NCPA Advocacy Update

Week ending Dec. 21

Author: APCI Staff/Wednesday, December 26, 2018/Categories: Legislative Affairs

What CMS' proposed DIR rule does – and doesn't do

CMS' proposed drug pricing rule released two weeks ago embraces several innovative ideas, some of them controversial – for instance, changes to protected classes of medications and expansion of step therapy as a cost-saving tool. Of interest to NCPA, though, are provisions that would eliminate the retroactive application of pharmacy DIR fees.

What the rule does:

  • Changes the definition of negotiated price concession to force PBMs to include all pharmacy price concessions (aka pharmacy DIR) at the point of sale.
  • Redefines the term "price concessions" to embody only types of pharmacy DIR that a pharmacy would encounter in a PBM contract.
  • Excludes pharmacy incentive payments from being included in the negotiated price at the point of sale. This would mean plans/PBMs can pay only positive performance-based payments to pharmacies after the point of sale. No clawbacks can occur post point of sale.
  • Requires that "pharmacy administrative service fees," such as "network access fees, administrative fees, technical fees, and service fees," that the PBM does not classify as pharmacy DIR not be charged to pharmacies.

What the rule doesn't do:

  • Doesn't eliminate DIR fees altogether – but it's a step toward elimination, and CMS is open to further discussion on complete elimination, a point NCPA continues to press. Meanwhile, more than 96 percent of NCPA members tell NCPA that ending retroactive fees is their top priority. Much like S. 413 / H.R. 1038, the federal legislation supported by NCPA, this proposed rule would bring predictability to pharmacy owners' cash flow. (Bear in mind, a "mystery" rule related to rebates still awaits action by the Office of Management and Budget. That rule contemplates overhauling the rebate system, and may address DIR. At this point, no one knows exactly what's in that rule.)
  • Doesn't increase or decrease payments to pharmacies. That's a point that CMS officials made clear on a pharmacy stakeholder call Dec. 7. Instead, the proposal would change the way that plans report data to CMS. In the proposed rule, CMS indicates that under the current pharmacy DIR process, most pharmacies are already being assessed the lowest possible reimbursement, albeit months after a transaction. This proposed change simply redefines the negotiated price to reflect that reality, so pharmacies know their baseline reimbursement up front. This change would also move the pharmacy's point-of-sale reimbursement closer to the actual cost of the drug for the Part D sponsor.
  • Doesn't allow PBMs to claw back fees, period. CMS has clarified that only positive incentive payments to pharmacies can occur after the point of sale.

NCPA is pulling out the stops to urge our members, patient groups, and other partners to send CMS comments in support of those provisions, and we've made it easy for you to do that here. In addition, we've provided a resources page with tools to help you learn more about – and urge others to comment on – the rule.


NCPA offers comments on CVS/Aetna merger

NCPA has raised a multitude of significant competitive concerns since the CVS-Aetna merger was announced. Last week, NCPA submitted comments outlining our objections and concerns to a combined CVS-Aetna.

Our major objections:

  • The merger will lead to decreased competition and fewer choices for patients.
  • There's no evidence to support that the purported cost savings will lead to lower prices or be passed on to consumers.
  • Several states have imposed conditions on the CVS/Aetna merger that were not included in the proposed consent decree.

NCPA also noted that the DOJ failed to address many of these concerns in the proposed consent decree.

On Tuesday, Federal Judge Richard Leon, who is carrying out judicial review of a DOJ settlement that allows the tie-up to move forward, said he was considering appointing the monitor overseeing the divestiture of a Medicare drug plan to WellCare Health Plans Inc. to also watch over CVS' measures to gain clearance.

Since a Dec. 3 hearing in which the judge spoke of a broader view of the Tunney Act judicial role in the merger review process, CVS unveiled steps to deal with the judge's concerns including running Aetna's health insurance business as a separate unit from CVS' retail and PBM businesses; ensuring that Aetna maintains its "historical control" over pricing and product offerings brought to market; and maintaining a firewall to prevent the exchange of competitively sensitive information between CVS Health and Aetna.


NCPA state advocacy priorities for 2019

NPCA is aiming to change the pharmacy payment model by working with our state partners on our state advocacy priorities to bring transparency to payments, PBM accountability to taxpayers, and fairness to community pharmacies. Specifically, we'll focus on:

  1. Medicaid managed care payment reforms.
  2. Comprehensive PBM regulation.
  3. Scope of practice expansion and compensation for patient services.

Within each of those categories are more specific objectives, and we are supporting state partners in achieving them. NCPA will offer state partners a menu of advocacy and grassroots services on the three priority issues, from bill drafting and review to preparing testimony to grassroots calls to action.


NCPA raises concerns on the disclosure of the list price
in direct-to-consumer advertisements in comments to CMS

This Monday, NCPA submitted comments to CMS on a recent proposal to require the disclosure of the “list price” (the Wholesale Acquisition Cost (WAC)) in drug advertisements (click here to view). NCPA raised concerns that this proposal would not to lower drug prices, reduce patients’ out-of-pocket costs, and increase transparency in healthcare because a patient’s prescription drug cost is based on several factors, including a patient’s insurance plan, which is not tied to a drug’s list price. Thus, this proposal could deter patients from picking up their needed medications from pharmacies. NCPA also stressed the crucial role a pharmacist plays in drug counseling to find lower cost alternative medications and the importance that pharmacists be paid for providing such services. As an alternative to the proposal, NCPA has joined PhRMA and other consumer, patient, and provider groups to develop a new patient affordability platform that will launch in early 2019. The new platform will include resources like an enhanced search tool that would provide medicine-specific public cost and affordability information.


HHS’ Office of Inspector General (OIG) puts investigation
of DIR reporting on its workplan

HHS’ OIG has slated an investigation of DIR reporting on its workplan, which is slated to be published in the upcoming year. HHS Secretary Azar first flagged this investigation last spring in a senate hearing in response to senator’s questions on the impact of DIR fees on community pharmacies. The summary of the investigation states that in the published report, “[w]e will determine whether Part D sponsors complied with Medicare requirements for reporting DIR.” NCPA continues to monitor when the final investigation will be published in 2019.


Meeting with Deputy White House Political Director

NCPA and NACDS met with the Deputy White House Political Director to discuss the proposed drug pricing/DIR rule and urged the White House weigh in with OMB. Discussed was the negative impact retroactive DIR fees and the fees themselves were having on community pharmacies. Also, we discussed the savings to seniors should this the rule be finalized, and the rule accomplished the President’s goal of reducing the cost of prescription drugs.


Final rule on ACOs flags pharmacy coordination as key
but provides no specifics

Earlier this fall, CMS issued a proposed rule on the ACO program that solicited comments on how Part D plans could be incorporated into the current ACO model in Medicare. In our comments, NCPA advocated for the inclusion of community pharmacists in ACOs but recommended that today’s Part D structure often disadvantages community pharmacists due to inconsistent quality metrics that lead to poor reimbursements and the restrictive nature of preferred networks. While the final rule recognized NCPA’s comments, the rule did not provide specifics on how to encourage ACOs to utilize pharmacies, and instead stated “as we plan for any future updates and changes to the Shared Savings Program, we will consider this feedback from commenters before making any proposals related to the coordination of pharmacy care.”


Texas federal district court rules to strike down ACA

Last Friday, the Texas federal district court ruled to strike down the Affordable Care Act (ACA), holding that the “individual mandate” is unconstitutional since it is no longer a constitutional tax after Congress zeroed it out in 2017. The court went on to rule that all the other provisions in the ACA are not “severable” from the individual mandate, that the individual mandate is essential to the ACA, and therefore the other provisions of the ACA must be struck down as well. However, the court’s decision will not immediately affect the ACA as it still has to move through the federal appeals process and could possibly be appealed to the Supreme Court. NCPA will continue to monitor this ruling for any impact on community pharmacy, such as essential health benefits, anti-mandatory mail order, and Average Manufacturer Price based FULs provisions in the ACA.


Save the date: NCPA 2019 Congressional Pharmacy Fly-In
April 10-11

Successful advocacy is built on relationships. You'll build – and build on – those important relationships at the 2019 NCPA Congressional Pharmacy Fly-In. The format is simple and perfect for a busy owner/pharmacist: Fly in, get briefed, go to Capitol Hill, share your story with members of Congress, fly home. It couldn't be easier – or more effective. So, save the date – April 10-11. We'll see you there!


NCPA’s Advocacy Center Update provides a weekly detailed summary of recent and breaking legislative, regulatory, and state developments impacting independent community pharmacy and NCPA’s efforts to affect policies benefitting its membership and the industry. The weekly update is distributed to NCPA leadership, steering committees, allied organizations/stakeholders and major contributors to the NCPA LDF and PAC.

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