Blog

Over-the-Counter Hearing Aids Are Now Available

Hearing loss is a critical public health issue. Nearly 30 million adults in the US have some degree of hearing loss. Untreated hearing loss increases the risk of social isolation and depression and is one of the greatest modifiable risk factors for dementia. Although use of hearing aids has increased in the past several years, studies have found that in people over the age of 70 years, only about 18% who owned hearing aids used them. 1,2

In the past, the only hearing devices available in stores were known as Personal Sound Amplification Products (PSAPs), which are not alternatives to hearing aids. These devices are made for people without any hearing impairment to amplify sounds in certain situations, such as for recreational activities like bird watching or hunting. These are regulated as consumer electronics and not medical devices and may be more variable in terms of quality.7

The price of hearing aids has been a major obstacle for people. Traditional Medicare does not cover prescription hearing aids, which can cost between $4,000 and $5,000. Medicare Advantage plans typically include some coverage, but people still pay roughly 79% out of pocket. 1 There is a large potential market for over the counter (OTC) hearing aids. Roughly 90% of adults with hearing loss can be helped by OTC hearing aids, but sales have been restricted to licensed audiologists and other specialists, which has continued to keep prices high. Effective October 17th, 2022, consumers can buy OTC hearing aids in stores and online.1

On August 16th, 2022, the FDA issued their final rule to establish a regulatory category for OTC hearing aids to improve access and lower prices for millions of Americans.  The goal of the final rule is to foster innovation and competition in the hearing aid technology marketplace. Many manufacturers and retailers have not said much about new products, prices, or distribution yet, but some details have surfaced. Best Buy plans to open hearing centers in more than 300 stores in the 4th Quarter and has already added an online hearing assessment tool. Customers will be able to use this tool to assess their hearing and choose from nine brands; sales staff who have received specialized training will be able to provide assistance. Prices are said to range from $200 to $3,000, depending on varying functions. Sony also announced a partnership with WS Audiology Denmark, but specifics regarding their products have not been released. Bose Corp. has partnered with Lexie Hearing to create a new self-fitted OTC aid for around $900. Over time these prices are likely to fall as more competition enters the market.1,3,5

Walmart, CVS, and Walgreens have made OTC hearing aids available on their websites as of October 17th. Walmart plans to offer a range of various products priced from $199 to $999 per pair and has currently made them available in their vision centers at select stores in Colorado, Michigan, Missouri, Ohio, Pennsylvania, Tennessee, and Texas, and at 474 Sam’s Club Hearing Aid Center locations. CVS plans to have products in stores beginning in November 2022. Walgreens currently has hearing aids available online for $799 with comparable models from specialists ranging from $2,000 to $8,000 per pair. Walgreens also plans to sell these in stores in the future. Hy-Vee plans to start selling over-the-counter hearing aids online and in 34 locations across Iowa, Kansas, Minnesota, Missouri, Nebraska and Wisconsin. Hy-Vee will offer four models ranging in price from $499.99 to $999.99 and plans to make them available in 100 locations by the end of the year.5

Because these products are OTC, pharmacists will not be required to consult on these devices, but they are one of the most accessible healthcare professionals and will need to be able to help consumers in their selection when needed. In some cases, pharmacists will need to refer patients to audiologists and physicians for additional evaluation. They may also need to follow up with patients to ensure the device works as expected. To help pharmacists in this new role, the University of Pittsburgh has developed an online program, available for a fee, to teach pharmacists and pharmacy technicians how to help patients safely choose OTC hearing aids. Continuing education courses will also be produced to help pharmacists in recognizing hearing loss, helping patients in not over amplifying their devices, and much more. 6,8

Sales will be restricted for OTC hearing aids to people 18 years old or older with perceived mild to moderate hearing loss, but there are people to help navigate this new market. The Hearing Loss Association of America published a tip sheet on buying hearing aids. Wirecutter posted a useful guide to selecting various products based on features, which is updated as new products emerge. Johns Hopkins Bloomberg School of Public Health created HearingNumber.org to help people find their level of hearing loss and learn about treatment options. This currently requires an Apple smartphone or tablet, but more options will become available in time.3,1

There are some important things to think about when buying OTC hearing aids. What kind of functions does the device carry, such as Bluetooth capabilities? Are they sweat or water resistant? Do they include rechargeable batteries, or do batteries need to be replaced? What about return policies? There are some standard features that the FDA has made mandatory, such as the ability to adjust the volume, but return policies have been left to the states to decide.4

In the next several months we will likely see many changes coming. People across the country will begin to save hundreds to thousands of dollars while improving their quality of life. This will take time though; more retailers and manufacturers will need to enter the market to see prices continue to drop and to see new innovations arise.

 

Sources:

  1. Hearing aids to be sold over the counter next week | The Seattle Times
  2. Hearing Aids | FDA
  3. FDA Finalizes Historic Rule Enabling Access to Over-the-Counter Hearing Aids for Millions of Americans | FDA
  4. What to Know About Over-the-Counter Hearing Aids – NBC4 Washington (nbcwashington.com)
  5. Hearing aids OTC: CVS, Walgreens, Walmart, Best Buy selling over counter devices (axios.com)
  6. Over-the-counter hearing aids have been greenlighted by the FDA – your local pharmacist will soon be able to sell you the device you need (yahoo.com)
  7. Hearing Aids and Personal Sound Amplification Products: What to Know | FDA
  8. Over-the-Counter Hearing Aids: Everything Pharmacies Need to Know (pbahealth.com)

 

Posted: November 2022

FTC Review of PBMs

The Federal Trade Commission (FTC) aims to promote competition, educate consumers, and protect them from unfair business practices. In mid-2022, the FTC announced that they will be investigating records from six of the largest pharmacy benefit managers (PBMs) to understand how they operate their businesses. Under section 6(b) of the Federal Trade Commission Act, the FTC has the power to conduct studies without a specific law enforcement purpose. The PBMs to be investigated include Express Scripts, CVS Caremark, OptumRx, Prime Therapeutics, Humana, and MedImpact Healthcare Systems. PBMs collaborate with a variety of pharmaceutical industry sectors including drug manufacturers, insurers, and pharmacies. They negotiate prescription drug costs, develop drug formularies, and contract with pharmacies to dispense medication to patients.

An initial inquiry began on February 11, 2022, when the Commission voted on the proposal to launch a study into PBM practices. The intent was to look at information related to rebates, pricing policies, and fees. The result was a split 2-2 vote. On February 25, 2022, the FTC requested public comments on the impact of PBM practices. The comment period remained opened for 60 days, ending on April 25, 2022. During that time, the FTC received over 24,000 comments.  On June 7, 2022, the FTC voted 5-0 to proceed with the inquiry. As a result, the six largest PBMs will have 90 days from the date they receive an order to provide their records from the previous 5 years. How the PBMs will respond is yet to be determined. The FTC expects this study will identify the PBM’s role in the prescription drug market and their impact on patients, physicians, employers, pharmacies, and payers. The FTC hopes that this study will reveal and further elucidate the numerous practices that PBMs are involved in such as prior authorizations, specialty drug policies, audits, and formulary design.

The FTC will be requesting the following information from PBMs:

  • Pharmacy Networks and Reimbursement
    • Top drugs by sales, by prescription volume, specialty drugs, and rebated drugs
    • Post-sale adjustments
    • Development of pharmacy networks
    • Audits of pharmacy networks
  • Formularies
    • Prior authorization resolution times and rates
    • Situations when brands are favored over generics
    • Rebated drugs

According to the FTC announcement, the goal of the inquiry is to gain a deeper understanding of PBM practices including fees and clawbacks charged to pharmacies, potential steering of patients to PBM-owned pharmacies, audit practices, prevalence of prior authorizations and other restrictions, and the impact of rebates and fees on formulary design and costs to payers and patients.

This study is being conducted without a specific law enforcement purpose.  The PBMs could be penalized for omitting requested information or falsifying reports.

PHSL expects PBMs to submit terabytes of information to the FTC.  It is unknown how long the analysis by the FTC will take. What will the FTC reveal from this inquiry?  How will that impact PBMs, patients, payers, and pharmacies?

References:

Pharmacy Benefit Managers Practices Controversies What Lies Ahead | Commonwealth Fund

FTC Launches Inquiry Into Prescription Drug Middlemen Industry | Federal Trade Commission

In Reversal, FTC Launches Inquiry Into PBM Industry (ajmc.com)

FTC’s PBM Study Signals Broader Federal Scrutiny of the Prescription Drug Sector | Epstein Becker & Green – JDSupra

 

Posted: October 2022

Multiple Sclerosis Work Space

Multiple Sclerosis is a chronic disease that affects the central nervous system. As a result, it impacts the way the brain communicates with the rest of our body. The disease is more common in women and adults between 45-74 years of age. MS affects everyone differently. Some individuals may experience symptoms such as fatigue, numbness or tingling, and vision problems while others may not experience any symptoms at all.

MS Work Space is a resource sponsored by Bristol Myers Squibb for use by employers to help support their employees that are living with multiple sclerosis. The website has a resource tool that allows employers to estimate the number of people in their company who may have MS. The MS Estimator first asks about the type of work performed by the employer and then more generalized questions about employees, such as the number of employees in the organization, age range, region of the country they live in, and the male:female ratio. The results are simply a representation and meant for informational and educational purposes only. Additional resources such as a Caregiver Census, Benefits Checklist, and strategies on how to implement a program for employees with MS are available for employers. The Caregiver Census allows employers to understand the importance of caregiving amongst their employees and how it impacts workplace performance. MS Work Space also offers podcast episodes that discuss the nature of the disease and its impact within the working environment. Examples of podcasts that are available include “The Effect of Chronic Diseases like MS on Your Organization,” “Helping Your Employees with MS and Chronic Disease,” and “The Financial Realities of MS for Employers & Employees.”

The goal of MS Work Space is for employers and organizations to recognize the impact as they work toward accommodating people with multiple sclerosis. For example, employers can experience numerous advantages by implementing accommodations like periodic rest breaks, adjustable workstations, fans and portable air conditioners, enlarged keyboards, and/or modified break schedules for their employees impacted by MS. Some of those benefits include increased productivity, decreased costs with new employee training, increased attendance, and more.

This MS platform brings awareness to employers so they can make those accommodations for their employees. PHSL research has not identified any other manufacturer-sponsored employer resources on the web that focus on a specific disease (Please share updates if this changes). Resources for accommodations and support of employees with chronic conditions are often available from national organizations, such as the American Diabetes Association. However, MS Work Space presents unique resources that may not be applicable to all conditions. Other chronic conditions that may benefit from similar employer resources include arthritis, diabetes, cancer, mental health, and behavioral conditions.  Employers may already be identifying opportunities to support employees by offering mobile apps such as “Gympass” and “Talkspace” focused on prevention and management of chronic conditions.  Based on the success of MS Work Space, it will be interesting to see if more manufacturer-sponsored, employer-focused programs emerge.

 

Posted: October 2022

Current State of Digital Therapeutics and the Reimbursement Environment

The Digital Therapeutics Alliance defines digital therapeutics as products that “deliver evidence-based therapeutic interventions to patients that are driven by high quality software programs to prevent, manage, or treat a medical disorder or disease.”  The interest and studies revolving around digital therapeutics have only grown in the last decade.  Curiosity in the possibilities of digital therapeutics used to be confined to academia and technology companies.  Today, pharmaceutical companies are seeing the potential of digital therapeutics and becoming increasingly involved through strategic investments and partnerships with various technological companies1.

The world of digital therapeutics can be complex and convoluted with the various terms.  It is crucial to understand these terms when discussing digital therapeutics.  Some of these key terms are as follows:

  • Digital Health is defined as the space where digital technologies, daily life, and healthcare intersect.
  • Digital medicine describes a field concerned with the use of technologies as tools for measurement and intervention in the services of human health. In a broad sense, digital medicine is technology that supports the practice of medicine.
  • Prescription digital therapeutics are FDA-authorized software programs that providers may prescribe as a form of treatment2.

Digital therapeutics are becoming more widely available.  There are both non-prescription and prescription digital therapeutics.  Some non-prescription products include Daylight®, deprexus ®, and HelloBetter Vaginismus Plus®. Often, a smart device and internet connection is all that is required to utilize the non-prescription products.  Some prescription digital therapeutic products include Insulia®, Nerivio®, and Somryst®3.  The same general hardware and software requirements for the non-prescription products are needed for the prescription products4.  Some digital therapeutics are listed in drug compendia.  Bluestar®, reSET®, EndeavorRx®, and many others are listed in Medi-Span® Price Rx®, where the products are assigned a generic product identifier (GPI) code that can affect reimbursement decisions.

There are many factors that are weighed when it comes to reimbursement of digital therapeutics, but the compendia play a significant role in reimbursement decisions for many payers.  Products that are listed in unique or specific categories, as opposed to more general categories, may have a greater probability of being reimbursed by payers.  The compendia listing is a crucial beginning step in becoming a product on a payer’s formulary.  Without compendia listings, it can prove difficult for a digital therapeutic product to be picked up by a payer.  Similarly, compendia listings are also crucial in having a digital therapeutic product included in an EHR e-prescribing platform and having that product added to a patient record.  Having a product in an EHR may enable the prescriber to perform a real-time benefits investigation.  All these factors, on top of rigorous clinical trial data, prescription status, and intended use, will be utilized by payers to determine the coverage and reimbursements of digital therapeutic products1.

Reimbursement for digital therapeutics is uncharted territory for many payers.  The temporary solution is a direct-to-consumer model in which users are paying subscription fees, but a value-based model where payment is based on patient outcomes is being investigated.  A great deal of evidence would be required to support claims and demonstrate efficacy.  This shows the importance of digital formularies to create confidence in evidence-backed digital therapeutics for providers and payers to increase utilization.

Digital therapeutics are projected to grow over the next decade.  The past decade has seen trends in digital therapeutic research focused on solutions for cardiovascular diseases such as hyperlipidemia, hypertension, and acute coronary syndrome.  Currently, there is still research dedicated to these cardiovascular diseases, but there is also a focus on a wide range of psychiatric indications, including attention deficit hyperactivity disorder (ADHD), autism spectrum disorder, schizophrenia, depression, and bipolar disorder.  The FDA has taken notice of the rise of digital therapeutics.  As a part of the 21st Century Cures Act, the FDA Breakthrough Devices Program offers manufacturers an opportunity to collaborate with experts within the FDA to address any premarket concerns and make timely and agreed upon adjustments.  The goal is to give providers and patients quicker access to digital therapeutics while still being confident in the safety and efficacy4.  This places digital therapeutics in more of a position to grow and find their role in treatment plans. What do you think the future of digital therapeutics looks like?

 

References

  1. AMCP Partnership Forum: The evolving role of digital therapeutics. https://www.jmcp.org/doi/epdf/10.18553/jmcp.2022.22093. Accessed July 12, 2022.
  1. Talking HealthTech. Digital Health, Digital Medicine, and Digital Therapeutics; what is the difference? Talking HealthTech. https://www.talkinghealthtech.com/glossary/digital-health-digital-medicine-and-digital-therapeutics-what-is-the-difference. Accessed July 12, 2022.
  1. Product library. Digital Therapeutics Alliance. https://dtxalliance.org/understanding-dtx/product-library/ Published May 27, 2022. Accessed July 12, 2022.
  1. Burke J. White Paper: Digital Therapeutics: Past Trends and Future Prospects. https://www.evidera.com/digital-therapeutics-past-trends-and-future-prospects/. Published March 8, 2022. Accessed July 12, 2022.

 

Posted: October 2022

PHSL Quoted on Pharmacy Consolidation Impacts on Cancer Care

PHSL President Ann Johnson was consulted on the topic of pharmacy consolidation and the impact on cancer care.  Ann shared, “Although retail pharmacy consolidation might create some inconveniences for patients, the consolidation of pharmacies is not expected to have much of an impact on cancer care in the community setting.  The costs that patients pay for drugs, such as their copays, are set by the health plans and PBMs, not the pharmacies themselves, so pharmacy consolidation will not lead to higher prices for consumers. Likewise, from the pharmacy’s perspective, the amount that the pharmacy is reimbursed is established in their PBM network agreements.”

Read the full text article to learn more about the different points explored by the author and sources.

 

Nelson, Roxanne. “Consolidation in US Health Care Negatively Impacts Cancer Care – the Lancet Oncology.” The Lancet Oncology, 23 Sept. 2022, www.thelancet.com/journals/lanonc/article/PIIS1470-2045(22)00598-8/fulltext.

 

Posted: October 2022

California Insulin

On July 7th, 2022, California Governor Gavin Newsom announced that California would begin manufacturing their own low-cost insulin.  The administration hopes that the California insulin will be available as soon as early 2024.  This serves as an effort to increase accessibility to crucial medication for many patients.1  How is California planning on accomplishing this and what effects may this have on the insulin market?

California has dedicated $100 million of its $308 billion budget for the project.  The plan is to use $50 million now to obtain insulin from a currently undetermined manufacturing partner so that it can hit the market as soon as possible.  The remaining $50 million will be used to build an insulin manufacturing facility in California.  Distribution details have yet to be finalized, but the insulin would be available to patients in any state.

How can California do this for $50 million?  Similar to CivicaRx, California intends to partner with established industry participants.2  CivicaRx previously announced a plan to produce biosimilar insulin products at low cash costs to patients.3  This is possible by partnering with a manufacturer that has already developed the technology to make biosimilar insulin products.  CivicaRx has announced a partnership, but California has not yet formed a partnership with a manufacturer.  Doing so would shorten the timeline to develop a biosimilar.

The type of insulin that California hopes to produce is still unclear. Currently, three major pharmaceutical companies, Sanofi, Eli Lilly and Novo Nordisk produce the vast majority of insulins.4 Assuming competitive pricing, production of biosimilars to their major products, Lantus, NovoLog, and Humalog could erode the sales of these pharmaceutical firms. These companies already offer patient assistance programs, such as Eli Lilly’s Insulin Value Program, which launched in 2020. Their program initially began as an opportunity to help patients save money on insulin during the pandemic but has since expanded to allow anyone with or without commercial insurance to access their insulins for $35 per month.5

California plans to compete with existing and future insulin producers in the coming years.  There are many questions around the timeline, budget, manufacturing capabilities, and target products.  What are California’s chances of success to produce and compete with a lower cost insulin in the U.S. market?  After CivicaRx and California, who will be next to announce intentions to compete for insulin? Share your thoughts in the comments.

 

Posted: September 2022

Sources:

  1. California to make its own low-cost insulin, Gov. Newsom says – CNN
  2. California Wants to Make Cheap Insulin. Here’s How It Could Work | WIRED
  3. CivicaRx Announces Plans for Generic Insulin | Pharmacy Healthcare Solutions, LLC. (phsirx.com)
  4. California’s low-cost insulin plans receive $100m manufacturing boost – Pharmaceutical Technology (pharmaceutical-technology.com)
  5. Lilly commits Insulin Value Program, featuring $35 copay card, to suite of affordability solutions for people with diabetes | Eli Lilly and Company

 

NACDS Considerations for COVID-19 Vaccinations Transitioning to Commercial

On June 23, 2022, the National Association of Chain Drug Stores (NACDS) sent recommendations to the Biden Administration for the expected transition from government-funded COVID-19 vaccinations to commercially available vaccinations. They outlined five key points.

  1. Engage all stakeholders in transparent planning with a clear timeline. This would include regular meetings with stakeholders and the federal government. Also, plan to transition during a time that would not be as busy for pharmacies handling vaccines (NACDS recommends the first quarter of 2023).
  1. Work closely with manufacturers, supply chain entities, and other stakeholders to support product availability and meet expected demand. This would include evaluating stability, storage, cold chain, and shipping. This should also include preparing for the return of EUA product before commercial transition. The administration should promote prefilled syringes and packaging options to avoid waste and ensure different NDCs are assigned to commercial and government products.
  1. Promote cost-based reimbursement and beneficiary coverage, support long term sustainability and access to COVID-19 vaccinations, and clarify future data reporting requirements.
  1. Plan for a public information campaign to educate the public about the transition to the commercial market. This is intended to keep patients informed of changes and challenges they may face in the future.
  1. Look ahead and proactively plan for the transition of COVID-19 testing and therapeutics to the commercial market so that patients have access and care throughout this transition.

Current COVID-19 vaccines come in multi-dose vials, and stability limitations lead to discarding waste when single or infrequent doses are needed during times of low demand.  Prefilled syringes could help to avoid waste and clarify initial vs. booster dosing confusion. At this time, most pharmacies are not thinking about the cost of the lost vaccine because the government purchased the vaccines. Cost will become more important with the move to commercial access. Pharmacies will not tolerate the cost associated with waste and discarded vaccines.

A public education campaign is important to assist with the transition. The change from patients receiving a vaccine for free with minimal limitations to patients and providers navigating health insurance coverage rules could decrease immunization initiation or completion and increase patient dissatisfaction. Vaccine manufacturers will succeed with single-use packaging, planning, coordination, and communication with all stakeholders. What issues do you expect for the transition of COVID-19 vaccines from government procured to commercial status?

 

Published: August 2022

Supreme Court Rules on HHS Reimbursement Reduction

The 340B program is designed to lower healthcare costs and provide more comprehensive services to underserved patient populations.  The program involves drug manufacturers offering discounted prices to qualifying hospitals and providers that serve low-income patients.  The discounted drugs are reimbursed at prevailing rates by payers.  Providers can then use the savings from the program to provide discounted services and cover other costs.

The American Hospital Association (AHA) and other groups brought a case to the U.S. Supreme Court challenging the reimbursement rates for Medicare Part B from 2018 to 2019, during which time the U.S. Department of Health and Human Services (HHS) reduced reimbursement rates for 340B providers to ASP-22.5%.  The Supreme Court unanimously ruled that HHS’s decision to lower the reimbursement rates of 340B providers was unlawful.  However, based on the ruling, if HHS conducted a survey on the hospitals’ acquisition costs and set reimbursement rates based on their findings, then the change in reimbursement rates would be lawful.  This suggests that there may be cuts in reimbursement rates to 340B participants in the future.

This ruling is being viewed as a victory for the 340B entities and the patients that they serve.  The Supreme Court ruling may not be the end of this case, which now requires a remedy for past underpayments.  Currently, the case has been sent back to the U.S. Circuit Court of Appeals for the District of Columbia, where it could be sent back to the district court or the Centers for Medicare and Medicaid Services (CMS) where a remedy could be created.  There is not an expected timetable for resolution.

The 340B program faces other challenges.  One of the most pressing issues involving the sustainability of the 340B program is manufacturer participation. There are currently as many as sixteen drug manufacturers limiting discounted pricing of drugs to direct participants of the program, and not providing discounts to contract pharmacies.  The American Society of Health-System Pharmacists (ASHP) recognizes the delicate nature of the 340B program.  ASHP also advocates for the 340B program and pushes back against all efforts to undermine it.  What direction do you envision the 340B program taking in the future?  Stay tuned for future PHSL posts on this important issue.

 

 

Posted: July 2022

Gottlieb Proposes Pharmaceutical Segments for Pricing Strategies

At AHIP’s 2022 conference, Scott Gottlieb, M.D., former FDA commissioner joined a panel discussion on “Balancing Prescription Drug Affordability, Innovation and Access”.  He contends that there cannot be a one-size-fits-all solution for pharmaceutical pricing in the US.  He proposes three segments for bucketing drugs with unique policies for each.

The approach does not use the current drug breakouts for brands, generics, and specialty.  Instead, the type of market for the drug is the differentiator.  The first bucket is “drugs that are in an active market with significant rebate activity”.  Common drugs in therapeutic categories with many choices and high rebates on brands are considered in active markets.  The competition between products is driving lower prices due to market forces.

The second bucket is “drugs that currently monopolize the market but will lose monopoly in the near future”.  Payers are unlikely to realize substantial rebates on these products in the short term.

The third bucket is “drugs that are likely to monopolize a market in the long term”.  Potentially curative gene therapies would be examples of products in this segment.  If a truly effective therapy is established, Dr. Gottlieb believes manufacturers would lack the incentive to discount their product, allowing for that originator product to maintain a higher price.

Dr. Gottlieb’s proposed structure would focus on the second bucket, to influence pharmaceutical pricing and discount efforts for products where payers are unable to rely on competition to influence price.

Dr. Gottlieb’s proposal is designed to promote debate on drug pricing.  Competitive market forces for pharmaceuticals lead to lower net prices, and therefore, those products should not be the focus of new pricing policies.  While the brief article seems to indicate that the third bucket will also lack competition, we disagree and believe that manufacturers will identify these scenarios and specifically target these products to bring a competing alternative to capture market share.

Many questions are unanswered based on this brief description.

  • Who will administer the proposed new pricing process?
  • Who will decide what category each product falls under?
  • What group will create specific metrics to define the three categories?
  • What will be the basis for dictating and adjusting products between the segments?
  • How likely is it that this proposal would gain acceptance, be implemented, and have an impact?

The challenges in answering these questions will determine if Dr. Gottlieb’s proposal will provoke discussion and change in the industry or will be an interesting segmentation with no follow through.

 

Source:

https://www.fiercehealthcare.com/payers/ahip-2022-addressing-drug-prices-requires-all-stakeholders-table-experts-say

 

Posted: July 2022

AMCP’s Pay-for-Performance Principles

The Academy of Managed Care Pharmacy (AMCP) outlined key principles regarding the utilization and optimization of the pay-for-performance model in their recent article titled “AMCP Pay-for-Performance-Based Reimbursements and Direct and Indirect Remuneration (DIR) Fees.” AMCP recognizes the importance of the services provided by pharmacists and supports the utilization of payment arrangements for pharmacists. These include performance-based metrics related to pharmacists’ services. The principles provided by AMCP are designed to act as a framework from which a fair and effective pay-for-performance agreement can be reached to improve patient outcomes.

AMCP provides lengthy explanations and details surrounding their thirteen principles, but the paraphrased principles are as follows:

  1. Use of “fair, attainable, and meaningful” criteria that applies to the type of pharmacy in the pay-for-performance agreement
  2. Adoption of a core set of standardized pharmacy performance measures based on unanimity from pharmacy providers, pharmacy benefit managers, health plans, and other stakeholders by Medicare Part D
  3. Recognition of health equity, socioeconomic disparities, size, geography, and patient demographics reflected in the benchmarking performance of a pharmacy
  4. Performance-based contract with “transparent, clear, and concise” provisions that are readily available and accessible to all parties in advance of any performance measurement period
  5. Unambiguously defined specifications of the measurements included in the contract
  6. Precisely defined organizational level at which metrics will be calculated and compared
  7. Agreed upon plan for collecting, integrating, and analyzing required performance data, including who is responsible for the analysis and payment of the data collection and utilization
  8. Consideration of adjusting pharmacy reimbursement rates to compensate pharmacies for the infrastructure required to collect the data necessary to meet performance-based contract requirements
  9. Performance-based price concessions are both important and necessary to pay-for-performance programs
  10. Fees due to pharmacy performance should be based on acknowledged, fixed metrics
  11. Price concessions should never be structured as “claw back” where a pharmacy would owe payment for a prescription product back to the payer
  12. Performance-based reconciliation should be completed no later than 90-days post-plan year
  13. Preferred pharmacy networks are a crucial tool for lowering patient costs and improving patient outcomes

The principles and pay-for-performance contracts are not without challenges that will need to be addressed by all stakeholders. For example, there are a multitude of ways to measure a pharmacy’s performance. One of which is outcomes-based measures that focuses on the health of a patient resulting from care. A concern here is that a pharmacist can do everything correctly and appropriately, but poor outcomes can still occur. They can educate a patient on the importance of medication adherence or lifestyle modifications, but the patient must act for their own health. Having a performance-based contract that relies in part on a patient’s decisions could be problematic. Another measure of performance is patient-reported outcomes that relies on the input of a patient via a survey. Patients may be asked about quality of life, symptom burden, health-related behavior, and satisfaction with their pharmacy. This method may be prone to negative bias, which would not reflect the true patient experience at the pharmacy. Pharmacies do not have a standardized set of metrics and reporting mechanisms. This means that the mechanisms and metrics required of a pharmacy could vary based on the payer, leading to large investments in the infrastructure required for data reporting. The large investments in data infrastructure without a standardized method of collecting and reporting the data and metrics could create greater cost on the shoulders of patients, which could negatively impact patient outcomes.

AMCP fully supports engaging in pay-for-performance agreements. They help to lay out principles upon which a fair and equitable agreement can be made. There are challenges to these agreements that are impacting pharmacies financially today. How do you envision pay-for-performance agreements evolving in the future?

https://www.jmcp.org/doi/full/10.18553/jmcp.2022.28.2.138

 

Posted: June 2022