APhA Legislative & Regulatory
Update
December 2006
In this issue:
On December 15th, CMS released its proposed drug pricing regulation implementing the Deficit Reduction Act. The proposed rule would shift the Medicaid program’s prescription drug reimbursement for multiple source (generic) drugs to an Average Manufacturer Price (AMP) formula. The public, including APhA members, will have 60 days to comment following today’s official publication of the rule in the Federal Register, which can be viewed at: http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-9792.pdf
Unfortunately, it appears as though neither of APhA's gravest concerns were adequately addressed in the proposed regulation. First, the proposal continues to include mail-service pharmacy in its definition of retail pharmacy, which will be used to calculate AMP. APhA is concerned that by including mail-service pharmacy rates in the calculation of AMP the result may be an AMP that is lower than the rate at which community pharmacy can purchase drug products. Second, the proposal does not address dispensing fees. Instead, it continues to leave it up to States to determine what “reasonable” dispensing fee to pay pharmacists. On average, State Medicaid programs pay a $4 dispensing fee when studies indicate that it costs approximately $10 to dispense a medication. APhA will continue to advocate for changes that help ensure that pharmacy is adequately reimbursed.
Watch for additional information including a summary of the regulation in future APhA communications.
Back to TopOn December 20th, the President signed a large tax bill (H.R. 6111) that Congress approved just before adjourning. Section 202 of this bill attempts to address provider concerns with payment for vaccine administration, particularly with new vaccines, by directing CMS to fund the administration of vaccines under Medicare Part B.
As described in a CMS memo, Part D plans are required to provide access to vaccines not covered under Part B. A challenge has been that administration and professional fees may not be included as part of the Part D dispensing fee. Additionally, vaccine administration fees under Part B are only permitted for the administration of a Medicare-covered “preventative” vaccine – influenza, pneumococcal, Hepatitis B – along with “medically necessary” vaccines to treat illness or injury. Therefore, providers have had to direct patients to pay cash and submit paperwork to their plans for reimbursement. This process has not worked well.
Concerned with the impact that this lack of reimbursement was having on patient access to vaccines, Congress directed CMS to fund the administration of Part D vaccines under Part B in 2007, and to create a system that would pay for these services under Part D starting in 2008.
APhA was very involved in securing this change. However, because CMS has to date resisted industry calls to affect similar changes through the administrative process, it is unclear how CMS will implement this new mandate.
Back to TopHIPAA covered entities, including pharmacists, are required to begin using the National Provider Identifier (NPI) by May 23, 2007. Apply for the NPI now in order to meet the fast approaching deadline - it can take up to four months to process an NPI application. Pharmacists may apply for an NPI online or print a paper application from https://nppes.cms.hhs.gov.
For more information on NPI visit the APhA Government Affairs website.
Back to TopOn December 6th the House Ways and Means Committee held a hearing to address End Stage Renal Disease (ESRD), which focused on how Medicare pays for drugs used to treat kidney failure. The hearing provided a platform for committee members to express their concerns with the current reimbursement system and how it may negatively impact patient care by creating incentives for over-dosing. Currently, certain dialysis services are paid under a bundled “composite” rate; however, Medicare pays a separate rate per dose for certain dialysis-related drugs. Of these separately billed drugs, the anti-anemia drug Epogen is the most prescribed in Medicare Part B, is the most expensive, and has no competitor in the market. Questions were raised at the hearing about Epogen’s lack of competition and the fact that it is the most frequently billed medication in Medicare Part B with 2005 payments amounting to $2 billion. Several committee members expressed interest in pursuing legislation to change the way that the Medicare program pays for Epogen.
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Back to TopBefore adjourning, Congress sent a bill (S. 3546) to the president for his signature that would require over-the-counter and dietary supplement manufacturers, “packers”, and distributors to report to the Food and Drug Administration (FDA) any serious adverse drug events to their products within 15 business days of any reports associating serious adverse events with their products or face criminal sanctions. This marks the first major reopening of dietary supplement law since 1994.
These entities would be required to offer any related medical information received within one year of the initial report and to maintain records related to each report for six years. The bill also calls for the labels of over-the-counter drugs and supplements to include an address and phone number for reporting serious adverse events. Companies that do not make reports or provide access to records could face prison sentences up to a year and fines up to $1,000 for each offense. Pharmacists may play a limited role in directing consumers to whom they can report any adverse events.
The bill defines serious adverse drug events as health-related events that result in death, in-patient hospitalization, a persistent or significant disability, a life-threatening experience, or a congenital anomaly or birth defect.
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Back to TopThe Partnership for Safe Medicines Today recently released a guide to help pharmacists avoid, detect, and report counterfeit medications entitled “Simple Steps for Safe Sourcing.” This Safe Sourcing guide provides an overview of the best ways to avoid counterfeit or contraband medications, risk factors for physical examination, and clear instructions on how to report cases to the Food and Drug Administration (FDA) and state regulators. The guide is posted online at www.safemedicines.org.
While the Safe Sourcing guide is geared for pharmacist use, patient awareness is important to the fight against counterfeit medications. A patient resource is also available at www.safemedicines.org, offering email alerts and a downloadable “SAFEDRUG” checklist.
Back to TopOn December 19th, President Bush signed a bill to renew the Ryan White CARE Act for three years, shifting AIDS money to rural areas and the South. The bill governs approximately $2 billion a year for drugs and services for HIV and AIDS patients. President Bush also signed a bill (S. 3678) to create a new agency within the Health and Human Services (HHS) Department, the Biomedical Advanced Research and Development Authority, to oversee the development of vaccines to respond to a terrorist attack or bird flu pandemic.
Congress also moved forward on a bill involving the reorganization of the National Institutes of Health (NIH) and children’s health insurance. Just before concluding the 109th session, the Senate passed a bill (H.R. 6164) to restructure the NIH, amending it to increase authorized spending for the research agency and to redistribute approximately $271 million within the State Children’s Health Insurance Program (SCHIP). The amendment forced the bill back to the House, where it was approved.
Back to TopThe recent midterm elections created a dramatic shift in power in Washington D.C., giving Democrats control of both the House of Representatives and the Senate for the first time in over a decade. Democrats have since indicated that healthcare issues will be a top priority for their new majority. Consequently, the profession will likely face both opportunities and challenges during the 110th Congress, making your advocacy support crucial in the months ahead.
Some of the key healthcare issues on the Democratic priority list include drug safety, prescription drug importation, Medicare Part D, universal healthcare coverage, reauthorization of the State Children’s Health Insurance Program (SCHIP), and health information technology (Health IT). With the Prescription Drug User Fee Act (PDUFA) set to expire this year, reauthorization is also expected to be addressed and with it a cluster of proposals that address drug safety.
Prescription drug importation is a “hot button” issue that will probably see activity in the 110th Congress, especially since several Democrats argued for legalizing it during their campaigns. Prescription drug importation not only increases the possibility that patients will receive counterfeit medications; it also directly impacts patient care by hampering pharmacists’ ability to monitor patient responses to medication and prevent potentially lethal drug interactions. This session, Congress took a step toward legalizing importation by preventing U.S. Customs and Border Control officials from stopping individuals from importing (on their person) a 90-day supply of certain medications. With the 110th Congress likely to address importation, APhA will continue to oppose proposals that threaten the integrity of our drug supply. No proposal has yet met that threshold
The Democrats’ takeover of the Senate gives Sen. Edward Kennedy (D-MA) the Chairmanship of the Health, Education, Labor and Pensions (HELP) Committee. Sen. Kennedy’s priorities include closing the Medicare coverage gap as a way to improve the Part D Medicare Drug benefit. He is also interested in expanding Medicare to everyone under the age of 65 as a step toward universal healthcare coverage. Sen. Kennedy proposes using funding from reduced payments to Medicare managed care plans and allowing the Secretary of Health and Human Services (HHS) to negotiate discounted drug prices to partially finance these projects. Sen. Kennedy has also shown interest in creating incentives to speed up providers’ adoption of Health IT.
Sen. Max Baucus (D–MT), who is set to chair the Senate Finance Committee, does not endorse Democratic efforts to give HHS authority to negotiate drug prices, but he is expected to make a push to overhaul certain parts of the Medicare Part D benefit. In the past he has shown strong support for amending aspects of Part D that negatively impact pharmacists. With regards to fundamentally altering the program, Sen. Baucus reportedly would prefer to allow more time for the Part D benefit to work as designed before considering Medicare legislation. He has also expressed his intent to strengthen Medicaid.
Rep. John Dingell (D–MI) is returning in the 110th Congress as Energy & Commerce Committee Chair, a position he lost in 1994 when Republicans seized control of the House. Rep. Dingell plans to focus the committee’s work on direct negotiations with drug manufacturers for Medicare Part D. Additionally, Dingell is expected to address drug safety, including dietary supplement laws — an area in which he has sponsored safety and regulation legislation in the past. He is also likely to attempt to revamp drug patent laws in an effort to allow faster marketing of generic drug products.
Rep. Frank Pallone (D-NJ), is the frontrunner in the race for the House Energy & Commerce Health Subcommittee chairmanship. He has indicated plans to increase restrictions on health claims for food and dietary supplements.
It is clear that pharmacists will be facing another multitude of policy issues at the federal level during the 110th Congressional session. Your advocacy support will be crucial in the months ahead, as your professional experience and personal insight can make a significant impact on issues open to public comment. We welcome your feedback on how we can further improve our collaboration with you to ensure that the profession’s voice is heard. Please feel free to e-mail us at gvtaff@aphanet.org.
Back to TopIncoming Democratic leaders of the Senate and House Appropriations Committees recently announced that they intend to pass a continuing resolution to fund the unfinished 2007 appropriations bills. Such a measure would fund the effected federal programs at the same level as the previous year despite additional spending for items such as mandatory salary increases. The Democratic leaders have stated that their goal is to eliminate controversial earmarks over the next nine months while they consider President Bush’s 2008 budget request, which is required to arrive before February 1st. In the meantime, some have suggested that an additional $7 billion be added to the HHS appropriations bill in order to avoid any unintended consequences related to staffing at such vital agencies as the FDA and HHS.
Back to TopIf you have any questions about the information in the Legislative & Regulatory Update, do not hesitate to contact a member of the APhA Policy & Advocacy Staff.
Susan K. Bishop,
MA
Director, Federal Regulatory Affairs
202/429-7538
SBishop@APhAnet.org
Hrant Jamgochian, Esq.
Director, State Relations and Political
Action
202/429-7575
HJamgochian@APhAnet.org
Kristina E. Lunner
Senior Director, Government
Affairs
202/429-7507
KLunner@APhAnet.org
Susan C. Winckler, RPh, Esq.
Vice President, Policy & Communications and Staff
Counsel
202/429-7533
SWinckler@APhAnet.org