Merck Lawsuit Against Drug Negotiation
Merck filed a lawsuit (June 6) against the provisions of the Inflation Reduction Act (IRA) of 2022 requiring the Department of Health and Human Services (HHS) to negotiate drug prices for Medicare program beneficiaries. The Administration sought the authority to negotiate prices for all health insurance populations, but was only successful in securing the authority for the Medicare program.
Under the program, HHS must negotiate drug prices on the highest cost single-source drugs in Medicare that have been on the market nine years for small molecule drugs and 13 years for biologics. HHS has authority to negotiate prices for 10 drugs for 2026, 15 drugs for 2027 and 2028, and 20 drugs thereafter.
Merck is claiming that the IRA violates the Fifth Amendment, requiring the government to compensate appropriately when it takes property– i.e., that the government cannot seize private property without making a due compensation at the market value of the property. Merck claims that any “negotiation” is not, actually, a negotiation when the company will be coerced into agreeing to the government’s terms.
HHS is scheduled to begin the drug negotiation process this coming September when it will announce the first 10 drugs subject to negotiation (with prices that go into effect on January 1, 2026).
Merck is expecting that one or more of its drugs will be included in the first group.
Telemedicine Prescription Rules Extended
The Drug Enforcement Agency (DEA) announced (May 10) that it is extending COVID-19 telehealth flexibilities for controlled medications for six months while it considers comments on proposed rules on permanent flexibilities.
In February, the DEA issued proposed rules regarding the issuance of medications via telemedicine, which basically continue in-person visits for the most addictive medications, while those with the least abuse potential can still be prescribed via telehealth.
During the COVID-19 pandemic, the Federal Government loosened rules to permit the prescription of medications during telemedicine visits, including powerful drugs like OxyContin, Adderall, and Vicodin.
Under proposed rules, persons will now need to see a doctor in person at least once to receive an initial prescription for drugs that have the greatest potential to be abused, though persons can still receive refill prescriptions via telehealth.
Less addictive substances (such as Abmien, Xanax, and Codeine) can be prescribed over telehealth for an initial 30-day dose, but patients would need to see a doctor at least once to get a refill. Telemedicine-only prescriptions will be permitted for common prescriptions like antibiotics, skin creams, insulin and birth control.
Voluntary Insulin Price Reductions
Sanofi became the third and final major manufacturer of insulin products to announce (March 16) slash insulin prices for all insured US customers. Sanofi says that it will reduce the price of its most prescibed product––Lantus––by 78% and cap out-of-pocket costs at $35 per month.
The new pricing will go into effect in January 2024. Since last year, Sanofi already had a price-limiting plan and $35 per month out-of-pocket-cost-cap for uninsured Americans.
Novo Nordisk was the second insulin manufacturer to announce a significant, voluntary reduction in the price of insulin, announcing (March 14) that the company will reduce prices “up to” 75% starting in January 2024.
In the announcement, Novo Nordisk claimed that it has “been working to develop a sustainable path forward that balances patient affordability, market dynamics, and evolving policy changes.” The policy change reference likely relates at least in part to the Biden Administration’s successful inclusion of a $35 per month cap in the price of insulin for Medicare beneficiaries in the 2022 Inflation Reduction Act, a cap that began this year.
While Novo Nordisk is not reducing prices to an $35 out-of-pocket-cost-per-month level, the company’s lowest price insulin product will be priced at just $48 per vial.
The US is facing a shortage of Albuterol, the key medication used to treat asthma and other related respiratory illnesses, for example using a nebulizer. The medication has been on the Food and Drug Administration’s (FDA) drug shortage list since the end of October, 2022.
Akorn Pharmaceuticals, the primary company manufacturing the medication, shut operations in February after declaring bankruptcy. That leaves just one US manufacturer currently producing liquid albuterol–Nephron Pharmaceuticals.
FDA has authorities to address the shortage, such as expediting new supply lines and finding foreign-made alternatives. Last year during the infant formula crisis the FDA expedited the approval of foreign imports of formula to ease supply challenges.
The FDA has not yet publicly outlined plans to address US albuterol.
Over-the Counter Hearing Aids
The FDA finalized a rule (August 17th) that will enable over-the-counter (OTC) sales of hearing aids without a medical prescription. OTC sales will be permitted for certain hearing aids on sale as of October 17, 2022, which is also the effective date of the rule. Hearing aids not approved for sale by the deadline will have to go through regulatory review before being permitted for OTC sales.
All hearing aids will not necessarily be permitted OTC; only those intended for “mild to moderate” hearing loss. Eligible hearing aids will be subject to labeling requirements as a condition for sale.
The FDA claims that this rule “will protect the public health by providing reasonable assurance of safety and effectiveness for hearing aids, as well as promote the hearing health of Americans by lowering barriers to access and fostering innovation in hearing aid technology.”
Drug Price Negotiation
Drug price negotiation for Medicare beneficiaries was included within the Inflation Reduction Act (IRA) of 2022, enacted into law in August 2022.
The law requires the Federal Government to negotiate prices for 10 medications starting in 2026, gradually rising to 20 in 2029. Under prior law, the Federal Government was specifically prohibited both from interfering in the negotiations between drug manufacturers and the prescription drug plans (PDPs) that deliver the Medicare benefit and from requiring a particular formulary or instituting a price structure for the reimbursement of covered drugs.
An effort to include a provision to facilitate drug price negotiation by the Federal Government outside of Medicare failed during consideration of the IRA in the Senate, when it was blocked on procedural grounds after Republican members of the Senate voted to oppose its inclusion in the legislation. The current Democratic majority is not sufficient to overcome procedural hurdles in the Senate legislative process.
Capping the Cost of Insulin
A cap on insulin copays at $35 per month for Medicare beneficiaries starting in 2023 was included within the Inflation Reduction Act (IRA) of 2022, enacted into law in August 2022.
An effort to include a provision to implement the same cap for insulin outside of Medicare failed during consideration of the IRA in the Senate, when it was blocked on procedural grounds after most Republican members of the Senate voted to oppose its inclusion in the legislation. The current Democratic majority is not sufficient to overcome procedural hurdles in the Senate legislative process.
Alzheimers Drug Decision - Aduhelm
The Centers for Medicare and Medicaid Services (CMS) announced its final decision (April 7, 2022) regarding Medicare coverage of the Alzheimers drug marketed under the name “Aduhelm.” Specifically, CMS says that Medicare will limit coverage to patients in approved controlled trials. CMS says it wants more data on the drug’s effectiveness before granting coverage to a broader population. This final decision is consistent with its initial decision in January.
Broader coverage could have significant public policy and cost considerations. Biogen, the maker of Aduhelm, originally placed the cost of the drug at $56,000 per person, per year. With the CMS decision pending, and concern growing about the future potential cost to the Medicare program, Biogen subsequently announced (December 20, 2021) that it was reducing its planned cost in half, to $28,000 per person, per year. Biogen estimated prior to the CMS decision, 50,000 persons would seek Aduhelm treatment in 2022, meaning the first year annual cost would total $1.4 billion. But this may only be a small fraction of potential future cost, as Biogen is said to be targeting persons in the early stage of Alzheimers, a population that could total anywhere between 1-2 million Americans out of a total of 6 million Americans said to be living with the disease.
For now, this matter is decided. If the drug provides more evidence of effectiveness in the future, CMS will likely need to revisit this decision.
Funding for “ARPA-H” Approved for FY 2022
Congress took final action on FY 2022 appropriations (March 10, 2022) to include $1 billion to establish an Advanced Research Projects Agency for Health (ARPA-H) within HHS to accelerate the pace of scientific breakthroughs for diseases such as ALS, Alzheimer’s disease, diabetes, and cancer.
The Biden Administration announced (January 2, 2022) a "Cancer Moonshot" initiative with guiding goals of reducing the death rate from cancer by at least 50 percent over the next 25 years, and also improving "the experience of people and their families living with and surviving cancer." This effort appears to mostly direct an improved focus on, and strategy around, existing efforts rather than establishing new initiatives. That being the case, the key new/enhanced efforts include:
The establishment of a White House Moonshot Coordinator position, and the formation of a "Cancer Cabinet" that will convene to bring together departments and agencies across government to establish goals and track progress.
To deliver a "message of urgency" to the US population and to help increase access to cancer screenings. The White House estimates that there have been more than 9.5 million missed cancer screenings in the United States as a result of the COVID-19 pandemic.
The National Cancer Center will study and evaluate multicancer detection tests, similar to the approach for COVID-19 diagnostics.
HHS will accelerating efforts to "nearly eliminate cervical cancer" through outreach to at-risk populations for screening and HPV vaccination.
Lead Exposure and the US Population
A study released by the National Academy of Sciences (March 7, 2022) found that an estimated 170 million Americans (about half the U.S. population) had “clinically concerning levels of lead in their blood when they were children,” in particular through exposure to emissions from leaded gasoline.
Researchers calculated that 824 million IQ points collectively were lost by Americans tied to exposure, the worst results being persons born in the mid-to-late 1960s when the data showed such children had eight times the current minimum level to initiate clinical concern. Perhaps more concerning is that the researchers believe that, overall, persons born before 1996 may be at greater risk for lead-related health problems, such as faster aging of the brain.
National Health Services Corps Expansion
The Biden Administration announced (November 2021) that it is awarding $1.5 billion in funding approved as part of COVID-19 recovery law earlier in FY 2021, towards healthcare to underserved communities (e.g., rural, minority communities, etc.), with a focus on expanding the National Health Services Corps. The announcement is consistent with recent recommendations of the President's Health Equity Task Force. The announcement claims that the funding will support over 22,700 healthcare "providers" -- e.g., doctors, nurses, dentists, and behavioral health providers. The General Accountability Office (GAO) found that the program in 2020 supported about 14,000 providers.
Importation of Less Costly Drugs from Canada
The Biden Administration issued an Executive Order - 14036 (July 9, 2021) on competition in the economy, which included a provision instructing the FDA to work with States to help them develop drug importation programs for Canadian drugs. The FDA deployed a website to help facilitate this purpose.
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Current Medicare Coverage
This website of the Centers for Medicare and Medicaid Services provides information about health care coverage under current Medicare law and regulation.
Status: no comprehensive changes are currently anticipated, but the House-passed Build Back Better Act proposes to expand coverage for hearing aids starting in 2023, as well as reforms to Part D starting in 2024 including capping out-of-pocket expenses at $2,000 and limiting prescription drug costs. It is not clear that these proposals will be considered by the Senate in the current (117th) Congress.
Hearing Aids Rule
This Final Rule was published (August 18th) by the FDA permits over-the-counter sales of hearing aids that are approved for use prior to October 17, 2022 (also the effective date of the rule), and streamlines the regulatory regime of future hearing aids.
HAVANA Act of 2021
This law authorizes the CIA Director, the Secretary of State, and other agency leaders to provide injured employees with additional financial support for brain injuries that are incurred during a period of assignment to a foreign or domestic duty station; are in connection with war, insurgency, hostile acts, terrorist activity, or other agency-designated incidents; and, are not as the result of willful misconduct.
Status: this law was enacted on October 8, 2021.