HealthCare Roundtable e-News – April 28, 2017

Bipartisan Bill to Thwart Efforts to Block Generic Drugs Reintroduced

Lawmakers in both the House and the Senate have reintroduced legislation aimed at preventing brand-name drug manufacturers from engaging in certain practices that block generic competition.

The Public Sector HealthCare Roundtable is supporting the proposal.

Generic drug manufacturers and supporters of increased use of generics charge that brand-name companies sometimes use risk evaluation and mitigation strategies (REMS) and similar programs that are typically intended to control the distribution of medicines for which there are safety concerns to deny generic firms access to their products. Without such access, generic firms are unable to show the bioequivalence – or, in the case of biologics, biosimilarity – that is needed for approval by the Food and Drug Administration (FDA).

The “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act,” which was introduced by both Republican and Democratic leaders of the House and Senate Judiciary Committees on April 27, would allow generic companies to bring federal lawsuits and seek damages when brand-name companies improperly withhold their products. (Summary)

“When brand companies can drive up the price of drugs through predatory practices, patients suffer,” Senate Judiciary Committee Ranking Democrat Patrick Leahy of Vermont said. “Illnesses worsen. Families, government programs and other payers in the health care system ultimately bear those added unnecessary costs. Strategies wielded by these firms to delay entry of lower-cost generic drugs are wrong, and they cause real harm. Drug affordability is a bipartisan issue that affects every American. This needs to be a high priority.”

Leahy unsuccessfully introduced the same bill in 2016.

The Public Sector HealthCare Roundtable signed on to an April 27 letter to lawmakers supporting the proposal.

“Many of these restricted distribution setups are implemented completely independently from FDA mandates, and exist solely to exert control of who purchases the product,” the letter stated. “These abuses are growing and the resulting delay in generic and biosimilars competition is costing patients, the federal government, and the health care system billions of dollars annually.”

Seventeen other groups, including AARP, America’s Health Insurance Plans and Public Citizen, also signed on to the letter.

The Roundtable signed a letter supporting Leahy’s bill last year.

A similar proposal, the “Fair Access for Safe and Timely (FAST) Generics Act” (H.R. 2051), which would prohibit brand-name companies from using REMS “in a way that restricts or has the effect of restricting the supply of such covered product to an eligible product developer for development or testing purposes,” was introduced by Reps. David McKinley, R-W.V., and Peter Welch, D-Vt., on April 6. The Roundtable is also supporting that bill. It backed a similar effort in 2015.

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GOP Health Care Plan Shelved Again

The Republican health care proposal is still dead.

In March, GOP leaders of the House of Representatives withdrew the “American Health Care Act” (H.R. 1628) from consideration just before a scheduled vote when it became clear that, despite having a significant majority of the chamber’s members, they lacked the support needed for passage. This thwarted the fulfillment of one of the Republican Party’s top goals for the past seven years – repeal of the Patient Protection and Affordable Care Act (ACA) – after it seemed since November, when Donald Trump was elected president and Republicans held on to their majorities in both the House and Senate, to be a sure thing.

Intraparty negotiations have been ongoing since then, and there had been talk of holding a vote in the House before the 100th day of President Donald Trump’s administration. However, for the third time in a little over a month, Republicans abandoned plans to try to advance the bill because of a lack of support.

“We’re still educating members,” House Majority Leader Kevin McCarthy, R-Calif., said, adding, “We’ve been making great progress. As soon as we have the votes, we’ll vote on it.”

The latest effort to revive the proposal was made more difficult by the need for Congress to pass a temporary spending bill by April 28 in order to avoid a partial government shutdown. House Democrats had indicated that they would not cooperate in that effort if Republicans first tried to push through their health care bill.

One of the biggest challenges for Republicans is that they must craft a health care plan that satisfies moderates, who were concerned about projections that the original proposal would increase the number of people without insurance by 24 million within a decade, and conservatives, who disparaged the plan as “Obamacare Lite.”

The most recent revisions won over some conservatives but may have driven away more moderates. The plan would reportedly, among other things, allow states to opt out of ACA requirements establishing “essential health benefits,” provided they had created “high-risk” pools; allow insurers to charge higher premiums based on a person’s health status; and increase the additional amount that insurers can charge older people – the ACA limits it to three times the premiums charged younger beneficiaries. While insurers would still be prohibited from denying coverage based on pre-existing conditions, critics say that the Republican plan would allow them to make coverage for sick individuals so unaffordable that it would be equivalent to a denial.

Even if the bill were to pass the House, it may not fare well in the Senate, both for political and procedural reasons. Republicans have only a two-vote majority in that chamber, and several GOP senators have already expressed doubts about the proposal. In addition, the original plan was to structure the bill in such a way that it could be passed using the budget reconciliation process, which is limited to tax and spending-related measures. This procedure does not allow for filibusters and, thus, would require only a simple majority of votes to get through the 100-member Senate, rather than a 60-vote supermajority that would otherwise be needed. However, adding the provisions related to essential health benefits could mean that, if the legislation reached the Senate, it might be deemed not to be in compliance with budget reconciliation rules, which would lead to a Democratic filibuster and a 60-vote threshold having to be met for passage.

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Judge Declines to Consolidate Medicare Advantage Fraud Lawsuits

A federal judge has turned down a request by the Department of Justice (DOJ) to combine a pair of whistleblower lawsuits that accuse UnitedHealth of defrauding the Medicare Advantage program.

Medicare Advantage offers managed care plans through private companies, which receive a fixed amount of money from the federal government per beneficiary each month. About 18 million people – roughly one-third of all Medicare beneficiaries – are in Medicare Advantage. Payments for a given beneficiary are based on an individualized “risk score” and are higher for patients who are identified as being sicker and, thus, more demanding of health care services. Audits have found that, in some cases, insurers appear to have exaggerated the ailments of their beneficiaries, overbilling CMS for potentially billions of dollars.

The DOJ in March joined a lawsuit originally filed in 2009 that accuses UnitedHealth Group, the largest Medicare Advantage insurer in the country, of reporting to the Centers for Medicare & Medicaid Services (CMS) inflated risk scores that indicated that patients were sicker than they really were. A month earlier, the department joined a separate but similar case filed in 2011 that accuses UnitedHealth of submitting false Medicare Advantage claims. That lawsuit also names 14 other companies, but the Justice Department is only participating in the case against UnitedHealth and a subsidiary of that company, WellMed Medical Management.

The agency requested that the lawsuits be consolidated, but a federal judge on April 27 declined to do so.

The judge noted in the ruling that, among other things, that the DOJ has not yet filed its complaints in the cases, “which will determine the scope and focus of both lawsuits,” and that, “The presence of more than a dozen parties in one case but not the other would significantly complicate the prospect of consolidation.”

“Given the complications that immediate consolidation would produce, the Government bears the burden to persuade the Court that there are significant advantages to be gained from consolidating the cases now rather than waiting and revisiting the issue in a few months,” the ruling stated. “The Government has not met that burden.”

The Justice Department may renew its effort to combine the cases after it files its complaints.

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Ohio SERS Asks Lawmakers to Stabilize Exchanges

The School Employees Retirement System (SERS) of Ohio is asking lawmakers to implement measures that would strengthen the health care exchanges.

The Patient Protection and Affordable Care Act (ACA), which was passed in 2010, created state-level exchanges – also known as marketplaces – that were launched in 2014 in which people who do not have access to affordable group coverage can buy insurance, in many cases using income-dependent advance premium tax credits. States were not required to establish exchanges, but the federal government created one in any state that did not.

Ohio SERS Interim Executive Director Helen Ninos expressed concern in a letter to members of the Ohio congressional delegation that, as President Donald Trump and Republican lawmakers have talked about repealing and replacing the ACA, “it is unclear whether there is support by the Trump administration to stabilize the Marketplace until a new structure is designed. The lack of commitment to stabilizing the current Marketplace is problematic for us because it is likely to lead to fewer insurers and higher premiums for our retirees in the Marketplace.”

The letter made three requests of Congress:

  • Fund the cost-sharing reduction payments that Trump has hinted he might not pay to insurance companies that participate in the exchanges
  • Continue the individual mandate until a new or revised health care plan is put in place
  • Make the reinsurance payments that are owed to insurers for 2016 and settle the risk corridor payment litigation.

“SERS recognizes the Marketplace could be improved,” Ninos wrote. “We believe the actions outlined above will stabilize the situation, and prevent further deterioration while a new solution is being developed.”
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