On September 25, 2020, CMS released Medicaid Drug Dispensing Program (MDRP) No. 187 for state Medicaid programs. The publication discusses the implications of the FDA`s Final Rule implementing sections 804(b) through (h) of the Federal Food, Drug and Cosmetic Act (FFDCA) to permit the importation of certain “eligible prescription drugs” shipped from Canada to the United States for MDRP coverage and reimbursement. Drugs that pay extra are often indicated for rare or serious diseases. However, the different requirements and lack of transparency in health technology assessments (HTAs) for these products vary from country to country, which can lead to delays in reimbursement and patient access to new medicines (Akehurst, 2017). In the case of therapies treated in hospitals, the variability may be even greater. Lawmakers, regulators and law enforcement agencies continue to focus on drug prices and government price reporting, creating new challenges for pharmaceutical and biologics companies. Ropes & Gray`s multidisciplinary drug pricing team has the knowledge and resources to help clients successfully resolve rapidly evolving legal and business issues related to drug pricing and price reporting. With drug prices in the crosshairs of executive and legislative action at the federal and state levels, the stakes for pharmaceutical and biologics companies have never been higher. Ropes & Gray`s drug pricing team draws on deep knowledge of all areas of drug price regulation and provides life sciences companies with strategic business and legal advice on existing and proposed government approaches to pricing and price reporting. Our team provides in-depth advice on, among other things, pricing issues related to the Medicaid Drug Rebate Act, Section 340B of the Public Health Services Act, Medicare Average Selling Price Reports, and the ever-expanding range of government drug pricing initiatives. We advise on commercial market strategies to promote robust access and appropriate reimbursement of pharmaceuticals, including value-based contracts. In addition to the hospital reimbursement system, there is the 340b ambulatory drug rebate program, which allows hospitals to access discounted drugs for low-income patients.
This program has been criticized for providing hospitals with unreasonable financial margins without a mandate to pass on savings to patients (U.S. Government Accountability Office, 2011). Therefore, it may help hospitals adjust to disproportionately low Medicaid payments, but it doesn`t help support manufacturers` adoption of innovation in this environment. House Oversight Committee Releases Report on AbbVie`s Drug Pricing Practices May 26, 2021 July 31, 2020, D.C. Circuit overturned a lower court decision prohibiting the Centers for Medicare and Medicaid Services (“CMS”) from reducing Medicare Part B drug payments to hospitals that purchase drugs under the 340B drug dispensing program. The decision comes after a two-year legal battle initiated by hospitals following the adoption of a CMS final rule in November 2017 that reduced reimbursement to most hospitals for certain drugs by $340 billion purchased under Medicare`s prospective ambulatory payment system (“OPPS”) from average retail price (“ASP”) plus 6% to ASP minus 22.5% as of Jan. 1, 2018. A federal district court ruled in December 2018 that reducing CMS`s reimbursement was illegal, but did not overturn the rule. Instead, the court ordered CMS`s prospective implementation of the reduction until the decision was expedited. This is the fourth time that Nicolas has contributed exclusively to the Chinese chapter on the price and reimbursement of medicines. The China chapter covers key topics such as market launch and overview, drug pricing and reimbursement, pricing and reimbursement policy issues, emerging trends, and successful market access.
Medicaid reimbursement for hospital treatment varies from state to state, with some states using a pooled DRG system known as All Patient Refined – Diagnosis Related Groupings (APR-DRG) and others relying on a daily or fee-based model (Henry J Kaiser Family Foundation, 2012). As of November 2018, 37 states relied on DRGs, eight set per diem rates, and one state used a combination of both methods for hospital inpatient services. The other five states use a different approach, such as a per-stay payment or cost-based reimbursement (MACPAC, 2018). This video is the third in a series of four that will explain the legal framework of the health care system and the regulation of drugs and their prices in Canada at the federal and provincial levels. The series is based on Global Legal Insights` publication “Pricing & Refund 2020-Canada”. The fourth video in the series will be released next week. The risk of congressional investigations is an important consideration for biopharmaceutical manufacturers, especially as Republicans and Democrats focus on drug pricing issues. In addition, given recent polls suggesting that Democrats may be able to regain a majority in the House of Representatives after November`s midterm elections, manufacturers should anticipate the possibility of additional and rigorous scrutiny by congressional investigators if that were the case. Notably, Congresswoman Schakowsky is expected to become the top Democrat on the House Energy and Commerce Committee`s health subcommittee if control of the House passes to the Democrats.
Do not hesitate to contact us for more information on this chapter or if you need help with the refund. Pharmaceutical Research and Manufacturers of America (PhRMA) and three groups representing doctors and patients have filed a lawsuit against the Trump administration`s protest linking Medicare physician reimbursement to foreign drug prices. As noted above, the Committee sent requests for information on trademarks and generics to twelve pharmaceutical manufacturers. Eight companies received inquiries about one drug; three companies received inquiries about two drugs; and two companies received inquiries about three drugs. The committee did not make the content of the applications public, but Cummings said the committee was seeking information on research investments, price increases and “companies` strategies to maintain market share and pricing power.” President Cummings, in particular, focused on the price of insulin products. Thus, commercial reimbursement methods can provide a payment option that helps offset losses for the same drugs used for other patients whose DRG-based reimbursement shifts the risk of drug costs to the hospital. The net impact of these two very different payment systems regularly leads to “cost shifting” phenomena within hospitals, where the income of some commercially insured patients helps balance a hospital`s accounts for capped reimbursement under DRG schemes, both public and private. The proposals include a number of policy changes that HHS is expected to pursue in the near future. These policy changes can be divided into four broad areas that HHS has identified as part of its overall strategy to address drug prices.
Drugs that no longer meet the criteria and therefore do not result in consistently incorrect reimbursement of health care providers are considered to be removed from the list of high costs (Ministry of Health and Social Welfare, 2012). Please do not hesitate to contact Nicolas Zhu (nicolas.zhu@cmslegal.cn) if you have any questions regarding this publication or if you need advice on life sciences issues in the PRC. But are inpatient reimbursement systems designed to cover these costs? Since many hospital environments are reimbursed through bundled payment methods, innovative companies that sell to hospitals face a completely different set of challenges than prescription drugs – particularly predetermined fixed payments for hospitalizations and, in some international markets, limited annual budgets that limit overall spending on these products. Hull Associates is pleased to contribute to the 2020 edition of Global Legal Insights – Pricing & Refund, with a full chapter on hospital reimbursement of specialty drugs in the United States and Europe.
