegotiating for those “other” covered population rebate contracts/agreements? One thing is certain; there is an increase in reporting requirements for the states coming down the line. This additional reporting burden will be placed on the staffs that are already faced with increased volumes and complicated cross population issues.

As for the industry there are many additional questions that are still up in the air. Will the new regulations affect the placement of products on not only the MCO formularies, but also the FFS PDLs? And if so, what will be the impact on administrative costs in tracking and working for that placement? Along those lines; how will the access to products be affected? Will there be more restrictions in those changes to placement, including but not limited to, policies for PAs, step therapies, and quantity limits that will be imposed by the state. Again, one thing is for certain; the industry will be seeing increases in costs attributable to the rebates and also in their administrative costs.

These scenarios (and no doubt several others) will be playing out in the next few months as companies/entities gain more understanding of the impacts on them. Be prepared by expecting some shifts to your “responsibility” relationships with other companies/entities in healthcare. I doubt that Newton had the healthcare industry in mind when he came up with his Third Law; but it is certainly true that with these reform actions being placed upon companies/entities, there will be equal and opposite reactions from them.