PHSI Newsletters

Last Call for USP Chapter <800>

On December 1, 2019, changes will go into effect that impact pharmacies, pharmaceutical manufacturers, and wholesalers. The United States Pharmacopeia (USP) introduced its new chapter <800> on handling hazardous drugs. Regulatory agencies worldwide will begin enforcement on December 1, 2019.

The USP initially announced a June 1, 2019 rollout for chapter <800>, but a six-month extension has provided pharmacies, long-term care facilities, and other affected entities increased time to bring their facilities and standard operating procedures up to code.

Several important considerations exist for pharmacies and other entities that handle hazardous drugs:

  • New requirement for externally vented, negative pressure labs for manipulations (other than counting or repackaging) of hazard drugs (HDs)
    • Splitting/crushing (HD) tablets no longer allowed in regular workspace
  • New requirements for designated areas for receipt, unpacking, and storage of HD

For more information on compounding and handling hazardous drugs, full chapters are available for free download at: https://www.usp.org/compounding.

While facilities dedicate significant energy, time, and resources into finalizing compliance, new regulations on hazardous waste (HW) disposal from the Environmental Protection Agency (EPA) have already gone into effect. August 21, 2019 marked the federal effective date of EPA’s Resource Conservation and Recovery Act (RCRA) Part 266 Subpart P policy on hazardous waste pharmaceuticals.

New requirements for HW management under Subpart P may prove costly for both pharmacies that produce over 220 lb. of hazardous waste in one calendar month and for manufacturers that function as reverse distributors.  Key takeaways include:

  • Sewer prohibition: HW pharmaceuticals may not be disposed of down the drains or flushed
  • Requirements for EPA-approved HW transporters for shipment of non-creditable HW pharmaceuticals
    • Non-creditable HW pharmaceuticals —defined as pharmaceuticals that do not have a reasonable expectation to be used/reused or reclaimed—must be shipped using an EPA-approved HW transporter
    • Potentially creditable HW pharmaceuticals—those in original packaging, undispensed, and expired less than one year–have a reasonable expectation to receive manufacturer credit. Potentially creditable products can be shipped from healthcare facilities using common carriers (e.g., UPS, USPS, FedEx)
  • New standards for residues remaining in “empty” containers:
    • “Empty” containers are defined as empty vials, syringes, unit-dose, and stock/dispensing bottles smaller than 1 liter or 10,000 pills
    • Residues of empty containers are not regulated as HW, but containers larger than these sizes are deemed as HW.

PHSI’s view is that manufacturers and distributors of bulk package-sized hazardous drugs, such as warfarin and spironolactone, should take a closer look at the new EPA and USP <800> regulations. Buyers may become more hesitant to purchase large quantities of hazardous pharmaceuticals. Hazardous drugs deemed broken/leaking, repackaged, dispensed, and expired past 1 year automatically become classified as non-creditable HW. An increase in generated hazardous waste each month may result in a healthcare facility becoming required to abide by all sections of Subpart P.  Subpart P went into effect on Aug 21, 2019 in Iowa, Alaska, Indian Country, and some U.S. territories. Remaining states have until July 21, 2021 to adopt the new regulations. Check with your state for specifics.

PHSI would like to thank our student, Carissa Dolan, LECOM Pharm.D. Candidate, for her contributions to this article.

 

Posted November 2019

2019 Fall Newsletter:

2020 Formulary Exclusion Lists

2020 Formulary Exclusion Lists

2020 Formulary Exclusion Lists:

A Review of Express Scripts, CVS Caremark, and OptumRx

It’s that time of year again, PHSI’s annual review of the PBM formulary exclusion list updates!  Express Scripts (ESI), CVS Caremark, and OptumRx have published their formulary exclusion lists for 2020.  Based on PHSI’s calculations, OptumRx leads the way with 246 new formulary exclusions.  Of those 246 exclusions, 169 (69%) were for brands that have covered generic equivalents.  CVS Caremark added 100 new exclusions; 32 of those 100 exclusions (32%) were for brands with available generics.  ESI will exclude an additional 35 drugs, 13 (37%) of which are multisource brands.  The new 2020 exclusions, as researched by PHSI, are as follows:

Chart 1 New Formulary Exclusions

Excluded multisource brands with available generics are as follows:

Chart 2 New Formulary Exclusions - Brands with Generics

During the review, PHSI made the following observations:

  • OptumRx seemed to pay more attention to the topical corticosteroids class this year, excluding an additional 13 agents that may not have specific generic equivalents. Examples of excluded agents include Psorcon cream, Ultravate lotion, and Cloderm cream.
  • With the 2020 additions, OptumRx more than tripled the number of drugs on its list of excluded brand-name medications with generic equivalents. The total number of drugs on OptumRx’s list of excluded brand-name medications with generic equivalents is now approximately double that of ESI’s list.  Optum indicates that “these brand-name medications have been identified as having available generic equivalents covered at Tier 1 on the formulary.”  This change may signal OptumRx’s increased commitment to reduce unnecessary drug spend.
  • ESI seemed to focus on the hematological class for 2020, with approximately 14% of the new exclusions coming from this category. ESI’s list of agents excluded for 2020 includes Jadenu, Jadenu Sprinkle, Nuwiq, Granix, and Mulpleta.  PHSI believes that ESI may be leading the PBM charge as it relates to hematological agent exclusion.  With many new hematological products expected to launch, we anticipate that this will become a more tightly controlled category in subsequent years.
  • CVS focused heavily on the dermatological category for 2020 exclusions, with an additional 19 dermatology agents being added to the exclusion list. Examples of excluded agents include mupirocin cream, Acanya, Finacea Gel, and fluocinonide cream 0.1%.
  • CVS is making a strong push to exclude high cost dietary supplement agents. Twenty-five dietary supplements were added to the exclusion list for 2020, with folic acid being the preferred on-formulary alternative.  Because these products are not FDA-approved and often have high costs, this can be an effective way to manage plan drug spend.  Examples of excluded dietary supplements include Xyzbac, Mebolic, Dexifol, and Vasculera.
  • CVS Caremark is becoming manufacturer-specific in their formulary exclusions; they note five products where specific NDCs are excluded. For example, CVS’s formulary excludes benzonatate NDCs 69336-0126-15 and 69499-0329-15.  Excluded NDC 69336-0126-15 has a per-unit WAC of $71.42, while pharmaceutically equivalent GPI competitors have WAC pricing of $2.20 per unit.  For a product that may be reimbursed at a non-MAC rate, choosing the correct manufacturer’s product can have impactful reimbursement consequences for payers.
  • With the launch of lower cost generic tadalafil, all three major PBMs have chosen to exclude brand Cialis in 2020.
  • As mentioned in our 2019 Exclusion List Review, ESI continues to use indication-based management for the “inflammatory conditions” drug class. Reviewing the updates to that category, Inflectra and Renflexis are no longer preferred agents for 2020.

Each of the major PBMs has taken a different approach to managing drug spend in 2020 and formulary exclusions continue to play a major role.  PBMs exclude products because of clinical, financial, and humanistic reasons.  They are making value judgments and have decided covering these products is no longer warranted.  This article represents PHSI’s analysis of publicly available information regarding the three PBMs’ formulary exclusion lists for 2020.  Readers are encouraged to assess the lists for themselves.  Links to the exclusion list source information are provided below.

 

Posted November 2019

2019 Fall Newsletter:

Last Call for USP Chapter <800>

The Importance of PBM Contract Review Post Implementation

One of the biggest responsibilities of health plans and self-insured employer groups is selecting a PBM partner.  When that selection is being made, health plans and large self-insured employers frequently undertake an RFP (request for proposal) process, narrow down the candidates, and then perform a diligent review of the finalists.  Once a PBM is chosen, the health plan or employer group reviews and negotiates contract terms to finalize an agreement.

Health plans or employer groups enter into PBM contracts that make several guarantees, specifically as it relates to rebates, PBM operational performance (guarantees), and reimbursement rates.  Although a diligent review should be performed before the agreement is signed, what steps are health plans and employer groups taking after the agreement is in place to ensure that the contract terms are being met?  When dealing with PBM contracts, it is imperative that guarantee language is clearly defined.  A regularly scheduled review of the data is critical to ensuring contract obligations and guarantees are being met or exceeded.

When rebates are being calculated, the contract should clearly specify which claims are eligible for rebates.  Will rebates be paid on specialty drugs, and if so, how is a specialty drug defined?  Does the site of dispensing (retail vs. mail) impact the rebate?  How does the contract define a brand vs. generic drug?  Are there different rebate guarantees for 30-day vs. 90-day retail prescriptions? These are only some of the questions that should be answered in the contract language, but having well-defined terms is half the battle.  Once the contract is in place, an ongoing assessment is critical to ensure the plan performance meets the expectations.  For one of our employer group clients, this means a quarterly review of claims data and a comparison of the data against the rebate guarantee information provided by the PBM.  By monitoring the data, we proactively identify any discrepancies, estimate rebate dollars based on historical trends, and better negotiate future PBM contract extensions.  Whether the assessment is performed in-house or outsourced to consultants may depend on the individual health plan or employer group.

When evaluating reimbursement rates and effective rate guarantees, health plans and employer groups need to ensure that brand and generic drug definitions are clear.  The contract language should also include verbiage around different reimbursement scenarios.  Contracts should list what reimbursement rates will apply to single-source generics and prescriptions dispensed with different DAW (dispense as written) codes, such as DAW 5, brand dispensed as a generic.  Using the defined definitions, claims data is used to audit and ensure that the claims are being reimbursed appropriately and rate guarantees are being met or exceeded.  A review of the data can also identify scenarios that are negatively affecting the health plan or employer group, including identifying specific drugs that are having a negative financial effect.  Although some situations may be allowed under the current contract, a review can pinpoint problematic areas for future contract renegotiation discussions.

Negotiating PBM contracts with well-defined terms is crucial.  Concise contract language makes it easier to conduct post-contract audits and ensure that the PBM is meeting or exceeding the contractual terms.  Health plans and employer groups should have programs to monitor rebate guarantees, proactively identify discrepancies, and bring them to their PBM’s attention for resolution.  These reviews also assess other factors and provide insight into the PBM operations, enabling the health plan or employer group to negotiate better terms in future agreements.  PHSI has extensive experience helping health plans and employer groups evaluate PBM contracts and analyze data.  Let us know if we can help!

Posted May 2019

 

2019 Spring Newsletter:

Biologic Naming Update

Biologic Naming Update

The FDA has released “Nonproprietary Naming of Biological Products Guidance for Industry.”  This document includes guidance for both 351(a) products (original biologics) and 351(k) products (biosimilars).  Biosimilar suffixes have four letters and are devoid of meaning.  These suffixes are designed for tracking, adverse event reporting, and to aid in prescribing. Related biological products and biosimilars may have different indications for use, but pharmacists do not typically receive information on a patient’s disease state to know which manufacturers’ product to pick.  The biologic suffixes help by allowing prescribers to issue prescriptions using the correct suffix to cover the exact indication needed for the patient.

Reactions to the FDA’s guidance have been mixed.  Originally, the FDA proposed to apply the suffixes retroactively to existing biologic products.  On March 7, 2019, FDA released additional guidance on naming conventions for biologics.  The full guidance is available at: https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm632870.htm.

There are several important considerations for pharmaceutical manufacturers, pharmacies, and payers.

  • Existing biologic products that are currently FDA approved will not be assigned four-character suffixes – this is a reversal of the FDA’s previous guidance on this topic
    • Any new biologic or biosimilar introduced in the future would receive a four-character suffix.
  • New biologic products, including insulins and growth hormones (among others), will receive a four-character suffix.

PHSI’s view is that “nothing” will be sorted before “something”, so products that do not have a suffix may be listed before/above products that do have a suffix.  This means that the non-suffix originator products will likely appear before biosimilars in pharmacy systems and EMRs when showing chemical names, which may lead prescribers and pharmacists to see them before/above the biosimilar products for product selection purposes.

Beyond the chemical name field, there are EHR implications due to the RxNorm[1] listings for biologic products.  Biosimilars do not link to the original brand product in RxNorm and subsequently in electronic transactions that rely on RxCUI.  For example, each of the three available infliximab products (brand and two biosimilars) have different Generic RxCUIs[2] because of the 4 letter suffixes added to the “generic” name of the biosimilars.  So those biosimilar versions of infliximab do not link to the originator brand for product selection purposes.

From the compendia perspective, it will be interesting to see how product selection options are displayed for biologic products in the future.  Wolters Kluwer has announced that they are offering a file to help their customers determine potential substitution groups for biologic products.  Currently, compendia listings for biosimilar products do not directly link those products with the original biologic product of the same molecule.  In other words, originator biologics and biosimilars do not share a GPI or GCN.  Offerings like a substitution grouping file would provide additional insights to pharmacies, payers, prescribers, and EHRs regarding product selection options for biologics.

As biologic and biosimilar products evolve, more discussions will occur around how to properly identify specific biologic product selection options for prescribers.  For more information on the pharmacy, payer, and prescriber implications, contact PHSI.

 

[1] RxNorm, from the National Library of Medicine, “provides normalized names for clinical drugs and links its names to many of the drug vocabularies commonly used in pharmacy management and drug interaction software, including those of First Databank, Micromedex, Gold Standard Drug Database, and Multum. By providing links between these vocabularies, RxNorm can mediate messages between systems not using the same software and vocabulary.”  More information available at https://www.nlm.nih.gov/research/umls/rxnorm/.

[2] RxCUI stands for “RxNorm concept unique identifier.”  “Everything in RxNorm receives an RXCUI, which is unique to that concept. An RXCUI is essentially the “name” of a concept that computers read and understand.”  More information available at https://www.nlm.nih.gov/research/umls/rxnorm/overview.html.

Posted May 2019

 

2019 Spring Newsletter:

The Importance of PBM Contract Review Post Implementation

FDA Proposed Framework for Digital Therapeutics: “Prescription Drug-Use-Related Software”

By now you may have seen FDA’s Federal Register Notice,  “Prescription Drug-Use-Related Software”, which establishes a docket seeking public input on digital therapeutics.  The proposed framework is for discussion purposes only; it is not a draft guidance but a way for FDA to seek input from stakeholders.  The document gives insight into how FDA may approach digital therapeutics, specifically the regulation of the software’s output.  The comment period for this proposed framework document closes on January 22, 2019.[1]

PHSI’s blog has previously discussed how countless new digital therapeutic technologies are being developed.  Stakeholders including prescribers, pharmacists, payers, and patients will be impacted by labeling and compendia listings for these products and the myriad of others with drug-use-related software in development.

One of the key components of the FDA’s proposed framework is the following:

“Software that is part of a system comprising a device constituent part or is itself a device constituent part of a prescription drug-led, drug-device combination product, and such software provides a function or information that is essential to one or more intended uses of the drug-led, drug-device combination product.  In that case, if such software meets the device definition, the software would be considered part of the device that is a constituent part of the combination product and would be regulated as such.”

PHSI’s interpretation of the framework is that drug labeling regulations (i.e. the labeling requirements of the Federal Food, Drug, and Cosmetic Act) will apply to the output of the software “disseminated by or on behalf of a drug sponsor for use with one or more of the drug sponsor’s prescription drugs” because it accompanies a specific drug.

Software not accompanying a specific drug would not be regulated as labeling, “unless its categorization changes.”  If a drug sponsor licenses software that was originally disseminated by an outside company and then disseminates that software for use in conjunction with a specific drug, it would not be regulated as labeling.

The two labeling types delineated are as follows:

  • FDA-required labeling
    • Drafted by the manufacturer
    • Reviewed and approved by FDA (part of NDA, ANDA, or BLA) initially and when most changes to the labeling are proposed
    • Includes information that is “essential for a provider to make an informed decision about the risks and benefits of prescribing the drug for a patient and the information needed to safely and effectively use the drug”
  • Promotional labeling
    • “Disseminated by or on behalf of a drug’s manufacturer, packer, or distributor”
    • Not approved by FDA in advance of dissemination – submitted to FDA at time of initial dissemination or publication
    • Can be submitted to a voluntary advisory comment process prior to dissemination if the sponsor chooses*
    • Generally devised for promotion of the product
    • May have other functions in addition to promotion
    • May include printed, audio, or visual matter descriptive of a drug

* The proposed framework specifies that, “for certain prescription drug use-related software output, the Agency will recommend under the proposed framework that a sponsor use the voluntary advisory comment process prior to dissemination.”

While the output of the prescription drug-use related software is the focus of the proposed framework, it notes that the software itself is the “responsibility of the drug sponsor to ensure the reliability” of the software.  FDA points out that the function of the software could impact the output, which is considered promotional labeling.

The compendia companies publish information provided by manufacturers as well as FDA when adding a new product to their databases.  Information gleaned from the FDA-required labeling is an important component of their processes.  Each compendium may approach digital therapeutics differently.  The proposed framework document in the Federal Register specifically mentions Abilify MyCite®.  PHSI expects that other examples may include inhalers, such as the newly approved ProAir Digihaler, and injection devices that contain sensors, modules, and/or apps.  Using Abilify MyCite as an example, one compendium appears to differentiate the listing from products with the same active ingredient by using the dosage form field.  The FDA approved dosage form for the product is “tablet with sensor.”  Another compendium identified the difference in the product name field only while keeping the same dosage form as existing Abilify tablets.  These differences could impact reimbursement of the product at the pharmacy.

Another digital therapeutics example is Sandoz and Pear Therapeutics jointly-developed app called “ReSET-O” that is cleared by the FDA via a 510(k) and is categorized as a Class II device.  “ReSET” was listed in the Elsevier Gold Standard compendium earlier in 2018 and is now listed in the Red Book as deactivated; as of this writing, it has not been listed in Medi-Span’s PriceRx, First Databank/Analysource, or Cerner Multum.

As additional products that combine a drug and prescription drug-use-related software are introduced, the strategies used to identify the products will continue to evolve.  Compendia, manufacturers, and healthcare professionals will want to be familiar with the FDA’s proposed framework and the potential implications for all stakeholders.  Current listings should be reviewed for potential negative impact on digital therapeutics reimbursement to prevent pull through issues during the launch process.  PHSI can assist manufacturers with this review and strategic planning to prevent launch challenges.

Additional Resources

[1] https://www.federalregister.gov/documents/2018/11/20/2018-25206/prescription-drug-use-related-software-establishment-of-a-public-docket-request-for-comments.

 

2019 Winter Newsletter:

The Evolution of Retail Discount Generic Programs

The Evolution of Retail Discount Generic Programs

PHSI has been following the discount generic program landscape for over a decade.  Over the past few years, $4 generic lists have slowly melted away into the shadows of retail pharmacy.  There are no longer banners hanging from store fronts promoting these programs or prominent displays appearing on retail pharmacy websites.  Specifically, PHSI has analyzed the number of product offerings on discount generic lists in 2015 and again in 2018.  Several retail pharmacies, including CVS and Giant Eagle, have stopped offering $4 lists altogether.  For chains that have discontinued the $4 lists, cash-paying patients may now see their prescriptions being charged at the minimum prescription cash price.  Knowing all of this, it is surprising to see the launch of Kroger’s Rx Savings Club.

The Kroger Rx Savings program is a new paid program ($36/individual and $72/family of up to six) that offers three tiers of low-cost medications.  The first tier will include free generic medications, including sertraline, amlodipine, metformin IR, and montelukast.  Tiers two and three will respectively offer $3 and $6 30-day supplies.  Kroger has partnered with GoodRx to develop the program.  PHSI expects that the generic medications included in the Kroger Rx Savings program will offer additional discounts above those seen on the GoodRx website.

Although other chain pharmacies are not overtly advertising their discount generic programs, a review of their websites shows these programs still exist.  An overview of the major retailer generic discount programs is shown in the chart below.

Discount Generic List Chart

Like the Kroger program, Walgreens discount program is a paid program that offers three tiers of generic medications.  As PHSI has mentioned in past newsletter articles, pharmacy chains have not been increasing the medications offered on their discount generic lists.  The Kroger Rx Savings Club may tout the inclusion of the popular (and somewhat new) generic atorvastatin, but, in general, the number of medications offered on discount generic lists has decreased.  Perhaps with the costlier membership fee, the Kroger program will have expanded drug offerings.  With high deductible health plans becoming more common, we may see renewed interest in discount generic programs, a la $4 lists.

Based on recent headlines, retailers are finding other ways to deliver value and entice customers to their stores.  Walmart recently revealed a deal with Express Scripts to launch InsideRx.  Inside Rx will provide uninsured patients with discounts on brand-name drugs, with Express Scripts estimating an average savings of 40%.  The PBM CVS Caremark also announced their new digital prescription savings card, Sharecare, which will help uninsured or underinsured patients.  The Sharecare App offers discounts within the CVS Caremark national pharmacy network, which includes not only CVS pharmacies, but Walmart, Rite Aid, and Walgreens stores.  With the plethora of options available, there is more competition than ever for the cash-paying patients.  PHSI will continue to monitor and report on these evolving retail pharmacy strategies.

 

2019 Winter Newsletter:

FDA Proposed Framework for Digital Therapeutics: “Prescription Drug-Use-Related Software”

Formulary Exclusion Lists for 2019

CVS Health, Express Scripts (ESI), and Optum Rx have published their formulary exclusion lists for 2019.  When comparing the number of new exclusions, PHSI has found slight variances between what PBMs announce, what outside entities report, and what PHSI research uncovers.  Numbers can vary based on whether multiple formulations of the same drug are counted as one or multiple additions (e.g. Vanatol S vs. Vanatol LQ).  While PHSI includes newly-excluded multi-source brands (brands that now have generics available), other reporting entities exclude these drugs from their totals.  With that disclaimer stated, PHSI has completed its annual analysis of the formulary exclusion lists.

PHSI calculates that ESI added an additional 59 items to their exclusion list, including both single-source and multi-source brands.  In an August Twitter post, CVS Health reported removing 23 drugs from the standard formulary for 2019, while other sources reported 26 removals.  When PHSI reviewed the January 2018 vs. January 2019 formulary drug removals, we noted 37 new exclusions.  Optum Rx will exclude 50 additional drugs in 2019.  The new 2019 exclusions, as researched by PHSI, are as follows.

PBM 2019 Exclusions Chart

During the analysis, PHSI observed the following highlights:

  • There are some interesting exclusions in the HIV and Hepatitis C treatments, such as Atripla for HIV (excluded by Express Scripts and Optum) and Mavyret for Hep C (excluded by CVS and Express Scripts).
  • There are new exclusions in hemophilia (Factor VIII products) as well, with Express Scripts excluding Eloctate, Recombinate, and Xyntha.
  • In the multiple sclerosis category, CVS, Express Scripts, and Optum will exclude Extavia. Optum also excludes Plegridy.  Optum notes that “existing utilizers of these medications will be allowed to continue on therapy.”
  • The PBMs also note other specialty product exclusions, such as the injectable Hyalgan (CVS), Saizen (Optum and CVS), and Berinert (ESI), as well as some fertility drugs.
  • PBMs also appear to be focusing on more cost-effective pain management therapies and some have excluded Lazanda and Sprix.
  • The introduction of Viagra generics in 2018 continues to shift coverage to lower cost products. In addition to the usual exclusions of brand products that have generic versions available, Stendra is now excluded on CVS and Optum lists (not mentioned on Express Scripts).
  • The new class of CGRP migraine prevention agents had not made it onto the exclusion list since the drugs are so new, but Express Scripts has announced that they will cover Aimovig and Emgality, excluding Ajovy.[i]

Express Scripts uses indication-based management for the drug class of “inflammatory conditions,” which addresses products with a variety of indications including psoriasis, psoriatic arthritis, ankylosing spondylitis, among others.[ii]  Express Scripts notes the following regarding this drug class:

ESI Indication Based Management Graphic

New for 2019 – PHSI has also analyzed Optum’s exclusion list.[iii]  While PHSI did not analyze Optum’s list in past years, PHSI notes that this list contains some updates from previous versions, including the addition of some new products such as Admelog and Sprix.

Interestingly, Optum has handled the “immunomodulator” class, as well as Hepatitis C and MS, using a “required prior authorization” approach.  This is akin to step therapy, though OptumRx does not use that term.  The following is an excerpt from Optum’s list on this topic:

Optum PAs Graphic

Optum’s list notes the following regarding these classes:

“All of the products listed above are currently subject to prior authorization.  Preferred medications are required prior to new requests for non-preferred medication(s).  Existing utilizers of non-preferred medication(s) within the therapeutic categories of Hepatitis C, Immunomodulators, and Multiple Sclerosis will be eligible to remain on current therapy if compliance and efficacy of therapy are demonstrated.  Exceptions will be granted for specific indications where the preferred agents do not have FDA-approval for use.”

The major PBMs have taken different approaches to managing drug spend in 2019, but formulary exclusions in general continue to play a large role in that management.

This article represents PHSI’s analysis of publicly available information regarding these three PBMs’ formulary exclusion lists for 2019; readers are encouraged to assess the lists themselves.  Links to the exclusion list source information are provided below.

[i] Available https://www.managedhealthcareconnect.com/content/express-scripts-covers-amgen-lilly-migraine-therapies-excludes-teva-drug?hmpid=bWtyYXVzZUBwaHNpcnguY29t.  Accessed October 23, 2018.

[ii] Express Scripts 2019 National Preferred Formulary Exclusions.  Available https://www.express-scripts.com/art/pdf/Preferred_Drug_List_Exclusions2019.pdf.  Accessed October 23, 2018.

[iii] Optum January 1, 2019 Premium Formulary Exclusion List.   https://hr.nd.edu/assets/291074/optumrx_premium_formulary_exclusions_jan.._1_2019_finalv4.pdf.  Accessed October 23, 2018.

 

2018 Fall Newsletter:

“What Happens When We Run Out of NDC Numbers?” – FDA Announces Public Hearing

Single Source Biologics with Suffixes

Mepsevii (vestronidase alfa-vjbk) and Hemlibra (emicizumab-kxwh) are both single-source innovator products that have the 4-character, lowercase suffixes.  Neither have approved biosimilars.  With the introduction of Sandoz’s filgrastim-sndz in 2015, the FDA has added suffixes to generic names for biosimilars.  Between 2015 and 2018, the FDA provided additional guidance to the industry on biologics and biosimilars, including generic naming and suffixes.

The FDA uses suffixes to distinguish between biologic products with the same generic name, as they do not want to rely upon NDCs and branded names alone to determine the specific product utilized.  Their concern is pharmacovigilance and the ability to assign adverse events to specific manufacturers’ products.

The FDA will apply the suffix naming convention to all biosimilars and biologics, including both newly-licensed and existing products.  This will avoid adverse provider perceptions about product quality if only biosimilars included a suffix, while the originator was suffix-less.  In the future, all products approved with a BLA under 351(a) of the Public Health Service (PHS) Act will be assigned a suffix on the generic name.  Remicade (infliximab), Neupogen (filgrastim), and other originator biologics do not yet have suffixes, even though marketed biosimilars are available for these biologics.  This is still a work in progress for the FDA.  BLA applicants are requested to submit up to 10 proposed suffixes to the FDA.  These suffixes must follow the FDA-defined rules, which include having unique, four lowercase letter combinations that are devoid of meaning.  Be on the lookout for these updated naming conventions coming soon.

 

2018 Summer Newsletter:

The Challenges of Specialty Generics Competing with Orphan Brands

 

The Challenges of Specialty Generics Competing with Orphan Brands

Generic pharmaceutical manufacturers face several challenges when launching the first or second ANDA generic that competes with an orphan brand product.  Challenges include the following:

  • Will the brand manufacturer partner with another manufacturer (or subsidiary) to launch an authorized generic?
  • Should you contract with specialty pharmacy partners? If yes, do you approach the same specialty pharmacies that distribute the brand product?
  • Will the brand company increase rebates to the PBMs to influence their coverage decisions?
  • What requirements will the large PBM-owned specialty pharmacies demand to support your generic product, including price, support fees, and data fees they are receiving from the brand manufacturer?
  • What are the pros/cons of bypassing the wholesalers and direct contract with a handful of specialty pharmacies?
  • What, if any, financial assistance programs will the generic manufacturer consider? What experience does the generic manufacturer have working with patient support groups and/or offering copay cards?

These specialty products serve small patient populations and the brand price is often very high. Limited access to active pharmaceutical ingredient (API), a difficult manufacturing process, and a small patient population may limit the discounting the generic manufacturer is able to provide.

Generic manufacturers must understand the pharmacy landscape for the existing brand product (i.e.: more aligned with PBM owned, stand-alone, or health plan owned pharmacies) to determine its pricing and support strategies. Strategic questions include:

  • Are PBM incentives being addressed if all the discounts are given to the specialty pharmacy or vice versa?
  • Are health plans and their specialty pharmacies aligned to pursue lowest net cost regardless whether its via plan rebates or pharmacy discounts?
  • Will stand-alone specialty pharmacies have the payer coverage to provide adequate access to your product?

These questions should be addressed before finalizing a pharmacy and payer strategy. Specialty pharmacies and payers welcome the generic entrants to drive price competition in the marketplace.  The eventual marketing strategy must account for the influence these stakeholders exert on the payment and dispensing of the ANDA generic.

PHSI works with pharmaceutical manufacturers, PBMs/MCOs, and specialty pharmacies to help each stakeholder better understand market dynamics. Whether it is pipeline products or those where generics or biosimilars compete, PHSI has the expertise and resources to help our clients make informed business decisions to compete in a changing market.

 

2018 Summer Newsletter:

Single Source Biologics with Suffixes

New NCPDP Standards Up for CMS Approval

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 17th, 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 1st 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.

 

 

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