HealthCare Roundtable e-News – March 12, 2019

Senate Finance Chairman Grassley Takes Stand Against Big Pharma on CREATES Act

Senate Finance Chairman Chuck Grassley (R-Iowa) stated last week that he will not walk back generic drug legislation, known as the CREATES Act, by negotiating with the pharmaceutical industry and instead will stick to the original version as planned without the recommended modifications from the industry. 

The bill, which is designed to crack down on drug companies intentionally inhibiting competition in the generic drugs space, has been a priority for Grassley over the last two years. 

“Let me tell you, big pharma is talking out of both sides of their mouth,” said Grassley in reference to the CREATES Act. “They want to adjust it to satisfy them. We’re moving ahead with the way it is right now.” 

Several major drug companies indicated during recent committee hearings that there were avenues for them to support a modified version of the bill. PhRMA CEO Stephen Ubl claimed he compromised on the new language with the generic drug lobby, the Association for Accessible Medicines, which the group has denied the existence of a deal.

Trump’s Proposal to Ban PBM Rebates Gains Support from Senate Leaders

The Trump administration’s proposed ban on pharmacy benefit managers drug rebates in Medicare Part D and Medicaid managed care has garnered support key U.S. Senate members. Senate Finance Committee are in the process of drafting legislation to push rebate transparency through reporting requirements, sources say

Senators on both sides of the isle have criticized the lack of clarity around rebates. In a statement last week, Sen. John Cornyn (R-Texas) suggested that “it’s hard to get the facts and see exactly where the money goes.” Sen. Mike Braun (R-Ind.) offered a proposal last Tuesday to extend the administration’s proposed ban to the commercial market. 

While some pharmaceutical companies have expressed their support for the administration’s proposal saying it would lower drug list prices if made final, others have been more reluctant to do the same; JC Scott, president and CEO of the Pharmaceutical Care Management Association (PCMA) stated that Braun’s bill “appears to do absolutely nothing to address the root cause of the problem: high list prices that only the drug manufacturers have the power to set.”

MedPAC Considers Reference Pricing, Binding Arbitration Policies for Part B

In an effort to curb Part B drug prices, the Medicare Payment Advisory Commission (MedPAC) debated reference pricing and binding arbitration as potential solutions at a public meeting last week. The goal of the meeting was to weigh each solution in order to expand on the commission’s proposed reform package, which had recommended that consolidated billing codes be implemented until the providers fully moved over to a drug value program. 

The Trump administration has been vocal in its support for international reference pricing, while some House Democrats have argued arbitration to be the preferred avenue. According to the MedPAC report, reference pricing would cover opportunity areas with limited competition between medications with similar clinical uses, whereas the commissioners showed some concern about the operational costs associated with binding arbitration in Part B. 

“I think there is some real danger in treating similar drugs for payment purposes as equivalent for effectiveness and side effects,” said MedPAC Commissioner Kathy Buto. David Grabowski, Ph.D., a health policy professor at Harvard Medical School, suggested the commission could consider allowing a price negotiation prior to arbitration to counter the group’s concerns.

FDA Looks to Reform Biologics Naming Process

The FDA issued a draft guidance last week that will require only new biologic products to add suffixes at the end of their name. The guidance explains the agency’s intentions to discontinue modifying the names of previously licensed or approved biological products under the Public Health Service Act, as well as to cease all practices of applying naming conventions to proper names of transition biological products. 

Brand biologic drug makers applauded the FDA’s decision, while biosimilar groups including the Biosimilars Forum disagreed with the move. 

“This decision will disincentivize biosimilar uptake at a time when the government should be implementing policies that incentivize the use of biosimilars, as they are one solution to help attack rising healthcare costs,” the forum said. Other biosimilars groups have also voiced their disapproval of the use of suffixes in general. (InsideHealthPolicy). 

FDA commissioner Scott Gottlieb who is stepping down validated the agency’s decision, justifying the move as a cost-saving initiative and asserting that backtracking on biosimilar names “would run directly counter to the goals of access and affordability that underlie the biosimilars program,” he said.