Medicare, SCHIP and Health Insurance Debates Present Ample Opportunities
The pharmaceutical industry faces a radically different political environment in Washington in 2009 than at any time in the recent past; but opportunities and threats differ from sector to sector. Barack Obama’s ascension to the White House, the fattening of the Democratic majority in Congress and the shift in leadership of at least one key committee signals the acceleration of three trends: a shift in emphasis from treatment of disease to prevention, from brand-name drugs to generics and to comparative research on which brand-name drugs really work. These trends will likely highlight the value of pharmacists, for example, and undercut the appeal of brand-name drugs, to mention the prospects for two sectors, for example.
What will be a new emphasis on prevention and better-informed patients presents the opportunity for pharmacists to get federal backing to elevate their role from prescription fillers to health care advisors. “There is going to be an emphasis on prevention in any legislation targeting the uninsured and that means there will be opportunities for advancing the health care role of pharmacists,” says John M. Coster, vice president, federal affairs and public policy, RiteAid. “There will be a concerted effort in 2009 among pharmacy groups to push for direct payment of pharmacists for medication therapy management (MTM) and immunization services, including by Medicare.” But the health insurance industry is expected to lobby hard against new, discrete payments to pharmacists since, with regard to Medicare, it receives payments directly for MTM services which can be provided by any health professional, not just pharmacists.
There will be numerous legislative opportunities for pharmacists to expand their roles in both private and federal health programs. A Medicare Part D “reform” bill will probably move much more quickly than an “uninsured” bill because the House passed such a bill—its main feature was allowing the federal government to negotiate Medicare drug prices directly with drug companies--in 2007 only to see it derailed in the Senate by Republican opposition and a George W. Bush veto threat. The Democrats have, at this writing—with the occupants of two seats still in doubt—58 votes in the Senate, including those of two independents, Sens. Joe Lieberman (Conn.) and Bernie Sanders (Vt.), who caucus with the Democrats. In addition, a couple of Senate Republicans remaining in Congress voted for the Medicare Part D reform bill in 2007. The question for that bill, as for State Childrens’ Health Insurance Program (SCHIP), which is a “must pass” because of the impending expiration of the program’s authorization in March, is just how many pharmaceutical amendments will be attached to those legislative vehicles.
As with the potential expansion of the role of pharmacists, the tightening or loosening of restrictions on Medicare formulary policies are probably also up for grabs as in the form of amendments to either a Part D or SCHIP bill. The issue cropped up in 2008 because of passage last summer of the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA). The main purpose of that bill was to eliminate a big cut in Medicare pay for physicians in the second half of 2008 and calendar 2009, and replace it with a minimal increase. The bill was introduced in June and passed within weeks without any hearings being held because of a June 30 deadline for a precipitous decline in physician pay. The frenzy surrounding the bill made it an appealing target for all sorts of amendments which Congress, had it acted in a more purposeful manner, might not have considered, much less passed.
Drug manufacturers, aligned with patients’ and some physicians’ advocacy groups, used the haphazard environment to get an amendment attached to the MIPPA which could potentially expand the Part D formulary program. Currently, Medicare has a limited “mandated” formulary, established by way of guidance issued by the Centers for Medicare and Medicaid Services, which says all Part D drug plans are required to provide “all or substantially all” medications within six classifications: including the immunosuppressants, antidepressants, antipsychotics, anticonvulsants, antiretrovirals and antineoplastics. That guidance was issued at the beginning of 2006, when the Medicare outpatient drug benefit kicked in. The guidance was established to protect the stream of fragile Medicaid recipients who were being transferred to the Part D program, the so-called “dual eligibles,” so that whether they were being treated for depression, psychosis or any of the other four conditions, they would not be taken off their current medication.
Patients’ groups and drug manufacturers wanted a more permanent, and potentially broader, Medicare formulary program. That is where section 176 of the MIPPA came in. It cancelled the six categories—because dual eligibles are no longer coming into Part D—and set up a new process whereby the secretary of the Department of Health and Human Services designates drug classes which meet both of two conditions: 1) Restricted access to drugs in the category or class would have major or life threatening clinical consequences for individuals who have a disease or disorder treated by the drugs in such category or class and 2) there is significant clinical need for such individuals to have access to multiple drugs within a category or class due to unique chemical actions and pharmacological effects of the drugs within the category or class, such as drugs used in the treatment of cancer. Formularies would have to provide all available drugs in each of those categories, although exceptions could be made. The secretary could designate as many categories as applicable with the hope of drug companies and patients groups being that the number would be far beyond six.
Among those who have had second thoughts about some provisions in the MIPPA is Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee. He wrote a technical corrections bill which would make some ostensibly minor changes—that is why it is called a “technical corrections” bill--including eliminating Section 176. The Baucus bill would simply reinstate the CMS guidance. But groups such as the Academy of Managed Care Pharmacy oppose both section 176 and the CMS guidance. Judith A. Cahill, executive director, AMCP, said, “We would suggest that the appropriate ‘corrective’ action that should be taken by the Congress is to repeal Section 176 with language that reaffirms the independent, evidence-based Part D formulary decision-making process that is applicable for all therapeutic drug classes.” The AMCP has produced a study showing that the regulations requiring Medicare’s Part D prescription drug plans to include all drugs in the six designated classes could be costing U.S. taxpayers an additional $511 million per year.
The upcoming Medicare reform bill will also be the venue for a full-court press from pharmacy groups for direct payment to pharmacists for expanded MTM services. The Medicare Modernization Act (MMA) of 2003, which established the Part D drug benefit, defined MTM services very narrowly, and dictated that prescription drug plans (PDPs) only had to offer them to a small subset of beneficiaries: 1-those with multiple chronic conditions; 2-who take multiple medications; and 3-who have drug costs that are expected to exceed $4,000 per year. For those patients, MTM services can be provided by anyone, not just the pharmacist at the point of prescription delivery. Services can be provided via a telephone call; and that call can be made by any type of health professional. Medicare reimbursement for MTM services is not dictated either; it is part of the administrative fee Medicare pays a particular PDP. The plan then decides how much to pay whichever professional delivers the service.
The American Pharmacists Association (APhA) is part of a broad coalition called the
Leadership for Medication Management which has developed a MTM legislative agenda which includes payment to pharmacists for activities outside the current scope narrowly defined by the MMA. Payments to pharmacists could be approved for such things as collaboration with the physician to provide feedback on drug therapy and development and implementation of a medication management plan, in collaboration with the caregiver and others.
But questions have been raised about the effectiveness of MTM services. MedPac, the group which advises Congress on Medicare policy, issued a report on November 6, 2008 saying that there was no data that MTM services are effective. It recommended some things Medicare could be doing, such as setting minimum standards for MTM programs and requiring outcomes reporting. Both those ideas leave the APhA queasy. “We are concerned that a minimum could become the maximum and could remove the discretion of the health care providers, working with patients, to determine the needs of an individual patient,” says John A. Gans, PharmD, executive vice president and CEO, APhA.
Any legislation expanding MTM services and payment would have to be negotiated with Tom Daschle, the new secretary of the Department of Health and Human Services. The former leader of Senate Democrats, who has been out of Congress for a few years,
was a leading supporter of federal negotiation with drug companies over Part D prices and, as an analog to that, development of a national, Medicare formulary. But besides wrestling with Medicare reform efforts, Daschle will confront congressional efforts to toughen up regulation of the drug industry by the FDA, an agency which is part of the HHS.
In terms of FDA oversight and legislation, the House has a new Drug Lord, Rep. Henry Waxman (D-Calif.). He replaces Rep. John Dingell (D-MI) as chairman of the House Energy & Commerce Committee which has considerable authority over health policy. Dingell, who remains at the committee, is an old bull, the longest serving member of the House, a bit crotchety and better known these past few years for his dyspeptic questioning of committee testifiers rather than for getting bills passed. Waxman is a ball of energy. Moreover, he has been a pesky antagonist of the brand-name drug industry, constantly investigating its drug pricing policies and highlighting questionable aspects. In 2008, as chairman of the House Oversight & Investigations Committee, Waxman had no legislative authority. In 2009, he has more legislative authority than almost anyone in the House, and he is closer to House Speaker Rep. Nancy Pelosi (D-Calif.) than Dingell.
The flip side of Waxman’s antipathy to the brand-name industry is his support for greater use of generics. It was Waxman who last year teamed up with Sen. Charles Schumer (D-N.Y.) to introduce a bill called the Access to Life-Saving Medicine Act which created a pathway at the FDA for approval of generic versions of the most advanced types of biotechnology drugs such as various types of interferons. The point here is that the Waxman bill is considerably more pro-generic than a rival bill which actually passed a Senate committee last June. That is called the Biologics Price Competition and Innovation Act. Its chief sponsor is Sen. Edward Kennedy (D-Mass.). The Pharmaceutical Care Management Association preferred the Waxman bill because it conferred no market exclusivity on innovator biological drugs. The Biologics Price bill gave innovator companies 12 years plus the possibility of additional time through minor changes to its preference product.
Waxman’s increased prominence and Obama’s presence—he made wider use of generics a major plank in his “uninsured” platform--means not only the likely passage of a biopharmaceuticals bill but of legislation allowing reimportation of brand-name drugs from other Western countries, a proposal the Pharmaceutical Research and Manufacturers of America (PhRMA) has hotly opposed.
But President Obama and his allies in Congress will be shoving quite bit down the throat of PhRMA in 2009. Fortunately, pharmacists face a more promising fate.