News & Events

Expect Approval in 2018 or Early 2019 and Deadline for Implementation Before or During 2021

In the next couple of years, the versions of the NCPDP standards used for online claims adjudication and electronic prescriptions will be changing.  Under HIPAA, CMS has the authority to name the specific version of these two standards for use across the industry.  The version currently in use for adjudication is NCPDP Telecommunications Standard D.0, mandatory since January 1, 2012, and the version currently in use for e-prescribing is NCPDP SCRIPT Standard 10.6, mandatory since November 1, 2013.

NCPDP membership started the process to request that CMS create a new rule naming a current version of each standard for use throughout the industry.  The process has progressed further for the SCRIPT Standard for e-prescribing.  On November 28, 2017, CMS published a proposed rule in the Federal Register recommending the adoption of SCRIPT Version 2017071 to become effective on January 1, 2019, at which time SCRIPT Version 10.6 would be retired.  The industry is strongly in favor of moving to the new version, but many consider the proposed deadline to be too aggressive.  During the comment period, parties, such as Surescripts, expressed concern that the January 1, 2019 deadline does not allow participants enough time to develop new software code, test the code internally and with business partners, and implement the software in thousands of practice sites.  Most commenters recommend a deadline that is 24 months from the effective date of the final rule mandating a new version of the SCRIPT Standard.  The industry is waiting for CMS to respond to industry comments and publish the final rule.

The process for naming a new version of the Telecommunications Standard is moving much slower.  At its November 2017 Work Group Meetings, NCPDP membership approved a request proposing Telecommunications Standard F2 to be the next named standard.  NCPDP submits the request via the DSMO (Designated Standard Maintenance Organizations), which forwards the request to the NCVHS (National Committee on Vital and Health Statistics) to send to CMS.  The industry is waiting for NCVHS to hold the appropriate hearing, which is scheduled for 3/26/2018.  If the hearings result in the recommendation to adopt F2, NCVHS will send a letter to the Secretary of HHS, which could lead to CMS publishing a new proposed rule naming F2 as the new standard.  When that event occurs, the industry can offer comments prior to CMS finalizing the rule.  The process to adopt Telecommunications Standard F2 is at least six months behind the process to adopt SCRIPT Standard 2017071, which means the earliest F2 could be adopted is July 2019.

However, it is difficult to predict how long these final approval processes will take.  The industry should expect final approval sometime in 2018 or early 2019.  These developments mean the new standards could be mandatory by 2021.  Pharmacy system vendors, EMR/e-prescribing software vendors, and claims processors should be preparing for these changes.  NCPDP members have access to the documentation created by membership for both SCRIPT and Telecommunications Standards, allowing for preparation to begin now.

Even though each standard will likely follow their own timeline, the possibility exists that individual development, testing and implementation of the changes to the two standards will overlap.  Vendors will need to size up each change and make sure to allocate the proper resources to meet the deadlines CMS will define in the final rules. PHSI will provide an update once CMS acts and publishes the final rules.

Update on New Standard Versions May 2018

In the final rule issued in April 2018, CMS officially adopted the NCPDP SCRIPT Standard Version 2017071 beginning on January 1, 2020 to replace the prior version 10.6.  It is interesting that CMS established January 1, 2020 as the implementation due date, a mere 20 months from the issuance of the final rule. Typically, the industry asks for 30 to 36 months to implement a new version of a standard.  This rule feels like CMS is saying to the industry that that is not good enough and to find a faster way to implement the new version.  Come Summer of 2019, it will be interesting to see how many vendors come forward asking for an extension of the deadline and the CMS response to such a request will be equally interesting.

There is also movement toward a new version of the Telecommunication Standard.  On May 17^th, NCVHS recommended the adoption of Version F2.  NCVHS asked the Secretary of HHS to expedite the rulemaking as feasible, but to also be sure to allow the industry sufficient time to comply.  Specifically, the committee asked HHS:

• To the extent possible, publish the final rule by the end of 2019.
• To provide a two year implementation timeline, using June as the compliance month.
• To require that the updated version of the standard be used by the compliance date, but allow both versions of the standards to be used for a one-year period after the compliance date to enable an effective transition period that allows the use of version D.0 and the new version F2.
• To require full compliance by the end of the third year, and only allow use of Version F2.

The Committee also asked that industry, specifically the Medicare and Medicaid programs, be given sufficient time and encouragement for thorough end-to-end testing before any go-live date.

The industry now awaits the proposed and final rule from CMS. There are probably many software vendors that are hoping the approval of a new telecommunications standard will be delayed so it doesn’t coincide with the new e-prescribing standard. The NCVHS recommendation to use June as the compliance month instead of January 1^st is a step in the right direction.  There are also rumblings that telecommunications standard version F2 is already obsolete and that during the comment period after the new proposed rulemaking is published, the industry should push for a move to a newer version that includes some recently required attributes.

See more information from the NCVHS letter to the HHS Secretary via this link: https://ncvhs.hhs.gov/wp-content/uploads/2018/08/Letter-to-Secretary-NCVHS-Recommendations-on-NCPDP-Pharmacy-Standards-Update.pdf

Stay tuned for more information about this and the expected new proposed rulemaking with approval of the telecommunications standard.

2018 Spring Newsletter

New & Improved Medicare Cards to Arrive Starting April 2018

Welcome Kinley Ruthann Ellek

The Centers for Medicare & Medicaid Services (CMS) is implementing a fraud prevention initiative that removes Social Security Numbers (SSNs) from Medicare cards to help combat identity theft.  Because of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the current SSN-based Health Insurance Claim Number (HICN) identifier will be replaced by a new Medicare Beneficiary Identifier (MBI) by April 2019.  Under the new system, for each person enrolled in Medicare, a new MBI will be assigned and a new Medicare card issued.  As with the SSN-based HICN, the MBI is confidential and should be handled and protected as Personally Identifiable Information.

The unique, alpha-numeric, randomly-generated 11-character MBI will be clearly different than the HICN number, and possess “non-intelligent” make-up (i.e., void of any hidden or special meaning).  The changeover will commence April 2018, starting with the mailing of new Medicare cards.  The mailings will be completed in phases by geographic location.  A transition period for Medicare beneficiaries to use either the HICN or MBI to exchange data will begin no earlier than April 1, 2018 and run through December 31, 2019.  Starting January 1, 2020, claims are to be submitted using MBIs, with a few exceptions pertaining to specific plans and fee-for-service claims.  Beneficiaries will not need to worry about coverage changes; the MBI will not alter Medicare benefits.

Personal identity theft affects a large and increasing number of seniors.  Individuals age 65 and older are increasingly found to be victims; incidents among this population increased from 2.1 to 2.6 million between 2012 and 2014, according to the Department of Justice.  Beyond the emotional toll, identify theft is financially taxing: two/thirds of all victims reported a direct financial loss.  Further, it disrupts lives, can damage credit ratings, and result in inaccuracies in medical records and costly false claims.  A sample of the new cards is shown below.

• The new card design was:
  • Consumer tested by Medicare beneficiaries
  • Selected among 10 possible card designs
  • Preferred due to the maintenance of a red, white and blue color palette
  • Easy to read, copy, and scan at provider offices
  • A Smaller size to match the size of a standard credit card
  • Bilingual in English/Spanish
  • Lacking a gender and signature line, which did appear on traditional Medicare cards
  • Printed on white paper for all cards, including those for Puerto Rico
• Destroy the old Medicare card
  • Once the new Medicare card has been received, patients should destroy the old Medicare card by putting it through a shredder or cutting it up, and start using the new card right away
• The new card is paper
  • Paper cards are easier for many providers to use and copy, and they save taxpayers money
  • Beneficiaries can print replacement cards, if needed
• Beware of Phone Scams
  • Callers claiming to represent Medicare or the government requesting bank account information for direct deposit
    • Medicare already has a patient’s direct deposit information and will not need to call for it because of the new ID card
  • Callers claiming to represent a bank requesting a patient’s old or new Medicare ID for direct deposit
    • Banks do not need the new Medicare ID number to complete direct deposit transactions
  • Callers claiming that they can provide the new Medicare ID card for a fee
    • The new Medicare ID cards are free and will be sent automatically at the appropriate time
• Keep your Medicare Advantage Card
  • If a patient is a beneficiary of a Medicare Advantage Plan (HMO or PPO), their Medicare Advantage Plan ID card is their main card for Medicare, so they should keep and use it whenever care is needed

The new Medicare identification cards offer greater fraud protection for beneficiaries.  The pharmacy can assist in educating patients and caregivers to ensure a smooth transition.

2018 Spring Newsletter

New NCPDP Standards Up for CMS Approval

Welcome Kinley Ruthann Ellek

On behalf of the entire PHSI team, our heartfelt congratulations to Ashley and George Ellek.  They are the proud parents of a beautiful baby girl, Kinley Ruthann.  Kinley was born on Tuesday, February 20^th at 12:07 am, weighing 9lbs 1 oz and 20.5 inches long.  The family is tickled pink with the birth of their first child.

2018 Spring Newsletter

New NCPDP Standards Up for CMS Approval

New & Improved Medicare Cards to Arrive Starting April 2018

PHSI President Tim Kosty and Vice President Don Dietz contributed to the January/February 2018 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Tim and Don identify the expectations for 2018 including generic deflation and vertical integration through mergers and acquisitions.

Click here to read Tim and Don’s article entitled “2018 Expectations”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

PHSI Vice President Don Dietz presented at the American Society for Automation in Pharmacy (ASAP) 2018 Annual Conference.  Don discussed new revenue streams for pharmacies. Click here to view Don’s presentation slides. You can access all of the 2018 ASAP Annual Conference presentations at http://www.asapnet.org.

Although discount generic lists were the centerpiece of many retail pharmacy advertising campaigns in the early 2010s, we rarely hear pharmacies tout their existence today.  Instead of being front and center on retail pharmacy webpages, discount generic lists are now embedded deeper within the websites, if listed at all.  PHSI first looked at the changing landscape of discount generic programs three years ago in our Winter 2015 Newsletter.  Since then, PHSI has continued to track the product offerings on these lists and noted decreasing or stagnant offerings.

Although generic drug pricing is currently in a deflationary period, pharmacy chains have not increased the number of products listed on their discount generic lists.  In the past, rising generic costs made the inclusion of many products unsustainable, but for many generics, this is no longer the case.  PHSI has tracked the discount generic programs of major pharmacy chains since 2012 and found that all chains have decreased the number of medications offered.  The chart below illustrates the annual changes in the number of included drugs.

Walgreens still has the most robust generic drug program, with approximately 537 drugs included in 2017, while CVS has essentially discontinued their discount generic list.  CVS moved to a new “Reduced Rx Savings Program”, which only includes three Novolin insulin products.  While some pharmacy discount generic lists contain niche products, 124 drugs appear on all eight pharmacy lists.  These drugs are commodity generics and include meloxicam, metformin, lisinopril, amoxicillin, benazepril, citalopram, and clonidine, among others.  At acquisition costs of pennies per unit, these products can still provide modest revenue and a positive gross margin.

With the increasing prevalence of high deductible plans, we could see a rise in the popularity of discount generic lists.  High deductible health plans are forcing patients to become more price-driven in their search for pharmaceuticals, as flat-dollar copays are replaced in the deductible stage.  Stakeholders should expect patients in plans with a prescription deductible to behave more like cash-paying patients versus traditional commercially insured patients.  Competitive cash pricing will appeal to these patients.

Despite modest attention from patients in prescription deductible plans, will we see a resurgence in $4 lists?  PHSI’s answer… probably not.  While Walmart’s $4 list is an enticement to get patients into their stores, pharmacy chains do not make enough dollar profits on these programs to expand them.  Pharmacies analyze their PBM reimbursement rates when considering new candidates for discount generic lists or for eliminating current products.  With 90+% of drugs being reimbursed via third party insurance, pharmacies do not want to change their Usual and Customary (U&C) pricing to invoke the “lower of” clause in their PBM contracts, reducing the profitability on the vast majority of their prescriptions.  PHSI will continue to monitor discount generic drug lists and publish updates identifying changing market strategies.

2018 Winter Newsletter- 2017 New Drug Approvals

2017 had the most drug approvals this decade, more than double the number approved in a disappointing 2016.  The FDA approved 46 new molecular entities and many other approvals for new indications, dosage forms, and formulations.  The following chart depicts the number of new drug approvals in recent years.

Trends in Approvals

Oncology

Oncology is the therapeutic category with the most drug approvals in 2017.  The FDA approved 11 new drugs for different forms of cancer:  Aliqopa, Alunbrig, Bavencio, Besponsa, Calquence, Idhifa, Imfinzi, Kisqali, Nerlynx, Verzenio, and Zejula.

Neurology

Neurology increased from four in 2016 to seven in 2017.  The new medications for neurological conditions are Ingrezza for tardive dyskinesia, Austedo for chorea associated with Huntington’s disease, Brineura for Batten disease, Emflaza for Duchenne muscular dystrophy, Ocrevus for multiple sclerosis, Radicava for ALS, and Xadago for Parkinson’s disease.

Inflammatory Conditions

Two new treatments for plaque psoriasis, Siliq and Tremfya, and one treatment for rheumatoid arthritis, Kevzara, were approved in 2017.

Diabetes

Ozempic and Steglatro were approved for patients with Type 2 diabetes in 2017, up from one new drug approval in 2016 (Adlyxin).

PHSI analyzed the FDA approvals and categorized them by approval type, indication, and other factors, as shown in the following table.  PHSI identified drugs which were considered First-in-Class, and those that are Drugs for Rare Diseases, also known as orphan drugs.  2017 was a big year for orphan drugs, representing nearly 40% of new drug approvals.

PHSI segmented approvals by timing considered by the FDA including Fast Track, Breakthrough Therapy, and Accelerated Approval.  In some cases, more than one accelerated designation was employed to help bring the drug to market.

This article only contains new molecular entities approved in 2017.  To see all of the over 4,000 approvals that occurred in 2017, please visit the FDA’s Drugs@FDA website.

Sources:

U.S. Food and Drug Administration.  “Novel Drug Approvals for 2017.”  Last Updated January 11, 2018.  Available https://www.fda.gov/Drugs/DevelopmentApprovalProcess/DrugInnovation/ucm537040.htm.  Accessed January 11, 2018.

U.S. Food and Drug Administration Center for Drug Evaluation and Research.  “Advancing Health through Innovation:  2017 New Drug Therapy Approvals.”  January 2018.  Available https://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ReportsBudgets/UCM591976.pdf.  Accessed January 11, 2018.

2018 Winter Newsletter- $4 Generic Lists: A Declining Proposition

PHSI President Tim Kosty and Vice President Don Dietz contributed to the November/December 2017 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Tim and Don identify a detailed list of the top 20 key pharmacy areas that would be opportunities for virtual reality training.

Click here to read Tim and Don’s article entitled “Training Support with a New Technology Solution”. You can read full versions of current and past ComputerTalk issues at http://www.computertalk.com/issue-archive.

In the past year, there has been increasing interest in and awareness of Authorized Generics (AGs) by supply channel participants.  Several manufacturers have launched AGs before equivalent ANDA generics have been approved.  Despite the increasing prevalence of AGs, Pharmacy Healthcare Solutions, Inc. (PHSI) recently surveyed 200 pharmacists and uncovered that two thirds could not define an authorized generic.  This article should provide pharmacists with additional insights into authorized generics.

According to the FDA, an authorized generic is defined as “an approved brand name drug that is marketed without the brand name on its label. Other than the fact that it does not have the brand name on its label, it is the exact same drug product as the branded product.”  Authorized generics enable innovator manufacturers to sell their product via another NDC number as a generic.  The AG is sold at a different, lower price than the approved innovator (NDA) product.  Authorized generics are most commonly sold via their generic or chemical name, although they can also be sold as branded generics (e.g. oral contraceptives).

Authorized generics are made under the same process as the originator brand and generally have the same size, shape and markings.  Their inert components and excipients are also the same as the innovator, unlike ANDA generics.  A comparison of brand, AG, and ANDA drugs can be seen in the chart below.

Because of their similarity to the brand product, substitution laws look favorably on AGs.  In its preamble[1], the FDA Orange Book states that:

“Any drug product in the Orange Book repackaged and/or distributed by other than the applicant (e.g., an authorized generic) is considered to be therapeutically equivalent to the applicant’s drug product even if the applicant’s drug product is single source or coded as non-equivalent (e.g., BN). Also, although not identified in the Orange Book, distributors or repackagers of an applicant’s drug product are considered to have the same code as the applicant.”

For states that use the Orange Book for generic substitution guidance or list it as a reference source, pharmacists should be able to substitute an AG for the innovator product, just like an A-rated ANDA generic drug would be substituted.

Pharmacists should remember that AGs receive the same Orange Book code as their innovator product.  Generally, this means that both the AG and innovator are A-rated.  Recently, however, AGs have been introduced for non-A-rated innovator products.  This can occur when AGs launch prior to the availability of an ANDA generic.  In this case, the innovator product would be “Not Rated”, or NR, and the AG would also receive a “Not Rated” rating.

A second scenario can occur when the innovator product is B-rated.  This happens when two brand products have been approved via the 505(b)2 process for the same active ingredient, strength, and route of administration.  Because both brand products are pharmaceutically equivalent but not bioequivalent, an Orange Book B rating is assigned to these brands, indicating that the brands are not interchangeable.  Because the innovator is B-rated, an AG launched to this product would also be B-rated.  According to state laws where the Orange Book is referenced, in these situations, the AG is still substitutable for its innovator product, as the AG is identical to the brand, innovator product, despite the B ratings.

An example of this can be seen with Mylan’s Epinephrine Auto Injector (NDC 49502-0102-02).  The innovator, EpiPen, is a BX-rated product to Adrenaclick (Amedra Pharmaceuticals).  Because EpiPen is BX-rated, its Mylan AG also has a BX rating.  However, the Mylan AG is still an appropriate generic substitute for EpiPen.  Because the EpiPen is BX-rated to Adrenaclick (Amedra Pharmaceuticals), the Mylan AG is not a generic substitute for Adrenaclick.   Anecdotally, we have heard of pharmacists concerned about dispensing the BX-rated Mylan AG for Mylan’s EpiPen because of the BX rating.

PHSI performed a review of all authorized generic agents listed in the Medi-Span drug compendia and found:

• There are 852 unique AG prescription products listed. Based on multiple package sizes, this amounts to a total of 1,169 NDCs.
• Of the 852 unique AGs, approximately 3% have branded generic names (e.g. Ocella, Lopreeza, DermacinRx), while the remaining 97% of products are chemically named.
• Greenstone is the most frequently seen labeler in the AG space (242 AG NDCs), followed by Sandoz (154 AG NDCs), and then Prasco (106 AG NDCs).
• Although not directly related to the purchase price, when looking at the current AGs in the market where the brand product is still active, the published WAC price is approximately 48% lower than the WAC price of the corresponding brand.

AGs provide alternative generic supply options for all stakeholders.  Pharmacy costs decrease for generics as the number of suppliers increase.  Patient satisfaction with generics may increase, as product appearance differences are minimized with an AG.

Although many benefits can be seen by using an AG, cost is often the deciding factor when pharmacies choose a preferred generic manufacturer.  When pharmacy chains use a wholesaler source program for purchasing, the wholesaler decides on the preferred generic. A preferred generic helps to ensure product uniformity across pharmacies in a chain and enables pharmacies and buying groups to negotiate competitive prices.  Authorized generics may be the preferred generic product if their manufacturer is the successful bidder.  Even if they are not the preferred generic, AGs may be a purchasing option in most wholesaler systems.  Interestingly, PHSI has found that most pharmacy dispensing systems do not flag products as authorized generics or have specific fields in their drug file that contains this information.

The recent awareness of AGs at a consumer level (epinephrine auto-injector AG and salmeterol/fluticasone inhaler) may lead to consumer inquiries about these products.  PHSI hopes that this overview will enable dispensing pharmacists to address questions and make informed product selection decisions when evaluating generic product options for their patients.

[1] United States Food and Drug Administration (FDA); Approved Drug Products with Therapeutic Equivalence Evaluations; 37^th Edition; page 11; https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/UCM071436.pdf

2017 Fall Newsletter- Payers Stepping Up to Tackle the Opioid Epidemic

Addressing the opioid epidemic is a key issue facing much of America.  President Trump recently stated that “this epidemic is a national health emergency.  As Americans, we cannot allow this to continue.”  To combat this epidemic will require a multi-faceted approach involving communities, law enforcement, prescribers, pharmacies, patients, and payers.  With stakeholders facing a heightened urgency to act, payers are increasingly looking for new ways to limit the overprescribing of prescription opioids.  In the past year, CVS Health, Express Scripts, Optum, and Cigna have all made recent statements and taken steps to limit patient access to opioid prescriptions.

The PBM CVS Health was the first to announce that they would limit opioid prescriptions to a 7-day supply for patients new to pain therapy.  Under the new plan, CVS will also limit the daily dose of opioids based on their strength and require use of immediate-release versions before extended-release options.  These benefit design changes will apply to CVS commercial, employer group, and Medicaid plans.

Express Scripts soon followed suit, limiting patients new to opioid therapy to a 7-day supply, regardless of the quantity prescribed.  Physicians prescribing an extended-release opioid to a first-time user will need to complete a prior authorization, incentivizing immediate-release product use first.  Similarly, the daily dose will be limited to 200 mg morphine-equivalent dose (MED), and prescribers wishing to have patients on higher doses will need to submit a prior authorization request.  The milligram-morphine-equivalent (MME) is a value assigned to a specific opioid to represent its relative potency, while the MED is the per-day sum of the MME potency score of all opioids a patient is prescribed.

Like the other PBMs, Optum is implementing a stricter program and limiting patients new to opioid therapy to a maximum of 49 MED per day.  New opioid patients can fill a maximum of two 7-day supplies within a 60-day period.  Non-cancer patients already taking opioids will be limited to a maximum of 90 MED per day with two fills in 60 days.

The American Medical Association is against the new PBM policies, with some physicians stating that the PBMs are “practicing medicine” and intruding on the doctor-patient relationship.  Other physicians welcome the monitoring, as they are unaware of patient relationships with multiple physicians and appreciate the oversight.  Although most physicians are appropriately monitoring opioid use, the new PBM plans will likely force other physicians to prescribe smaller quantity prescriptions for patients new to therapy.  Most importantly, the new PBM opioid plans have been shown to work.  Compared to the control group, an analysis of 106,000 patients enrolled in the Express Scripts pilot program showed a 38% reduction in hospitalizations and a 40% reduction in emergency room visits.

Many of the parties involved in addressing the opioid crisis are investing funds to curb abuse and address this societal issue.  Many pharmacies and physicians have already paid to integrate accessing Prescription Drug Monitoring Programs (PDMPs) into their software systems.  PHSI expects these PBM-set opioid prescription limits will become standard claims processing edits, but PBMs will likely recoup funds for processing any additional prior authorizations associated with the programs.

Cigna recently announced that they will stop covering OxyContin^® prescriptions in “an attempt to reduce opioid use amid a nationwide abuse epidemic”.  This change applies to brand-name OxyContin.  No additional limits are placed on generic oxycodone or similar opioids.  Cigna recently signed a “value-based contract” with Collegium Pharmaceutical for Xtampza^® ER, an oxycodone equivalent with abuse-deterrent properties.  Was this change made due to the lower street-value of Xtampza^® compared to brand OxyContin?  Skeptics note this change appears to be financially and rebate-motivated versus a true patient-centered opioid reduction program.  It will be interesting to see decision outcome reports on Cigna’s change.

PHSI is hopeful that the new PBM quantity limits will curb opioid abuse.  These programs will not likely impact patients already on opioids at doses less than 200 mg MED/day, but will instead focus on new-starts.  With prescription opioids serving as gateway drugs, these new programs will hopefully prevent patients from escalating to heroin and other illicit substances.

2017 Fall Newsletter- PHSI Analysis of Authorized Generic Drugs