NCPA Advocacy Center Update – Week Ending January 19, 2018

HHS offers assurance on continued Medicare, Medicaid payments despite government shutdown: The Department of Health & Human Services (HHS) published guidance hours ahead of the lapse in Congressional appropriations, saying that “the Medicare Program will continue largely without disruption,” “States will have sufficient funding for Medicaid through the second quarter” and “CMS will maintain the staff necessary to make payments to eligible states from remaining Children’s Health Insurance Program (CHIP) carryover balances.” Services that would not continue include CDC’s annual seasonal flu program and outbreak detection. Amid a disagreement over immigration policy, the Senate could not muster sufficient consensus to approve a short-term funding measure. The House earlier passed a bill that would extend government funding through Feb. 16 and re-authorize CHIP for six years.

CMS hears support from NCPA, Congress, beneficiary groups on pharmacy DIR proposal: The comment period for CMS’ Part D proposed rule closed Jan. 16, before which NCPA, Members of Congress, beneficiary advocates and a range of other stakeholders commented in favor of the agency’s announced consideration requiring pharmacy DIR fees to be accounted for at point-of-sale instead.

  • NCPA comments strongly supported the proposed rule; cited past research; and included a new survey of independent community pharmacy owners providing fresh evidence of the harm from retroactive pharmacy DIR fees. They also argue in support for a range of additional, important provisions related to pharmacy such as specialty drugs, Part D contracting practices and home delivery.
  • Senators Capito and Tester extended to Jan. 23 the deadline for their letter to CMS and continue to add new signatories. Urge your Senators to join the letter.
  • 80 U.S. Representatives wrote a bipartisan letter to CMS in support of the pharmacy DIR fee provisions in the proposed rule. Signatories included 10 Energy & Commerce Committee members and six sitting Chairmen/Ranking Members. Separately, an opposition letter to CMS circulated by Reps. Peter Roskam (R-Ill.) and Bill Johnson (R-Ohio) emerged and was met with swift opposition by NCPA, other pharmacy stakeholders and PhRMA.
  • Eight beneficiary advocacy organizations wrote CMS in support: The signatories are The AIDS Institute; Alliance for Retired Americans; American Federation of State, County and Municipal Employees (AFSCME); Coalition of State Rheumatology Organizations (CSRO); GIST Cancer Awareness; HealthHIV; National Multiple Sclerosis Society; National Organization for Rare Disorders (NORD); and Patients for Affordable Drugs. In addition, other beneficiary advocates included supportive arguments in their own comments to CMS.
  • New study finds savings from CMS proposal on rebates, pharmacy DIR fees: PhRMA’s comments to CMS included a new Milliman analysis. It examined potential outcomes if CMS required accounting for half of manufacturer rebates and all pharmacy price concessions at POS. It forecast beneficiary savings between $4 to 28 billion over 10 years and, ultimately, net savings of up to $73 billion for the government as plan sponsor/PBMs respond over time to better aligned incentives in Part D. PBM advocates submitted comments to CMS in opposition to the DIR changes while supporting other provisions in the rule.

FDA issues 2018 Compounding Priorities Plan: This week the FDA issued its 2018 Compounding Policy Priorities Plan, which outlines how the agency will implement certain key aspects of the Drug Quality and Security Act (DQSA). NCPA is carefully reviewing the Plan as well as final guidance concerning 503a pharmacies and what constitutes “essentially a copy” when compounding.  We will provide further info to members soon.

The 2018 Compounding Policy Priorities Plan specifically details how the FDA will:

  • address manufacturing standards for outsourcing facilities;
  • regulate compounding from bulk drug substances;
  • restrict compounding of drugs that are essentially copies of FDA-approved drugs;
  • solidify the FDA’s partnership with state regulatory authorities; and
  • provide guidance on other activities that compounders undertake.

For more information:

2018 Compounding Policy Priority Plan

Compounded Drug Products That Are Essentially Copies of a Commercially Available Drug Product Under Section 503A of the Federal Food, Drug, and Cosmetic Act

Compounded Drug Products That Are Essentially Copies of Approved Drug Products Under Section 503B of the Federal Food, Drug, and Cosmetic Act

Mixing, Diluting, or Repackaging Biological Products Outside the Scope of an Approved Biologics License Application

New analysis of tax cut clarifies pharmacy impact: NCPA consulted with and received permission from leading community pharmacy accounting firm Sykes & Company, P.A. to share its attached analysis of the recently enacted tax law. It features the example of a hypothetical pharmacy owner to illustrate how specific provisions supported by NCPA within the law can benefit community pharmacy owners. In addition, it flags the law’s revised treatment of a deduction used by some compounding pharmacies.

Hearings keep opioid epidemic in Congressional focus: The House Ways & Means Oversight Subcommittee examined CMS’ approach to the opioid epidemic. Lawmakers focused on enhanced PDMP efforts, implementation of a “lock-in” program in Part D and debated CMS’ announced guidance to states concerning Medicaid work requirements. Separately, the Senate Homeland Security & Government Affairs Committee held a hearing to consider conflicting viewpoints about whether Medicaid expansion has contributed to the epidemic or not. Also this week, Acting HHS Secretary Hargan extended the national health emergency declared in response to the opioid epidemic.

Senate Finance Committee approves nomination of Azar as HHS Secretary: The panel voted to advance the nomination of Alex Azar to be Secretary of the Department of Health and Human Services.  The vote was 15-12 with Senator Carper (D-DE) joining all committee Republicans in voting aye. The nomination proceeds to the Senate floor for consideration by the full chamber.

GAO report renews scrutiny on Part B drug reimbursements: GAO examined Medicare’s share of the Part B drug market in 2015, noting the program spent about $26 billion on Part B drugs that year. The GAO notes that the way Medicare reimburses for most Part B drugs – with payment equal to the average sales price plus an additional 6 percent – lessens manufacturer incentives to price drugs competitively in cases where Medicare represents a large market share and that single manufacturers “may have greater ability to increase a drug’s price without seeing sales decline.” Potential reforms to Part B reimbursement were also a topic of discussion during a recent hearing on the Azar nomination.

CMS extends special open enrollment for Puerto Rico, U.S. Virgin Islands: Enrollment in Part D plans and federal exchanges was extended through March 31st in response to the islands’ continued hurricane recovery. 

In the States:

  • NCPA focused on state Medicaid managed care cuts: Here are five important ways NCPA is supporting the state work and reaching out on the federal level:
    • We’ve discussed this issue with CMS to elevate it and to point out potentially unfair trade practices.
    • We’re gathering aggregated data on the cuts, as requested by CMS, to help them gauge the extent and effect of the cuts.
    • We’ve developed and shared a sample letter and tips for NCPA members to use to engage elected officials and policymakers in investigating the issue.
    • We’re working with several states on 2018 legislation that would apply the state’s MAC law to MMC and/or require MCOs to use fee-for-service rates as a reimbursement floor.
    • We’re briefing members of Congress and Hill staffers on MAC issues and the need for H.R. 1316, our federal MAC bill.
    • Read more in the Jan. 19 NCPA Executive Update. Related, the Pennsylvania Pharmacists Association reported progress in response to a campaign by PPA and its state partners (look for more detail in Monday’s qAM).
  • NCPA attends briefing on the Maryland Insurance Administration’s (MIA’s) Pharmaceutical Services Workgroup Report: The Maryland House of Delegates Health and Government Operations Committee examined the report, which addressed issues related to three bills that were introduced during the 2017 session. The three bills addressed MAC transparency, specialty drugs, and DIR fees. Over the course of about five months, the Workgroup sought to find common ground between various stakeholders, including independent pharmacists and PBMs. According to the report, no common ground was found. Those testifying during the hearing were three officials from MIA, including Commissioner Al Redmer, MPhA’s Aliyah Horton, Dennis Rasmussen, two independent pharmacists, a PCMA representative, and a representative from Cigna. The delegates’ questions showed they are aware of PBM practices and the issues with MAC pricing, including recent cuts, and particularly the lack of transparency and the fact that PBMs conduct the appeal (one delegate mentioned “the fox guarding the henhouse”). The Workgroup sought to determine whether Maryland’s MAC laws are working properly. Since the law’s passage in 2015, MIA has received too few complaints from pharmacies to make that determination. MIA representatives at the hearing acknowledged that the lack of complaints is (at least in part) a result of pharmacists’ fears of retaliation due to non-disclosure provisions in contracts with PBMs.
  • New Jersey Coalition Achieves State PBM Reform: On Jan. 15, outgoing N.J. Gov. Chris Christie signed a major pharmacy benefit manager reform bill into law. The law, A4676/S3185, regulates PBMs operating in the state by placing them under the authority of the N.J. Department of Banking and Insurance. The new law also prohibits prior authorizations for any prescription drugs unless an alternative drug of lower cost and equal quality and effectiveness is available. This law would not have passed without the combined efforts and teamwork of the Independent Pharmacy Alliance, New Jersey Pharmacists Association, Garden State Pharmacy Owners, NJ Indian Business Association, Indo-American Pharmaceutical Society, and NJRxPAC. Congrats to them on this success.
  • NCPA submits comments on Florida Medicaid proposed rule: NCPA submitted comments supporting the Florida Agency for Health Care Administration’s proposed prescribed drug reimbursement methodology for the Medicaid fee-for-service delivery system. The proposed rule included a definition of actual acquisition cost as the NADAC for each drug, or WAC if NADAC is unavailable, and a professional dispensing fee of $10.24. The Florida AHCA met this week to discuss the proposed rule and will be moving forward with the proposed reimbursement methodology. 

Congrats Susan Pilch on new position, NCPA service: Susan has accepted a new position of Senior Vice President of Law and Policy at 340B Health. Thanks for all your work and service and best wishes on the new position. You can send her a note at As a result, NCPA is recruiting qualified candidates to join our Policy & Regulatory Affairs team.