Pharmaceuticals and PBMs

If you happen to miss our NHIA Talk Infusion Webinar on Compliance and Risk Considerations for Compounding Pharmacies, please click on the link to enjoy a free on-demand recording.

Our program guides you through the current landscape and common compliance concerns in compounding. We will help you understand the focus of FDA and state boards of pharmacy, including the areas of greatest risk and how to protect your business. You will also learn how to respond to an FDA inspection regarding a variety of areas, from onsite triage to handling requests for records and remediation.

Presenters include:

Bruce Ball, CEO, Britton Gallagher

Greg Rockers, Managing Director, Williamson Rockers Group

Wakaba Y. Tessier, Partner, Husch Blackwell

Brian Williamson, Managing Director, Williamson Rockers Group

Renee Zerbonia, Attorney, Husch Blackwell

For more information on compliance and risks associated with compounding pharmacies, please contact a member of the Husch Blackwell Pharmacy Team.

The Trump Administration’s latest effort to limit the power of pharmacy benefit managers (“PBMs”) is marred by economic uncertainty and looming legal scrutiny.  The Office of Inspector General (“OIG”) within the Department of Health and Human Services (“HHS”) recently released a proposed rule (“proposed rule”) removing safe harbor protection under the Anti-Kickback Statute (“AKS”) for prescription drug rebates (“drug rebates) paid by a manufacturer to Medicare Part D plan sponsors and Medicaid managed care organizations (“MCOs”) or their PBMs.  The rule also creates new safe harbor protections for point-of-sale reductions in price and certain PBM services fees.[1]   The long-awaited proposed rule follows months of anticipation after the Trump Administration released its May 2018 Blueprint to reduce prescription drug costs.[2]

PBMs in Brief

PBMs, on behalf of health plans, employers, and other entities, negotiate and contract with drug manufacturers to obtain rebates on prescription drugs dispensed to health plan members.  By aggregating their collective scale and purchasing power of all health plan or employer group clients, PBMs can negotiate better deals with the manufacturer than any one plan or group operating independently.  Rebates are typically negotiated on brand-name drugs that compete with therapeutically-similar brands and generics. These retroactive rebates (after point-of-sale) are based on a multitude of factors, including a drug’s placement in a plan formulary designed by the PBM, and the PBM’s power to increase a manufacturer’s market share for specific drugs by inclusion on a formulary.  A manufacturer may provide a greater rebate if its product is included in a “preferred” position on the PBM formulary. Continue Reading HHS Targets PBMs But May Exceed Its Legal Authority in Proposed Rule Eliminating AKS Protection for Drug Rebates

On September 10, 2018, the federal Food & Drug Administration (”FDA”) released its revised draft standard Memorandum of Understanding (“MOU”) between states and the FDA addressing the interstate distribution of compounded drug products.  See 83 Fed. Reg. 175, 45631 et seq. (Sept. 10, 2018). The draft is the latest in the FDA’s decades-long effort to clarify state and federal roles in investigating and responding to complaints related to compounded drug products shipped between states. Continue Reading FDA publishes revised draft MOU addressing state and federal oversight of 503A compounding pharmacies

The National Association of Specialty Pharmacy (NASP) recently issued its comments in response to the Department of Health and Human Services’ (HHS) request for information related to HHS’s Drug Pricing Blueprint.[1]  The Blueprint is part of the Trump Administration’s initiative to lower prescription drug prices.  Center for Medicare and Medicaid Services (CMS) Administrator Seema Verma has said that “[l]owering drug prices is a top priority for the President and CMS, and the agency is committed to finding innovative ways to increase competition and lower out-of-pocket costs for consumers.”[2]  Continue Reading NASP Comments on the HHS Drug Pricing Blueprint

The Inspector General took an unprecedented step Tuesday, rescinding a favorable Advisory Opinion first issued in 2006 that had provided assurances to the patient assistance charity, Caring Voice Coalition, that its drug subsidy program would not expose the organization to liability under the Anti-Kickback Statute. Continue Reading OIG Rescinds Favorable Advisory Opinion for Patient Assistance Charity, Caring Voice Coalition

Recent press reports are speculating that CVS Health Corporation is seeking to acquire the health insurer Aetna.  The rumored transaction would create a new type of health care company that doesn’t currently exist:  one that combines a commercial health insurer with a retail pharmacy chain and a pharmacy benefit manager (PBM).  According to most reports, CVS would pay $66 – $70 billion to acquire Aetna (with Aetna stockholders receiving cash and CVS stock).  It’s said that the parties are trying to enter into a definitive agreement by year-end.     Continue Reading CVS Health – Aetna Transaction: Understanding the Business and Legal Issues

749231-F-DHB23-060The 2017 National Defense Authorization Act, Pub. L. No. 114-328 (Dec. 23, 2016), introduces major changes to the Defense Department healthcare program known as TRICARE. By this time next year, we’ll see a new program to contain the cost of prescription drugs at retail pharmacies, contractual incentives for improving the quality of healthcare and reducing “per-capita cost,” and the first major step toward privatizing the delivery of healthcare to military members.

Read more.

pills-colorful492864587This is the third article in our series on the effect of a “slow repeal” of the ACA. This week’s discussion focuses on the potential impact of a slow repeal of the ACA on the pharmaceutical industry (Pharma).

Unlike many of the players detailed in our prior articles on the slow repeal of the ACA, Pharma has not made a lot of noise regarding a repeal of the ACA. In fact, Pharma and biotech stocks soared—generally 3 percent to 10 percent—on November 8, 2016, largely because the industry had been preparing for a Clinton victory. A recent quote attributed to one Pharma industry official—“I actually think the Republican Party is a far less certain bet for the pharmaceutical industry”—reflects some of the unease surrounding the change in administration, and the likely repeal of the ACA. Continue Reading Slow Repeal of the ACA and Its Effect on the Pharmaceutical Industry

Phone_000011163163SmallA California federal court handed down a decision last Friday that may further influence how healthcare entities should approach the Telephone Consumer Protection Act’s (TCPA) “emergency purpose” exception as applied to calls or texts related to patient health and safety. In St. Clair v. CVS Pharmacy, Inc., No. 16-CV-04911-VC, 2016 WL 7489047, at *1 (N.D. Cal. Dec. 30, 2016), the plaintiff alleged that CVS Pharmacy called him multiple times about his prescriptions after he told a customer representative that he no longer wished to be called. CVS moved to dismiss the lawsuit by claiming that all of the calls at issues fell under the emergency purpose exception contained in the statute, and therefore were not subject to the TCPA. Continue Reading St. Clair v. CVS Pharmacy, Inc. and healthcare calls under the TCPA’s emergency purpose exception