ASHP Comments on Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs

Department of Health and Human Services
200 Independence Ave. SW
Room 600E
Washington, DC 20201

RE: Docket No. CMS-2018-0075 — Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.

ASHP is pleased to submit comments to the HHS Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs (the “Blueprint”). ASHP represents pharmacists who serve as patient care providers in acute and ambulatory settings. The organization’s 45,000 members include pharmacists, student pharmacists, and pharmacy technicians. For more than 75 years, ASHP has been at the forefront of efforts to improve medication use and enhance patient safety. 

Addressing rising drug prices remains a top priority for ASHP, and we applaud HHS for taking concrete steps on this issue. ASHP engages regularly with state and federal policymakers to push for pricing reforms that protect and benefit patients. In addition to our individual efforts, ASHP is also a member of the Steering Committee of the Campaign for Sustainable Rx Pricing (CSRxP), a coalition consisting of physicians, consumers, payers, hospitals, health systems, and patient advocacy groups.

In general, ASHP is pleased to see proposals focused on increasing generic competition, reducing patient cost-sharing, and improving transparency. However, we are deeply concerned by the Blueprint’s focus on the 340B Drug Pricing Program as a cause of high drug prices, as well as by some of the proposed Medicare and Medicaid changes. The Blueprint includes dozens of policy proposals that will impact every stakeholder in the drug-pricing supply chain, from manufacturers to patients. As the Blueprint contains broad outlines of proposals rather than detailed strategies, ASHP’s support of drug-pricing policy proposals will be determined on a case-by-case basis and will be contingent on the actual implementation of processes for those proposals. ASHP plans to carefully monitor and assertively and comprehensively address proposals as federal agencies and Congress consider them. Below, we respond first to those proposals that we believe present promise in reducing drug prices and then to those proposals that we believe may be detrimental to clinicians and their patients.

I. Promising Proposals

A number of the Blueprint’s policy proposals align with ASHP’s policies on drug pricing. In particular, we believe ASHP can be supportive of the following initiatives:

• Access to Reference Product Samples: ASHP shares HHS’s concern that Risk Evaluation and Mitigation Strategies (REMS) have been used to prevent generic competition. This assessment is in line with the Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act, which ASHP supports. To that end, HHS should consider asking the Food and Drug Administration (FDA) to undertake a review of existing REMS to ensure that any distribution restrictions are fully warranted by medication safety concerns.
  
  Restricted distribution related to REMS (and, in some cases unrelated to REMS) impacts more than just generic drug competition. Restricting distribution of medications is often a means to push patients to a specific purchasing channel, which in some cases increases not only their out-of-pocket costs, but also systemic costs. Further, restricted distribution networks can complicate patient access to critical medications, potentially disrupting care. As HHS reviews the intersections of restricted distribution and generic drug competition, we encourage the agency to also analyze the pricing impact of restricted distribution networks across the healthcare landscape.
  
  Finally, as noted, ASHP shares HHS’s interest in increasing generic competition. We also believe, however, that the overall supply chain for generic medications must be strengthened. Specifically, over the past year, clinicians have been affected by shortages of basic generic products such as sterile water, small-volume parenterals, injectable opioids, and sodium bicarbonate. Shortages jeopardize patient safety and siphon clinician resources away from direct patient care to shortage management, resulting in significant systemic costs, including increased prices. We strongly urge HHS to explore means to incentivize generic competition and manufacturing upgrades to reduce and eventually eliminate shortages. In coordination with a number of other healthcare stakeholders, ASHP developed consensus recommendations¹ for addressing shortages, which may provide a helpful starting point for the agency. Shortages remain a top-priority issue for pharmacists and their patients, and we stand ready to assist HHS in any way possible to address this critical public health problem.

• Biosimilar Development, Approval, Education, and Access: ASHP generally supports the Blueprint’s proposals to enhance biosimilar development and access. ASHP would likely support enhancements to the Purple Book, particularly those designed to better integrate its use into pharmacy workflow.
  
  ASHP would also support clinician and public education about biosimilars, provided that the programs are objective and unbiased. Thus, we would encourage authority for the development of such educational tools to reside with FDA. Further, FDA should be provided sufficient funding to produce educational materials in accessible formats, including webinars and podcasts.
  
  Finally, the Blueprint requests feedback regarding interchangeability of biosimilars. ASHP supports the development of a robust biosimilars marketplace. We believe interchangeability would likely increase biosimilar uptake. However, biosimilar usage is also impacted by state laws that govern substitution of biologic medications — and many state laws restrict pharmacist substitution of biosimilar products to a higher degree than for small-molecule drugs on the basis of patient safety. Theoretically, such state laws would not infringe on substitution of interchangeable biosimilars, but if they did, it could have a significant adverse impact on the use of biosimilars.
  
  
• Experimenting with Value-Based Purchasing in Federal Programs: ASHP’s support for this policy will depend on how the policy is implemented. In general, ASHP supports efforts to innovate around purchasing, particularly when innovations reduce out-of-pocket costs for patients. However, we have opposed large-scale demonstrations that fundamentally change purchasing without sufficient stakeholder input or notice, such as the Part B payment demonstration that was proposed, and subsequently withdrawn, under the previous administration.
  
  Specifically, we would anticipate that any proposed value-based purchasing programs would be tested on a small scale, ideally through a demonstration project, with significant stakeholder engagement and input. Furthermore, to ensure the development of effective value-based payment models, including indications-based payment models, it is imperative that HHS fully engage with pharmacists at the outset of model development. Pharmacists are the medication experts on the healthcare team, with more medication-specific knowledge and training than any other clinician. Beyond their general medication knowledge, pharmacists are also best situated to provide essential insight into many of the questions outlined in the Blueprint, including those related to purchasing, reimbursement, and drug coding
  
  
• Allowing More Substitution in Medicare Part D: The Blueprint includes this provision as a longer-term goal, and it is in line with ASHP’s policy on substitution.² Again, this is a policy where ASHP’s support will depend on implementation. Before we could support this policy, we would expect to see pharmacists and other members of the patient care team engaged in all decisions regarding substitution for Medicare Part D beneficiaries.
  
  
• Requiring Manufacturer List Prices in Advertising: As ASHP has advocated for increased pricing transparency, we believe that this provision merits further exploration. However, list prices can mean little in the abstract for patients who know their insurers will cover part of the cost. Therefore, although this provision may create public relations headaches for manufacturers of high-priced products, which could theoretically impact manufacturer pricing decisions, it is unclear whether the provision would prompt a change in consumer behavior.
  
  
• Removing the Gag Clause in Part D: We applaud HHS’s recent steps toward removing the Medicare Part D prohibition on informing patients when they could pay less for a drug by paying out-of-pocket rather than through insurance. ASHP supports policies that provide pharmacists the flexibility to assist patients in finding the lowest-cost option available to them.
  
  
• Updating Medicare’s Dashboard to Increase Transparency, and Increasing Communication to Part D Beneficiaries: The Blueprint contains several suggestions for increasing pricing and coverage transparency for beneficiaries. Because ASHP supports measures that provide beneficiaries with greater clarity and control around their drug expenditures, we are generally supportive of this type of change.
  
  

II. Areas of Concern

The Blueprint includes a number of undefined references to wholesale changes to federal programs, and these are generally our areas of concern.

• Reforms to the 340B Drug Discount Program: ASHP is particularly troubled by the administration’s insistence that the federal 340B program contributes to high drug prices. ASHP strongly opposed the recent Centers for Medicare & Medicaid Services (CMS) cuts to the 340B program, and we will continue to oppose efforts to undercut a program that benefits patients.³
  
  The federal 340B program is essential to many hospitals’ ability to provide care to uninsured and underinsured patients. The discounts received through the program not only enable patient access to free or low-cost medications, but also help offset the total cost of uncompensated care, which may include critical services such as chemotherapy and HIV treatments. Hospitals serving the poor shoulder more of the financial burden of caring for patients who are uninsured or underinsured.⁴ Unlike other settings, where insurance coverage or ability to pay may be a requirement for service, covered entities within the 340B program are often the sole option for poor or uninsured patients to receive care. Absent discounts on 340B-purchased drugs, many covered entities may struggle to keep their doors open, as they would be unable to absorb the cost of providing uncompensated care to the most vulnerable patients.
  
  ASHP recognizes that the 340B program has grown, but that growth has been a direct result of congressional action — specifically, the expansion of covered entity eligibility in the Affordable Care Act.⁵ Furthermore, even with that growth, the 340B program represents only a fraction of total drug expenditures. There are many contributing factors to higher drug costs, but there is no objective evidence that the program has increased overall drug pricing. In fact, the 340B program is revenue-neutral, benefiting patients without increasing costs for federal payors.
  
  Although the Blueprint does not detail any potential programmatic changes, it does request specific feedback on certain elements, including the Prime Vendor Program (PVP), the patient definition, and program oversight, including the duplicate discounts prohibition. We address each of these elements below:
  
  
  • PVP: ASHP supports the PVP, which lowers drug pricing. The PVP helps participants comply with the requirements of the program by providing significant savings through sub-ceiling and sub-WAC pricing. This pricing is voluntary for manufacturers and provides an efficient and market-based approach to lower drug pricing for hospitals.
    
    
  • Patient Definition: ASHP does not currently have policy directly related to the patient definition, but we would note that covered entities comply with the current Health Resources and Services Administration (HRSA) guidance. Neither child sites nor contract pharmacies increase patient eligibility — they simply enhance service and medication accessibility for eligible patients. We anticipate that any changes to these program elements would be accomplished through notice-and-comment rulemaking, with ample time for stakeholder feedback.
    
    
  • Duplicate Discounts and Program Oversight: Covered entities ensure compliance with the duplicate discount prohibition in a variety of ways, including through the Medicaid Exclusion File and complying with additional state and plan requirements. As to oversight more generally, we would remind HHS that it recently pulled a civil monetary penalties rule that would have increased oversight of manufacturers in the 340B program to better approximate the oversight of covered entities. Thus, rather than focusing solely on the covered entities that participate in the 340B program, perhaps HHS should enhance oversight of all participants in the program to ensure relative parity.
• Requiring Site Neutrality in Payment: ASHP urges caution in changing site-specific reimbursement for outpatient departments and physicians’ offices as well as inpatient and outpatient settings. Any change should be made only after significant consultation and engagement with stakeholders and subject to notice-and-comment rulemaking. The differential in costs between settings generally reflects variances between overhead and handling, and in the case of Part A, safety concerns that may be specific to certain medications. The Blueprint alludes to the possibility of significant shifts in patient care, asking, in the Part A context, “how should Medicare encourage the shift to outpatient settings?” Shifting patients between care settings has ramifications far beyond medication and facility fee expenditures, including unnecessary fragmentation of care, patient access challenges, and the possibility that certain care settings may not have the capacity to treat large numbers of new patients. Thus, as HHS considers site neutrality, we strongly urge the agency to view the impact of changes holistically, rather than solely through the medication expenditure lens.
  
  
• Reforms to Rebates in Medicaid and Medicare: ASHP is intrigued by the possibilities inherent in reforming Medicare and Medicaid rebates. However, as with other policies discussed above, changes to rebates may have wide-ranging impact, and our support will be wholly dependent on policy details. Should the rebate changes be designed to provide benefit to patients in the form of reduced out-of-pocket costs, or to remove barriers such as retroactive direct and indirect remuneration, ASHP may be supportive. However, if the changes damage patient choice through, for example, changes to Part D formulary standards that would require only one covered drug per category or class rather than two, then ASHP may be less supportive. ASHP would expect that changes would allow for sufficient stakeholder feedback to protect against any unintended adverse consequences for patients or clinicians.
  
  
• Merging Part B Drugs into Part D: The Blueprint notes that the President’s Budget requests authority to move some Medicare Part B drugs to Medicare Part D. We are very concerned about the possibility of shifting Part B drugs into Part D without careful study and analysis. First, there would have to be some agreement on how to identify candidate drugs. In many cases, Part B drugs are physician-administered, making them poor candidates for Part D. If the thought is that patients can pick up their drug and then bring it into the physicians’ office (a practice known as “brown bagging”), that raises a host of safety and cost considerations. Will the medication be safely stored? Is there an increased likelihood of diversion? Will the patient need to make additional trips to the pharmacy and/or the physicians’ office to handle the drug? Are there overlapping charges (e.g., copays) for these visits? Further, given the administration’s statements on the contributions of pharmacy benefit managers (PBMs) to rising drug prices,⁶ we question whether PBMs should engage in the Part B space. In short, there are significant operational and financial concerns associated with the proposal, and ASHP would expect any change to be carefully vetted and thoroughly tested before it is introduced nationwide.
  
  

III. Conclusion

ASHP appreciates this opportunity to offer our input on the Blueprint. As noted above, ASHP shares HHS’s commitment to reducing drug prices, and we are very willing to work with the agency to help identify and implement meaningful solutions. If you have any questions or wish to discuss our comments further, please contact me via email at [email protected] or by phone at (301)-664-8806.

Sincerely,

Jillanne Schulte Wall, J.D.
Director, Federal Regulatory Affairs

____________

¹See ASHP, Drug Shortages Roundtable Report (Nov. 6, 2017), available at https://www.ashp.org/-/media/assets/drug-shortages/docs/drug-shortages-nov-2017-shortage-meeting-report.ashx.
²See e.g., ASHP Policy 0817: Generic Substitution of Narrow Therapeutic Index Drugs, available at https://www.ashp.org/-/media/assets/policy-guidelines/docs/policy-positions/policy-positions-formulary-management.ashx?la=en&hash=DC8648C51DA367C6BDFFB29C8C61643DA6DFA35E.
³See ASHP, ASHP Comments on the CY 2018 Outpatient Prospective Payment System (OPPS) Proposed Rule (Sept. 11, 2017), available at https://www.ashp.org/-/media/assets/advocacy-issues/docs/ashp-comments-on-opps-rule.ashx?la=en.
⁴For example, by law, disproportionate share hospitals (DSHs) must serve a disproportionate percentage of low-income patients compared to non-DSH designated hospitals. See 42 U.S.C. § 256b(a)(4)(L)(ii).  
⁵See Patient Protection and Affordable Care Act (“ACA”), Pub. L. No. 111-148, §§ 2501, 2902, 3402, 7101-03, 124 Stat. 119, 309, 333, 488, 821-28 (2010).
⁶See, e.g., American Patients First: The Trump Administration Blueprint to Lower Drug Prices, Reuters (May 2018), p. 17 (stating high drug costs are due in part to “a hidden negotiation and wealth transfer between drug manufacturers and PBMs” resulting in “a direct increase on consumer out-of-pocket spending that likely decreases drug adherence and health outcomes”); Yasmeen Abutaleb, Trump Assails High Drug Prices, Avoids Direct Hit on Industry (May 11, 2018), available at https://www.reuters.com/article/us-usa-trump-drugpricing/trump-assails-high-drug-prices-avoids-direct-hit-on-industry-idUSKBN1IC2C0; Clinton Leaf, The Drug Industry’s Middlemen Are In The Hot Seat, Fortune (May 21, 2018), available at http://fortune.com/2018/05/21/drug-prices-pharmacy-benefit-managers/.