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Note: ACHP has released The Spike in Drug Costs Infographic Series: Cholesterol, the newest installment in our infographic series.
Mylan Pharmaceuticals overcharged Medicaid for EpiPen
Medicaid overpaid for Mylan Pharmaceutical’s EpiPen, spending more than $700 million on it between 2011 and 2015. Mylan’s classification of the EpiPen as a generic drug qualified it for a 13 percent rebate, but CMS claims the EpiPen should be classified as a brand drug, requiring a 24 percent rebate. Ed Silverman with STAT News writes Mylan maintains it classified the drug correctly based on past documentation noting the EpiPen is a non-innovator, or non-brand, drug.
Drug prices increase, but who is to blame
Drug manufacturers and pharmacy benefit managers (PBM) each profit from increasing drug prices, but disagree on who is responsible for the trend. PBMs serve as the middleman among drug manufacturers, employers and insurance companies. These entities are responsible for minimizing drug costs by dictating covered drugs and negotiating the best price and rebates. Critics of PBMs argue these rebates encourage drug manufacturers to significantly increase prices to offset the perceived loss in revenue. While PBMs attest their rebates do not cause price inflation, they do acknowledge the profit from increased drug prices. Drug manufacturers believe PBM rebates contribute not only to rising drug costs, but also to rising copays. As Joseph Walker at The Wall Street Journal explains, their solution is eliminating rebates (subscriber’s content).
- Kaiser Health News has published an infographic outlining the Pipeline to Profits: How Drug Middlemen Make Their Money
FDA issues black-box warning for hepatitis C drugs
The U.S. Food and Drug Administration (FDA) has issued a black-box warning for direct-acting antiviral drugs (DAA) including Harvoni, Sovaldi and Viekira Pak. These pharmaceuticals carry the risk of reactivating a past or current hepatitis B (HBV) infection that can cause significant liver damage and even death. Carly Helfand with FiercePharma notes the warning instructs physicians to screen for HBV in all patients taking DAAs.
Large insurers to participate in CMS Part D enhanced MTM model
Six insurers covering more than 1 million beneficiaries including Humana, Blue Cross Blue Shield and UnitedHealthcare have been selected by the Centers for Medicare and Medicaid Services (CMS) to participate in a five-year Medicare Part D medication therapy management (MTM) model beginning January 1, 2017. CMS is providing incentives to participants to reduce their fee-for-service expenditures by 2 percent as well as an increased beneficiary subsidy to support innovation. Susan Morse of Healthcare Finance shares several key elements of this model, including the ability to tailor services to individual enrollees based on their medication-related risks.
Theranos to close clinical labs and wellness centers
Embattled Theranos, a health-technology and medical-laboratory services company, announced Wednesday it will close all clinical labs and wellness centers, laying off more than 300 employees. These consumer-focused operations had been the core of Theranos’ innovative approach to bypassing the doctor and gaining information about one’s personal health. Moving forward the company plans to focus on its minilab platform, which allows small-volume testing for vulnerable patient populations. Ariane Eunjung Cha from The Washington Post reports.
Earlier this week:
Consumers file suit regarding drug costs
UnitedHealth Group Inc. customers could be grossly overpaying for prescription drugs, according to a lawsuit filed Tuesday. Plaintiffs assert UnitedHealth is pocketing the difference between the price of medication and the co-pay. UnitedHealth customers are responsible for the full co-pay of prescription drugs, yet the insurer has agreements with pharmacies to lower the cost. Kat Greene at Law360 has the story (subscriber’s content).