Session Recaps Recent Regulatory and Legislative Actions Related to Prescription Drugs, COVID-19, and More

Health care legislation and regulation continue to move at a staggering pace, particularly related to COVID-19. During a session at AMCP Nexus 2020 Virtual, Daniel Tomaszewski, PharmD, PhD, associate professor at USC School of Pharmacy, HCDA Program, and Stephen Northrup, MPA, founding partner of Rampy Northrup LLC, provided updates on the latest federal and state legislative and regulatory actions of interest to managed care and specialty pharmacy professionals, including medication costs, Centers for Medicare & Medicaid Services (CMS) updates, and more.

On July 24, President Donald J. Trump signed a rebate rule executive order, narrowing the safe harbor for manufacturer rebates and requiring negotiated discounts offered on prescription drugs to be passed to the patient. The rebate rule will only take place if premiums are not projected to increase because of the rule and confirmed by the U.S. Department of Health and Human Services (HHS). This rebate rule is only directed at Medicare Part D plans. AMCP sent a letter to HHS on Sept. 1, expressing concerns with the executive order.

On Sept. 24, the FDA issued a final rule providing FDA-authorized programs to import specific drugs from Canada. Programs must meet the following requirements: (1) enlist a single manufacturer, (2) contract with one “foreign seller” located in Canada, and (3) define one “importer” located within the United States. Importation plans would be administered by states or Indian tribes after authorization by the FDA and would specify the drugs eligible for importation. AMCP joined other national pharmacy organizations in commenting on the rule, voicing concerns related to lack of safety or cost savings risk that do not warrant implementation of the rule.

“In my opinion, this is a Band-Aid to the overall issue that the government is trying to take a look at,” said Dr. Tomaszewski, noting that requirements for the rule may bring some inefficiencies to the process. Canadian authorities have also expressed concerns about the supply chain and availability for Canadian citizens.

On Sept. 1, a proposed rule was published by CMS, detailing the establishment of a coverage pathway for new, innovative medical devices approved by the FDA. It allows Medicare beneficiaries faster access to these breakthrough technologies and applies to devices that receive market authorization by the FDA through the agency’s Breakthrough Devices Program.

In July, Substance Abuse and Mental Health Services published a final rule amending regulations governing the privacy of patient substance use disorder treatment records. The CARES Act included language to better align this rule with HIPAA. The published rule is an attempt to establish updates while working to finalize regulations to meet the CARES Act. AMCP has been working with the partnership to amend 42 CFR Part 2 for several years. Both the final rule and the CARES Act provisions align with what this coalition has been advocating for.

On Sept. 13, the Most Favored Nations executive order was signed, permitting HHS to test a new payment model that uses a lowest price strategy to match prescription drug prices available in other countries, with the potential to impact Medicare Part B and D drugs. Dr. Tomaszewski said that this may have the biggest buzz and questions around it. “It has a substantial ability to disrupt the marketplace in the managed care space,” he said. This is currently restricted to a pilot program, and HHS is implementing rulemaking to test the impact of such a payment model. Many implementation details remain unknown, so AMCP is monitoring this process.

Copay accumulator flexibility provides clarity on whether the value of manufacturer assistance programs must count toward maximum out-of-pocket costs. CMS has finalized a rule that will allow Affordable Care Act plan sponsors to exclude the value of manufacturer assistance programs as part of the maximum out-of-pocket costs and opt out of such a program. AMCP supports the updated rule.

A Sept. 9 rule permits pharmacists to order and administer a vaccine, restricts authority to those aged 3 years and older, and preempts state laws that would prohibit this. AMCP supports pharmacist administration and appropriate allocation of vaccines.

CMS has also broadened telemedicine services during the pandemic. Effective March 6 and for the duration of the public health emergency, Medicare will make payments for Medicare telehealth services furnished to patients in broader circumstances; visits are considered the same as in-person visits and are paid at the same rate.

Mr. Northrup “looked into a crystal ball” to determine what might be ahead in the coming years. “There are certainly some areas where there is some agreement [between political parties] on what to do on drug pricing,” he said. Some areas of agreement include redesign of the Medicare Part D benefit and patient cost-sharing reductions and protections in Part D. He foresees disagreement between parties to continue for government negotiation on drug pricing, pricing limitation, and the extension of public sector changes to commercial insurance.

Presentation: L1 Federal and State Legislative and Regulatory Update. AMCP Nexus 2020 Virtual.