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Policy Watch
Does the Government ‘Blueprint’ to Lower Drug Prices Help Neurology?

ARTICLE IN BRIEF

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THE ADMINISTRATIONS blueprint for addressing the high cost of prescription drugs drew a response from the AAN to the Department of Health and Human Services.

In a letter to the Department of Health and Human Services, the AAN responded to the Administration's latest proposal to lower drug prices and reduce patients' out of pocket costs. Among concerns, the AAN objected to the suggestions to move Part B drugs to Part D coverage.

Policy analysts at the AAN share the government's concern about the high prices of prescription drugs. After all, neurology drugs, particularly those for multiple sclerosis, and for orphan conditions such as spinal muscular atrophy and Duchenne muscular dystrophy, are among the most expensive on the market.

But in interviews with Neurology Today, they expressed concerns with the Administration's latest proposal to lower drug prices and reduce patients' out of pocket costs. The proposal, released in May in a document entitled American Patients First, included a wide range of ideas that the government contends might lead to lower drug prices or at least lower out-of-pockets for patients.

In written comments to the Department of Health and Human Services (HHS) in July, the AAN sought to focus the government's attention on a sector that gets scant attention in the blueprint: the drug manufacturers that set the price of medications.

“Actions throughout the drug pricing system can improve components of this issue and we welcome the proposals in your blueprint as a starting point for change,” said the letter signed by AAN President Ralph Sacco, MD, MS, FAHA, FAAN, chair and professor of neurology at the University of Miami Health System. “The problem will never truly be solved, though, until manufacturers are held accountable for setting unaffordable prices.”

PART D, PART B MEDICARE COVERAGE

The AAN was also concerned about the government's suggestion to move Part B drugs to Part D coverage. Medicare Part B drugs are generally prescribed for complex conditions that require intensive management, and the drugs are often infused or injected by health care professionals. Part D is the outpatient prescription drug benefit sold by private insurers.

Moving Part B drugs to Part D would be problematic for two reasons, in the AAN's view. For one, it presents a safety concern because most retail pharmacies where patients get Part D drugs are not set up to dispense and deliver drugs that require special handling and temperature-controlled storage that many Part B drugs require. And this shift would place extremely expensive Part B drugs in Part D, which would cause premiums to rise.

In addition, some Medicare beneficiaries do not buy Part D coverage, so they would not have access to drugs.

Switching Part B to Part D would have a potentially very large negative effect on smaller independent practices, said Brian Callaghan, MD, MS, assistant professor in the department of neurology at University of Michigan.

Joseph V. Fritz, PhD, chief executive officer of Dent Neurologic Institute in western New York, agreed. Dr. Fritz noted that the policy proposal to shift drug distribution to third parties and away from physicians, would have a dramatic negative effect on reimbursement to independent neurology practices in the private sector and ultimately render outpatient infusion operations — such as those his clinic offers — financially unsustainable.

“This would severely restrict patient access just as exciting new breakthrough medications are becoming available in neurology,” Dr. Fritz said.

INDICATION-BASED PAYMENTS

Also, at issue is the HHS proposal around indication-based payments. In its blueprint, HHS questions whether it should pay the same amount when a drug is prescribed for off-label indications as it does for Food and Drug Administration-approved uses.

The Academy says yes — absolutely, it should. Neurologists often prescribe anticonvulsants, antipsychotics, antidepressants, and other medications off-label because they are known to benefit patients with certain neurologic conditions even though the effect is not well-studied, the AAN said in its letter to HHS. If Medicare paid them less for drugs prescribed off-label, those physicians would be financially penalized for their clinical decision-making.

THE CAP PROGRAM

The HHS also proposes a return of the competitive acquisition program (CAP). Under this program, which operated briefly several years ago, physicians could contract with a third-party CAP vendor, which purchased drugs, sent them to the physician office, and then billed the physician and the patient.

In theory, the CAP vendor would be a volume-purchaser that could negotiate for lower prices on drugs but that didn't pan out. “The initial implementation of CAP was a complete failure,” the AAN said, citing complicated regulations, poor administration, and low participation.

Dr. Fritz said he worried that the CAP program, if revived, could exacerbate the headaches that neurology practices suffer when private insurers require them to acquire drugs through specialty pharmacies. In those cases, providers spend inordinate time coordinating with the pharmacy and patient to make sure a drug is available for the patient's appointment — but the pharmacy keeps the drug margin while the physician practice receives only an administration fee.

“We think it's misguided to say that the solution is to put another high-margin industry in between the pharmaceutical company and the provider,” he said. “We don't understand the sense in doing that.”

THE AAN POSITION ON DRUG PRICES

In general, the blueprint did not sync with the AAN position statement on prescription drug prices, said Nicholas E. Johnson, MD, FAAN, chair of the Neurology Drug Pricing Task Force, which the Academy convened last year. The AAN statement, issued in May 2017, supports giving federal agencies the authority to negotiate contracts with manufacturers of covered Part D drugs; promoting transparency by disclosure of pricing information, including how drugs are priced, the prices paid by insurers, and the prices paid by consumers; prohibiting direct-to-consumer advertising of prescription drugs; and reimportation of prescription drugs from Canada when prices for those prescriptions are less expensive than in the US.

Dr. Johnson, a neurologist at VCU Health in Richmond, VA, said the Neurology Drug Pricing Task Force presented its final report to the AAN Board of Directors in September.

WHAT'S NEXT?

At this point, it is unclear which, if any, of the ideas from the Administration's blueprint, may be enacted — and whether those actions will be effective in addressing high drug prices.

Dr. Callaghan, a member of the Drug Pricing Task Force, thinks two blueprint ideas are more likely to fly than others. The first is site-neutrality, meaning the elimination of the differential that Medicare pays for drug administration services in a hospital outpatient department versus a physician office. That idea, supported in the AAN's letter to HHS, would reduce the higher out-of-pocket costs that patients incur when drugs are administered in a hospital-owned clinic.

The other is elimination of the so-called pharmacy gag clauses, in which health plans prohibit pharmacies from telling patients that the same drug or a competitor could be purchased at a lower cost outside of their Plan D insurance.

“That seems like a rule that is hard to defend and might be an easier one to pass than some of these other measures,” Dr. Callaghan said. Neither of those things — or most of the other ideas in the blueprint — will have much impact, he said.

“The real goal is not only to reduce drug prices but also the out-of-pocket costs to patients, and the big [move] would be to give Part D plans more negotiating power,” he said. “Unfortunately, this is much less likely to go through...but that would be a major game-changer in drug prices throughout the country.”

LINK UP FOR MORE INFORMATION:

• American Patients First: The Trump Administration blueprint to lower drug prices and reduce out-of-pocket costs, May 2018: http://bit.ly/NT-drugblueprint.
    • American Academy of Neurology letter to US Department of Health and Human Services Secretary Alex Azar, July 13, 2018: https://bit.ly/2zwoB8C