November 17, 2017
Trump nominates former pharmaceutical executive Alex Azar for HHS Secretary
President Trump has nominated Alex Azar to serve as the next HHS Secretary. Most recently, Azar served as president Eli Lilly and Co. Azar also has experience at HHS, serving as a deputy secretary under President George W. Bush. The nomination has raised concerns that, despite the president’s rhetoric, the Trump Administration is not taking drug pricing seriously; the Administration has come under fire for filling a number of key positions with former employees of pharmaceutical companies, and Eli Lilly is facing a class-action lawsuit for price increases on insulin treatments under Azar’s tenure. Trump, however, claims that Azar will be a champion for lower drug prices. Confirmation hearings for Azar’s nomination begin November 29.
Drug Price Discussion Continues
CMS seeks input on sharing drug discounts with consumers
CMS is asking for comments on a draft rule aimed at lowering consumer out-of-pocket costs for prescription drugs under Medicare Part D. The draft rule allows enrollees greater choice in what pharmacies they use, allows midyear formulary changes to adjust for the launch of new generics, and would treat biosimilars the same as generics when determining out-of-pocket costs. CMS is also exploring new rules around pricing transparency due to questions over how to ensure discounts negotiated between insurers and PBMs should be reflected in patients’ out-of-pocket costs.
Drugmakers among most profitable health care companies
Drugmakers continued to reap the majority of health care industry profits in the third quarter of 2017, pulling down more than 60 percent of all profits despite collecting only 22 percent of all health care revenue. The most profitable was drug and medical device maker Johnson & Johnson, which posted a net profit of $3.8 billion. Drugmakers accounted for 12 of the 15 highest net profit totals in the industry.
HHS officials have ties to pharma
President Trump has frequently criticized drugmakers for high prices, but has appointed former pharmaceutical employees to a number of important positions at HHS prompting concerns that federal officials may have narrow perspectives or conflicts of interest that prevent them from effectively regulating the industry. The Administration and its allies defend the officials as highly qualified specialists in health care who bring essential private market experience to the roles.
Legislative tactics could create more competition
Drug companies frequently use patents and complicated legal maneuvers to protect their rights to exclusively produce certain drugs. In a column for the Wall Street Journal, Rutgers professor Michael Carrier lays out four ways Congress can help counter these actions and create more competition. Carrier recommends passing legislation that would protect generic drugmakers’ access to drug samples they need; prohibiting patent protections for drug-distribution programs; passing legislation that prevents brand names from paying off first-filing generics; and reforming the FDA’s “citizen petition” process, which is often abused by brand drugmakers to slow the approval of generics.
House passes fix to defense bill’s medical approval provision
The House of Representatives passed a bill to speed up FDA approval of medical devices and drugs to be used on the battlefield. The bill addresses controversy that erupted after lawmakers included a provision in the annual National Defense Authorization Act (NDAA) that would allow the Pentagon to use non-FDA approved drugs in the field. The Pentagon sought the provision due to frustration over the FDA’s slow approval of treatments, but the provision came under fire for bypassing the FDA’s authority. Lawmakers hope the new bill passed by the House will speed up the Pentagon’s approval requests while preserving the FDA’s authority.
Low participation in drug disposal programs
Some pharmacies and clinics are not participating in drug take-back programs due to cost and confusion around regulations. A Government Accountability Office report found only about 3 percent of pharmacies and other organizations eligible to collect unused prescription drugs for disposal have volunteered to do so. Some groups said the cost of installing collection bins according to DEA requirements or paying for the destruction of drugs prevent participation.
Energy and Commerce urges HHS to look into supply chain transparency for medical devices
The House Energy and Commerce Committee has sent a letter to HHS asking the FDA to begin requiring medical device manufacturers to list bills of materials—specifically, the hardware and third party software used in each product. When security breaches are found, software designers often update the code to fix the flaw, but sometimes manufacturers fail to update the code accordingly, placing patients at risk. The change would allow consumers to find out if software breaches affect their device and seek a remedy from the developer or manufacturer.
The Opioid Epidemic
CMS rule limits Medicare beneficiaries access to opioids
CMS is proposing changes to Medicare plan requirements in order to curb opioid abuse. Under the draft rule, Medicare patients will only be able to fill opioid prescriptions at select pharmacies designated by CMS, allowing greater control over the disbursement of the treatments. Beneficiaries who have cancer, are in hospice or long-term care for drug management are exempt from the rule.
High cost of opioid epidemic
The opioid epidemic is costing the American economy more than $95 billion annually, according to an analysis released by Altarum. The economic impact from loss of life accounts for almost half of the epidemic’s drain on the economy, accounting for more than $43 billion lost. The report also notes that relatively little has been spent to fight the epidemic and calls for additional funding; however, the report does not provide a firm estimate on how much funding would be necessary to properly address the epidemic.
Opioid advocates head to Capitol Hill
Advocates are working to encourage lawmakers to fund efforts to combat the opioid epidemic. Representatives from the Opioid Network, which is spearheaded by the Center for Popular Democracy and made up of more than 45 groups from around the country, were on Capitol Hill this week targeting lawmakers who have taken money from drug companies. The Opioid Network has several requests of lawmakers, including allocating $45 billion over 10 years for treatment and overdose prevention and preventing cuts to Medicaid.
FDA approves wearable aimed at opioid pain
The FDA has granted expedited approval for a wearable device designed to block the pain from opioid withdrawal. The device attaches to a patient’s ear and transmits small electrical pulses into the brain to counteract the effects of withdrawal. While the device has shown some success, there is limited evidence proving it is effective, and safety advocates are concerned the manufacturers may be overstating the device’s effect.
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