memo - National Association of Medicaid Directors
Transcription
memo - National Association of Medicaid Directors
To: From: Date: Re: All Medicaid Directors NAMD staff May 18, 2015 Update on “21st Century Cures” legislation On April 29th, the House Energy and Commerce Committee (E&C) released a second discussion draft of its 21st Century Cures legislation. 1 A third draft with a summary was released on May 13, and was marked up by the E&C Subcommittee on Health on May 14. The subcommittee unanimously voted to move the legislation to the full committee, which will conduct its mark up on May 19. This memo provides an overview of the changes to these drafts that may be of most interest to states. NAMD staff will continue to update Directors as developments warrant. Background The 21st Century Cures Initiative represents over a year of bipartisan work by E&C Chairman Fred Upton (R-MI) and Representative Diana DeGette (D-CO). However, the first legislative draft to emerge from this process included several provisions of concern to Directors. NAMD called attention to these issues in our letter to Congress in April. The April 29th discussion draft includes substantial revisions and was released on a bipartisan basis. Many of the earlier provisions of concern to NAMD are not included in the second draft, while other provisions primarily related to enhanced funding and easing administrative burdens on the National Institutes of Health (NIH) have been added. The new draft is overall narrower in scope than its previous version, though the presence of several placeholder sections preserves the opportunity for significant modifications as negotiations continue. The Senate is also pursuing legislation aimed at speeding the biomedical innovation process, though its work is narrower in scope than the House’s efforts. Senator Lamar Alexander (RTN), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee Subcommittee on Health, worked with Senator Richard Burr (R-NC) to release a report identifying opportunities to speed the FDA’s drug review processes in January. Senator 1 The full text of the second draft is available on E&C’s website here and a section-by-section summary is available here. 444 North Capitol Street, Suite 524 ▪ Washington, DC 20001 ▪ Phone: 202.403.8620 ▪ www.medicaiddirectors.org Alexander is also working on a bipartisan basis with Senator Patty Murray (D-WA) to convene a workgroup and hold hearings on biomedical innovation throughout the year. Offsets In order to offset the costs associated with this legislation, E&C has looked to various prescription drug policies to find savings. The committee has displayed particular interest in certain Medicaid drug rebate program proposals offered in the President’s FY 2016 budget. NAMD has developed a separate memo for congressional staff to provide feedback on these proposals, which is available upon request by states. Timeline The House E&C Subcommittee on Health is scheduled to hold a mark-up of the third draft May 14th, with a goal of bringing the legislation to the House floor in June. The Senate HELP Committee is on a more deliberate path, having just launched its workgroup this year. Both chambers will continue to work on these issues, but it is unlikely they will reach agreement on a bicameral basis this year. Detailed Changes in the Second and Third Drafts The enclosed chart details changes made from the first to the second draft for those provisions of interest among Directors. Overarching changes of note are as follows: Many provisions regarding accelerated drug approval pathways with lower evidentiary standards, as well as new or extended drug exclusivity categories, were removed. o However, the dormant therapy exclusivity provisions may reemerge in a current placeholder section as Congressional negotiations continue. Priority review of new medical devices remains, but accelerated approval with lower evidentiary standards was removed. A new provision, Section 2101, will make certain health care economic information collected by the FDA available to “a payor, formulary committee, or other similar entity in the course of…carrying out its responsibilities for the selection of drugs for managed care or other similar organizations.” A new provision, Section 2102, requires the FDA to issue guidance on proper communication of scientifically and medically sound off-label uses of drugs. A new provision, Section 3101, creates a Medicare Pharmaceutical and Technology Ombudsman to review that program’s coverage decisions, which may impact state spending on the dually eligible. Page 2 of 16 A pharmacy lock-in program for controlled substances in Medicare Part D remains in the draft. January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft Changes in Discussion Drafts, April 29 and May 13, 2015 NEW PROVISION: Sec. 2101, “Facilitating Dissemination of Health Care Economic Information.” Adds “payors, formulary committees, or their similar entities” to the list of organizations with which the FDA must share certain healthcare economic information in the course of its drug approval process. The provision is intended to assist in drug coverage policy development. NEW PROVISION: Sec. 2102, “Facilitating Responsible Communication of Scientific and Medical Developments.” Requires the FDA to, within 18 months of the legislation’s passage, issue guidance on facilitating the dissemination of “responsible, truthful, and non-misleading scientific and medical information not included on the label of drugs.” NEW PROVISION: Sec. 2152, “Reauthorization of Rare Pediatric Disease Priority Review Voucher Incentive Program.” Page 3 of 16 January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft Changes in Discussion Drafts, April 29 and May 13, 2015 Reauthorizes a program which rewards a manufacturer of an orphan drug for pediatric populations with a voucher granting priority FDA review of another product of the manufacturer’s choice. These vouchers may be sold to another manufacturer. NEW PROVISION: Sec. 3101, “Medicare Pharmaceutical and Technology Ombudsman.” Creates an ombudsman for Medicare pharmacy and technology coverage policies. Responsible for receiving complaints and grievances from manufacturers regarding Medicare coverage and payment decisions. Sec. 1041 – Approval of Breakthrough Therapies Allows the FDA to approve a drug, for a disease/condition with unmet medical need, that has received “breakthrough therapy” designation based on early stage clinical safety/effectiveness data that provides sufficient evidence under In effect, this provision lowers the evidentiary standards for this drug class. Shorter FDA review times combined with increased FDA authority to require further studies after approval, rather than settling safety issues before approval, may contribute to increased rates of patient safety risks, drug withdrawals, and black box warnings. Page 4 of 16 This new approval pathway is removed entirely. In its place is Subtitle E, “Expediting Patient Access.” Sec. 2081 – Sense of Congress indicates Congress would like the FDA to continue approving breakthrough drugs under the existing breakthrough pathway as quickly as possible. January 2015 Discussion Draft Provisions current safety and efficacy standards Allows HHS to require post-market assessment of the drug, with ability to withdraw approval if assessment is not conducted, drug is found unsafe and/or ineffective, or manufacturer uses false or misleading marketing NAMD Staff Comments on Discussion Draft Sec. 1063 – Election to Convey a Portion of Extended Exclusivity Period Applicable to Qualified Infectious Disease Products Extends exclusivity periods for “qualified Patients must be educated about this new approval pathway and the potential risks of these fast-tracked therapies. The Medicaid population is significantly different from the privately insured population. There are potential concerns about the quality of evidence for drug approval as it pertains to the drug’s effects on Medicaid’s generally frailer, sicker population. Medicaid is statutorily required to cover any FDA-approved drug in return for mandatory rebates. No other payer is under this same obligation. In effect, the lowered evidentiary standards of this provision makes the vulnerable Medicaid population a captive market for any potential adverse effects not discovered in the accelerated approval pathway. If this provision is enacted, periodic surveillance reports on adverse events, outcomes, etc. for Medicaid and other vulnerable populations should be required. Medicaid should be allowed the flexibility to not cover drugs approved under this provision until sufficient post-approval studies have been conducted. This provision could both delay the introduction of new generic antibiotics into the market and delay generics for entirely separate drug categories. Manufacturers could extend exclusivity for particularly high-cost drugs longer than they otherwise Page 5 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Congressional leaders indicated they are still negotiating this issue, as evidenced by inclusion of a placeholder section (Subsection I, “Repurposing Drugs for Serious and Lifethreatening Diseases and Conditions”). Removed. As above, congressional leaders added a placeholder section (Subsection I, “Repurposing Drugs for Serious and Lifethreatening Diseases and January 2015 Discussion Draft Provisions infectious disease products” by 5 years Allows manufacturers to apply up to one year of this extended exclusivity to one or more drugs, in exchange for a commensurate reduction in exclusivity for the designated infectious disease product Manufacturers are required to make an as yet unspecified donation of profits to the NIH and a patient assistance program from sales of the non-qualified infectious disease product receiving enhanced exclusivity Sec. 1064 – Encouraging the Development and Use of New Antimicrobial Drugs Adds supplemental Medicare payment to hospital discharges which use new antimicrobial drugs. NAMD Staff Comments on Discussion Draft could. The free-floating nature of this variable exclusivity arrangement also removes an element of predictability for state planning purposes. Enhanced Medicaid rebates for extended exclusivity periods should be considered to mitigate these concerns. This provision creates an incentive for overutilization of new antimicrobial drugs, potentially building up new drug-resistant bacteria. To the extent that such new drugs are utilized, Medicaid cost-sharing for dually eligible beneficiaries will increase. Page 6 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Conditions”) to indicate that negotiations are ongoing in this area. Medicare payment incentives remain in Sec. 2123 – Encouraging the Development and Responsible Use of New Antimicrobial Drugs. Does not address Medicaid interaction with Medicare. Modified in Sec. 2121 – Approval of Certain Drugs for Use in a Limited Population of Patients. Allows HHS Secretary, at request of the sponsor of an antimicrobial or antifungal drug to treat a serious disease or condition, to hold meetings and make January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft Sec. 1081 – Priority Review for Breakthrough Devices Creates a priority review program for breakthrough devices which have no approved alternative or offer significant advances over existing devices Sec. 1082 – CMS Coverage of Breakthrough Devices [currently a placeholder] Sec. 1101 – Accelerated Approval for Breakthrough Devices The forthcoming placeholder section could impact Medicaid coverage policies. The accelerated approval provision could lower the evidentiary standard for device approval. The Medicaid population is significantly different from the privately insured population. There are potential concerns about the quality of evidence for device approval as it pertains to the device’s effects on Medicaid’s generally frailer, sicker population. If enacted, periodic surveillance reports on adverse events, outcomes, etc. for Medicaid and Page 7 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 agreements regarding clinical trial plans, drug assessments, and postapproval meetings. These agreements can allow the use nontraditional endpoints, phase 2 trial data, and other data sources to accelerate approval in specific patient populations. Any drug so approved must have labeling language indicating its indication for use in a limited and specific patient population. These drugs may be breakthrough therapies under that pathway designation and/or biologics. Priority review remains unchanged in Sec. 2181. CMS coverage of such devices and the accelerated approval pathways are removed. January 2015 Discussion Draft Provisions Allows HHS to approve breakthrough devices based on surrogate endpoints that are reasonably likely to predict clinical benefit Such approval may be subject to post-approval studies Sec. 1121 – Expanded Access Policy as Condition of Expedited Approval Requires manufacturers who receive a “covered investigational drug” designation to make their patient access policies to said investigational drug publicly available within 30 days of such designation. Sec. 1124 – Expanded Access Task Force Establishes an Expanded Access Task Force to make one-time recommendations to Congress. Subtitle L, Sec. 1221 – Dormant Therapies Creates a “Dormant Therapies” class with 15year exclusivity for drugs that address one or more unmet medical NAMD Staff Comments on Discussion Draft other vulnerable populations should be considered. In general, post-marketing surveillance/reporting must be robust and timely, with swift action for any issues. There may need to be additional consideration as to what type devices are permitted through this pathway. Ex. Implantable devices may need to be handled outside this process or have additional scrutiny before they are surgically implanted. A “covered investigational drug” should be treated as an “investigational drug” for purposes of the Medicaid outpatient drug exclusion for investigational drugs. States should have the flexibility to decide their coverage policies for such drugs. If states are required to cover a “covered investigational drug,” there should be an enhanced rebate for doing so. The interaction of this provision with the ability for manufacturers to charge patients and payers for using investigational drugs must be considered. What are the potential impacts on patients and payers? Is there a limit on these access costs? A 15 year exclusivity period for potentially high-cost drugs could severely disrupt pharmaceutical market dynamics and place significant strain on Medicaid programs, which disproportionately Page 8 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Now found in Sec. 2082 – Expanded Access Policy Requires manufacturers to make publicly available within 60 days of initiating a phase 2 or phase 3 trial for an investigational new drug their policy for provision of the drug. Legislation does not guarantee access to any individual patient. Does not address issues raised by NAMD’s April letter. Does not address the potential interactions with Medicaid or other payers. Removed. As noted above, a placeholder section (Subsection I, “Repurposing Drugs for Serious and Lifethreatening Diseases and January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft needs, as determined by HHS Sec. 1241 – Extended Exclusivity Period for Certain New Drug Applications and Abbreviated New Drug Applications Extends exclusivity by 2 years for drugs which cover the sickest and frailest populations. Medicaid relies on competition in drug classes to secure supplemental rebates and ensure access to appropriate therapies. Lengthy exclusivity periods make these objectives more difficult to achieve. Dormant therapies approved under this provision should either be considered “investigational drugs” for Medicaid purposes, or else be eligible for enhanced Medicaid rebates. Need additional clarification on what sorts of therapies are intended to be captured by this provision. It is not clear whether this provision precludes other competitor brands for the same indication or if this is meant to only prohibit generics for dormant brands. Would it be possible for a manufacturer to provide a new application for a therapy that has been off the market for a period of time and receive dormant therapy approval? If so, is this intended? Does this provision include traditional drugs through NDA approval and biologics assigned to CDER (Center for Drug Evaluation and Research) and CBER (Center for Biologics Evaluation and Research)? Allowing an additional 2 years of exclusivity for drugs may delay the introduction of generics into the market and reduce overall competition, which inhibits states’ abilities to negotiate supplemental rebates. This in turn has a direct Page 9 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Conditions”) indicates that congressional leaders are still negotiating this issue. Removed. A placeholder section (Subsection I, “Repurposing Drugs for Serious and Lifethreatening Diseases and January 2015 Discussion Draft Provisions make “significant improvements” to existing molecules Includes new indications, enhanced patient adherence, reduced public health risks, reduced side effects/adverse events NAMD Staff Comments on Discussion Draft Sec. 1261 – Extension of Exclusivity Periods for a Drug Approved for a New Indication for a Rare Disease or Condition Extends exclusivity by 6 months for orphan drugs impact on both federal and state Medicaid expenditures (within the pharmacy budget) and access to appropriate therapies. This provision provides additional incentives for actions and practices already underway in the pharmaceutical market. Line extensions of existing drugs are already common occurrences in drug development. How does this provision interact with the additional rebates Medicaid receives for pharmaceutical line extensions under the ACA? Who will determine whether the drug makes a “significant improvement”? FDA or the manufacturer? The language of this section suggests it is the latter. Is this intended? Can a drug given this status later lose the designation if post marketing studies show that the drug does not represent a significant improvement? Allowing an additional 6 months of exclusivity for drugs may delay the introduction of generics into the market and reduce overall competition. This has a direct impact on federal and state Medicaid expenditures, as Medicaid disproportionately covers the sickest and frailest populations. Congress may consider modifying the 340B Drug Discount Program as it relates to orphan drugs for the ACA’s newly covered 340B entities. There is confusion as to whether Page 10 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Conditions”) may revisit the initial proposal. Removed in the second draft, but reappeared in the third. January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft Sec. 2001 – Innovative Cures Consortium Creates a public-private partnership to accelerate drug discovery and development. Sunsets on September 30, 2021. Membership includes NIH, FDA, CMS, 22 appointed members – 5 federal agency representatives; 8 biomedical representatives; 9 academia/research, patient, provider, health plan representatives Consortium will award grants and contracts to small businesses and nonprofits to accelerate drug and device 340B pricing applies to orphan drugs purchased by these entities for treating a non-orphan condition. HRSA maintains via an interpretive rule that this is the case, but some manufacturers disagree. This makes it difficult for Medicaid agencies to accurately determine which drugs are eligible for Medicaid drug rebates and which are not (due to receiving the 340B price, which makes a claim ineligible for Medicaid rebates – the “duplicate discounts” or “double-dipping” issue). Any action taken on 340B should not further complicate the program’s administration for state Medicaid agencies. A state Medicaid representative should be a part of this body to address issues of cost and access from the state perspective. Measures should be put in place to minimize conflict of interest on the consortium. Staggered terms and the option to reappoint existing members at the end of their terms should be considered to ensure continuity of group and knowledge transfer. The consortium’s grant and contract program should reflect considerations and issues unique to the Medicaid program, particularly in the delivery components of the grants and contracts. Page 11 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 In new draft as Subtitle H, “Council for 21st Century Cures,” Sec. 1141. Creates a nonprofit public-private partnership which will advise Congress quarterly. It does not retain grant-making authority seen in the first draft. Sunsets on September 30, 2023. All federal members of the Council serve as exoficio members – heads NIH, FDA, CMS, and 5 other federal agency heads deemed to be working on biomedical research. January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft discovery, development, and delivery Sec. 2021 – Medical Product Innovation Commission Creates a new Commission, structured similarly to MACPAC and MedPAC, to make recommendations to Congress on drug development. Sec. 2085 – Expanding Availability of Medicare Data Sec. 2085(b)(1)(B)(ii) grants the HHS Secretary discretion to share Medicaid and/or CHIP claims data (to supplement Medicare data) with clinical data registries to support outcomes and patient safety research. A state Medicaid representative should be a part of this body to address issues of cost and access from the state perspective. Medicaid data can be highly variable and dependent on state program and population contexts. An insufficient understanding of the nuances of state Medicaid data can produce an inaccurate picture of a state’s program. States should have the opportunity to provide context for any data requests. Part of the data collection fees should be shared with the states to support their administrative costs in fulfilling data requests. Page 12 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Remaining 17 members are appointed by the Comptroller General – 4 from Pharma, 2 from the device industry, 2 from HIT, 2 academic researchers, 3 patient reps, 2 provider reps, 2 payer reps. Legislation details term limits and transitions. Does not detail how to minimize conflict of interest or specifically call on the Medicaid perspective to be represented. Removed. Removed. January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft Sec. 2121 – Authority for Coverage with Evidence Development for Medical Devices under the Medicare Program Allows Medicare to pay for medical devices used by patients in clinical trials. Sec. 2141 – Regulation of Combination Products by FDA Requires the FDA to issue additional guidance on the review process for products that combine drugs and devices. The impact of this policy on Medicaid cost sharing for dually eligible beneficiaries must be considered. This provision could require Medicaid to pay, in part, for an intervention without sufficient evidence for normal coverage under the Medicaid program. Combination products potentially pose a difficult reimbursement issue for Medicaid programs. For example, the device component of the product may not need to be replaced as often as the drug component needs to be refilled, but a product which packages these components together requires states to replenish both. This scenario does not comport with Medicaid’s statutory requirements for efficiency and economy. Combination products also pose potential challenges for coordination across Medicaid medical and pharmacy benefits. It would be helpful to clarify whether FDA will approve combination drug/device products as a drug vs a device. If FDA approves these as a drug, then Medicaid will benefit from rebates in exchange for coverage. If approved as a device, then the products would not be eligible for federal rebates. FDA should engage with state Medicaid agencies during its approval process for combination therapies. Page 13 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Removed. Removed. January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft Sec. 4181 – Advancing Telehealth Opportunities in Medicare Requires HHS to develop, within 4 years, a Medicare coverage and payment methodology for telemedicine services that is equivalent to face-to-face service coverage and reimbursement. Services that this methodology apply to will be selected by the Secretary via rulemaking. The Secretary may waive originating site, geographic, and/or health provider limitations in this methodology. Sec. 4281 – Establishing PDP Safety Program to Prevent Fraud and Abuse in Medicare Prescription Drug Plans Creates a pharmacy lockin program for Part D beneficiaries prescribed controlled substances. Allows Part D plans to suspend pharmacy Though this provision does not directly impact Medicaid, it could provide a model for addressing telemedicine issues in Medicaid in the pharmacy space. The impact on Medicaid’s provision of cost-sharing for dually eligible beneficiaries for these services should be considered. States are supportive of the Medicare Part D lock-in provision. Most states already have some type of lock-in program for Medicaid beneficiaries prescribed controlled substances or where there may be other patient safety or program integrity concerns. A comparable requirement on the Part D side could help bring consistency across the programs particularly as it Page 14 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015 Replaced by Sec. 3021, “Telehealth Services Under the Medicare Program.” Requires the HHS Secretary to submit to Congress populations of Medicare beneficiaries, including duals, whose quality of care could benefit from increased telehealth services; a list of CMMI activities relating to telehealth; a list of procedure codes and diagnoses suitable to being furnished via telehealth; and potential barriers to more widespread adoption of telehealth services. Contains a Sense of Congress that states should collaborate to create common licensure requirements for telehealth services to facilitate practice across state lines. Remains, now in Section 3151. Does not significantly address NAMD concerns raised in our April letter. Does grant the Secretary authority to place limitations on special enrollment periods in Medicare Part D for full duals. The nature of January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft payments pending investigation of credible allegations of fraud. Sec. 4284 Requires e-prescribing of covered controlled substances. Sec. 5001 – Extension of Exclusivity Period for American-Manufactured Generic Drugs and Biosimilars Changes in Discussion Drafts, April 29 and May 13, 2015 pertains to the dual eligibles, these limits is left to the improve patient care and safety, and Secretary. prevent inappropriate use. Lock-in programs are helpful for clinical coordination even in the absence of fraud and abuse. The distinction between the federal definitions of controlled substances versus state definitions, which may be stricter, will need to be considered. Provider and pharmacy readiness to meet the e-prescribing provision must be considered. As there is substantial overlap between Medicare and Medicaid providers and pharmacies, Medicaid will be impacted by this requirement and may potentially have to provide education and support to comply with it. This state effort to ensure provider capacity and infrastructure readiness for e-prescribing should have federal support. What occurs if pharmacies are unable or unwilling to accept eprescriptions? Pharmacies are the primary bearers of transaction costs in an e-prescribing environment. Non-participation could seriously disrupt access to medications for dually eligible beneficiaries, which are among Medicaid’s most vulnerable populations. Removed. Though currently vague, this provision could delay introduction of additional generics and biosimilars to the market. These products are key to maximizing value in Medicaid pharmacy budgets. Page 15 of 16 January 2015 Discussion Draft Provisions NAMD Staff Comments on Discussion Draft Placeholder section will define “American manufactured drug” for purposes of exclusivity Provides designated “Americanmanufactured” generics or biosimilars an as-yetunspecified exclusivity extension This extension is not applicable to drugs which have received a separate exclusivity extension or to drugs whose filed application is licensed for a change resulting in a new route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength. How would this provision be monitored and enforced? Many manufacturers are headquartered in other countries and may have one plant in US and others in other countries. Additional Medicaid rebates or an enhanced FMAP should be considered for these products. Page 16 of 16 Changes in Discussion Drafts, April 29 and May 13, 2015