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RX- Biden-Harris Administration Announces Proposal to Advance Prescription Drug Transparency in Medicaid

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: In which CMS will dive deeper on exactly how RX manus set prices. Or will try to, anyway.


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New HHS proposal would shed light on cost of prescription drugs and save states and federal government money in Medicaid

The Biden-Harris Administration has made lowering prescription drug costs in America a key priority — and President Biden is continuing to deliver results. Today, the U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS), is proposing steps to further drive down prescription drug costs in Medicaid and build on President Biden’s executive order to lower prescription drug costs for Americans. CMS’ latest notice of proposed rulemaking (NPRM) would shed light on the actual cost of drugs covered by Medicaid. Under this proposal, Medicaid would have increased ability to hold drug manufacturers accountable for what Medicaid programs pay for drugs.

“President Biden is not only committed to protecting Medicaid, but continues to take bold actions to strengthen the program,” said HHS Secretary Xavier Becerra. “With today’s proposed rule, we are advancing unprecedented efforts to increase transparency in prescription drug costs, being good stewards of the Medicaid program, and protecting its financial integrity. This proposed rule will save both states and the federal government money.”

“This proposed rule prioritizes CMS’ role as a good steward of Medicaid dollars while also strengthening program integrity and the management of pharmacy benefits for people with Medicaid coverage,” said CMS Administrator Chiquita Brooks-LaSure. “We’re committed to preserving access to life-saving treatments and securing fiscal sustainability for the Medicaid program, which remains a lifeline for millions of people.”

Today’s proposed rule to improve the Medicaid Drug Rebate Program follows the Biden-Harris Administration’s historic creation of the Medicare Prescription Drug Inflation Rebate Program. As part of President Biden’s new prescription drug law, for the first time ever, drug companies must now pay rebates to Medicare when their prescription drug prices increase faster than the rate of inflation for certain drugs dispensed to people with Medicare.

Increase Transparency of Prescription Drug Costs

This rule would allow CMS to have more insight into what the most expensive drugs on the market today actually cost to manufacture and distribute. The proposed regulation would give CMS and states additional tools, like a drug price verification survey, which would result in greater transparency into manufacturers’ drug prices. This survey would verify drug prices to increase transparency about why certain drug prices are expensive for Medicaid and help states better negotiate what the Medicaid program pays for high-cost drugs. With this information, state Medicaid agencies would be able to operate their pharmacy programs more effectively while helping more people get vital drug treatments. This increased transparency under Medicaid would advance the Biden-Harris Administration’s efforts to complement the Inflation Reduction Act and further drive down prescription drug costs without impacting coverage of drugs for Medicaid beneficiaries. For additional information on the drug price verification survey, visit

Increase Transparency of Managed Care Plans

Another proposed provision aims to enhance transparency into the costs of administering drug benefits in Medicaid-managed care plans. Managed care plans cover more than 75% of Medicaid beneficiaries. Managed care plan pharmacy benefit managers (PBMs) often negotiate and administer the pharmacy benefit, though there has been a lack of transparency into the amount plans have paid to PBMs for administering the drug benefit and the amount pharmacies have been paid for the drugs. This lack of transparency has raised concerns about PBMs using spread pricing arrangements to increase their profit margins by charging an MCO more for a drug than the amount a PBM pays a pharmacy. To address this issue, CMS is proposing that contracts between states, Medicaid-managed care plans, and third-party contractors, such as PBMs, reflect transparent reporting of drug payment information among third-party contractors. This proposal will help ensure that taxpayer dollars are actually going to pay for drugs and not increased profits.

Increased Transparency in Drug Classifications

The NPRM also focuses on the potential misclassification of drugs as brand name or generic. The proposed rule includes provisions to ensure states would receive the appropriate rebates to which they are entitled, since states receive a higher percentage of rebate dollars for brand-name drugs compared to generics. With increased transparency, states would be able to determine if manufacturers appropriately classified their covered outpatient drugs, and if they did not, give CMS the ability to take action to correct the misclassification.

For additional information on these and other provisions in the NPRM, please visit Federal Register. CMS looks forward to accepting public comment on the NPRM through July 25, 2023.

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RX- Lilly ordered to pay millions more in False Claims Act case


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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Lilly appealed and the bill keeps going up.


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When a federal jury last year ordered Eli Lilly to pay $61 million for skimping out on Medicaid rebates, the company vowed to fight the verdict. But instead of the result Lilly wanted, the award has been tripled to more than $183 million.

On Tuesday, Illinois federal judge Harry Leinenweber ruled that Eli Lilly owes triple damages from last year’s award after whistleblower Ronald Streck convinced a jury that the company violated the False Claims Act and short-changed Medicaid on rebate payments.

Since the case falls under the False Claims Act, the award was eligible for “trebled” damages, according to court filings.

The case dates to 2014, when whistleblower Streck—a pharmacist and lawyer—sued Eli Lilly for allegedly launching retroactive price increases and failing to pay Medicaid rebates based on the higher prices.

Streck and his attorneys moved forward with litigation in 2018 after the U.S. government declined to intervene in the case, Streck’s law firm said last year.

In the order Tuesday, Leneinweber pointed out that Lilly “changed its practices years before the trial.” In court, Lilly argued its corrective actions weighed in favor of “minimal, if any, penalties,” according to the document.

Still, Leneinweber decided that the company indeed owes $183.69 million under the “trebled” damages rules in the False Claims Act. The judge ultimately noted that “while Lilly could have, of course, behaved better, it could have acted far worse.”

Lilly, for its part, said it’s “committed to upholding high standards of corporate conduct in our business dealings.” The company is “disappointed” with the outcome, but it plans to appeal and is “confident that the Seventh Circuit will reverse,” a spokesperson said over email.

Streck also filed a False Claims Act whistleblower suits against Bristol Myers Squibb and other companies in 2013 but later withdrew his claims against the other defendants. BMS ultimately settled for $75 million in 2021 while Astellas Pharma’s U.S. unit resolved its case for $18 million that same year.

Editor’s note: This story has been updated with comments from Eli Lilly. 

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REFORM- Prescription for housing? California wants Medicaid to cover 6 months of rent


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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: CA is looking to spend $20k a year per person on rent for homeless folk for six months, despite poor results in the Cal-AIM pilot. The ole’ “it didn’t work because we didn’t do enough of it” explanation. Even if you thought the pilots were a success, there’s still one problem: you gotta build more housing. Cue the real estate guys…



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Gov. Gavin Newsom, whose administration is struggling to contain a worsening homelessness crisis despite record spending, is trying something bold: tapping federal health care funding to cover rent for homeless people and those at risk of losing their housing.

States are barred from using federal Medicaid dollars to pay directly for rent, but California’s governor is asking the administration of President Joe Biden, a fellow Democrat, to authorize a new program called “transitional rent,” which would provide up to six months of rent or temporary housing for low-income enrollees who rely on the state’s health care safety net — a new initiative in his arsenal of programs to fight and prevent homelessness.

“I’ve been talking to the president. We cannot do this alone,” Newsom told KHN.

The governor is pushing California’s version of Medicaid, called Medi-Cal, to fund experimental housing subsidies for homeless people, betting that it’s cheaper for taxpayers to cover rent than to allow people to fall into crisis or costly institutional care in hospitals, nursing homes, and jails. Early in his tenure, Newsom proclaimed that “doctors should be able to write prescriptions for housing the same way they do for insulin or antibiotics.”

But it’s a risky endeavor in a high-cost state where median rent is nearly $3,000 a month, and even higher in coastal regions, where most of California’s homeless people reside. Experts expect the Biden administration to scrutinize the plan to use health care money to pay rent; and also question its potential effectiveness in light of the state’s housing crisis.

“Part of the question is whether this is really Medicaid’s job,” said Vikki Wachino, who served as national Medicaid director in the Obama administration. “But there is a recognition that social factors like inadequate housing are driving health outcomes, and I think the federal government is open to developing approaches to try and address that.”

Bruce Alexander, a spokesperson for the Centers for Medicare & Medicaid Services, declined to say whether the federal government would approve California’s request. Yet, Biden’s Medicaid officials have approved similar experimental programs in Oregon and Arizona, and California is modeling its program after them.

California is home to an estimated 30% of the homeless people in the U.S., despite representing just 12% of the country’s overall population. And Newsom has acknowledged that the numbers are likely far greater than official homeless tallies show. Top health officials say that, to contain soaring safety-net spending and help homeless people get healthy, Medi-Cal has no choice but to combine social services with housing.

Statewide, 5% of Medi-Cal patients account for a staggering 44% of the program’s spending, according to state data. And many of the costliest patients lack stable housing: Nearly half of patients experiencing homelessness visited the emergency room four times or more in 2019 and were more likely than other low-income adults to be admitted to the hospital, and a large majority of visits were covered by Medi-Cal, according to the Public Policy Institute of California.

“What we have today doesn’t work,” said Dr. Mark Ghaly, secretary of the California Health and Human Services Agency, explaining his argument that housing is a critical component of health care. “Why do we have to wait so long for people to be so sick?”

The federal government has already approved a massive social experiment in California, known as CalAIM, which is transforming Medi-Cal. Over five years, the initiative is expected to pour $12 billion into new Medi-Cal services delivered outside of traditional health care. In communities across the state, it is already funding services for some low-income patients, including paying rental security deposits for homeless people and those facing eviction; delivering prepared healthy meals for people with diabetes; and helping formerly incarcerated people find jobs.

The transitional rent program would add another service to those already available, though only a sliver of the 15.4 million Medi-Cal enrollees actually receive those new and expensive social services.

Rent payments could begin as soon as 2025 and cost roughly $117 million per year once fully implemented. And while state officials say anyone who is homeless or at risk of becoming homeless would be eligible, not everyone who qualifies will receive new services due to capacity limits. Among those who stand to benefit are nearly 11,000 people already enrolled in Medi-Cal housing services.

The ongoing conversation is how do we convince the federal government that housing is a health care issue,” said Mari Cantwell, who served as Medi-Cal director from 2015 to 2020. “You have to convince them that you’re going to save money because you’re not going to have as many people showing up at the emergency room and in long-term hospitalizations.”

Health care experiments in California and around the country that funded housing supports have demonstrated early success in reducing costs and making people healthier. But while some programs paid for housing security deposits or participants’ first month of rent, none directly covered rent for an extended period.

“Without that foundational support, we are playing in the margins,” Newsom said.

State health officials argue that paying for six months of rent will be even more successful at reducing health care costs and improving enrollees’ health, but experts say that, to work, the initiative must have strict accountability and be bundled with an array of social services.

In a precursor to the state’s current initiative, California experimented with a mix of housing assistance programs and social services through its “Whole Person Care” pilot program. Nadereh Pourat, of the UCLA Center for Health Policy Research, evaluated the program for the state concluding that local trials reduced emergency visits and hospitalizations, saving an average of $383 per Medi-Cal beneficiary per year — a meager amount compared with the program’s cost.

Over five years, the state spent $3.6 billion serving about 250,000 patients enrolled in local experiments, Pourat said.

And a randomized control trial in Santa Clara County that provided supportive housing for homeless people showed reductions in psychiatric emergency room visits and improvements in care. “Lives stabilized and we saw a huge uptick in substance use care and mental health care, the things that everybody wants people to use to get healthier,” said Dr. Margot Kushel, director of the University of California-San Francisco’s Center for Vulnerable Populations at Zuckerberg San Francisco General Hospital and Trauma Center, who worked on the study.

But insurers implementing the broader Medi-Cal initiative say they are skeptical that spending health care money on housing will save the system money. And health care experts say that, while six months of rent can be a bridge while people wait for permanent housing, there’s a bigger obstacle: California’s affordable housing shortage.

“We can design incredible Medicaid policies to alleviate homelessness and pay for all the necessary supportive services, but without the adequate housing, frankly, it’s not going to work,” Kushel said.

Newsom acknowledges that criticism. “The crisis of homelessness will never be solved without first solving the crisis of housing,” he said last week, arguing California should plow more money into housing for homeless people with severe mental health conditions or addiction disorders.

He will ask the legislature to put before voters a 2024 ballot initiative that would infuse California’s mental health system with at least 6,000 new treatment beds and supportive housing units for people struggling with mental health and addiction disorders, many of whom are homeless. The proposed bond measure would generate from $3 billion to $5 billion for psychiatric housing and treatment villages aimed at serving more than 10,000 additional people a year. The initiative also would ask voters to set aside at least $1 billion a year for supportive housing from an existing tax on California millionaires that funds local mental health programs.

“People who are struggling with these issues, especially those who are on the streets or in other vulnerable conditions, will have more resources to get the help they need,” Newsom said.

For transitional rent, six months of payments would be available for select high-need residents enrolled in Medi-Cal, particularly those who are homeless or at risk of becoming homeless — and those transitioning from more costly institutions such as mental health crisis centers, jails and prisons, and foster care. Medi-Cal patients at risk of inpatient hospitalization or who frequent the emergency room would also be eligible.

“It’s a pretty big challenge; I’m not going to lie,” said Jacey Cooper, the Medi-Cal director. “But we know that people experiencing homelessness cycle in and out of emergency rooms, so we have a real role to play in both preventing and ending homelessness.”

Public health experts say the problem will continue to explode without creative thinking about how to fund housing in health care, but they warn the state must be wary of potential abuses of the program.

“It has to be designed carefully because, unfortunately, there are always people looking to game the system,” said Dr. Tony Iton, a public health expert who is now a senior vice president at the California Endowment. “Decisions must be made by clinicians — not housing organizations just looking for another source of revenue.”

For Stephen Morton, who lives in the Orange County community of Laguna Woods, the journey from homelessness into permanent housing illustrates the amount of public spending it can take for the effort to pay off.

Morton, 60, bounced between shelters and his car for nearly two years and racked up extraordinary Medi-Cal costs due to prolonged hospitalizations and repeated emergency room trips to treat chronic heart disease, asthma, and diabetes.

Medi-Cal covered Morton’s open-heart surgery and hospital stays, which lasted weeks. He landed temporary housing through a state-sponsored program called Project Roomkey before getting permanent housing through a federal low-income housing voucher — an ongoing benefit that covers all but $50 of his rent.

Since getting his apartment, Morton said, he’s been able to stop taking one diabetes medication and lose weight. He attributes improvements in his blood sugar levels to his housing and the healthy, home-delivered meals he receives via Medi-Cal.

“It’s usually scrambled eggs for breakfast and the fish menu for dinner. I’m shocked it’s so good,” Morton said. “Now I have a microwave and I’m indoors. I’m so grateful and so much healthier.”

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.



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RX- Medicaid, with planned payment pilot, girds for influx of pricey gene therapies

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Pharma guys are totally on board with the CMS plan to “centralize” the way payment happes for these new drugs, so we should feel good about this not turning into another MDRP-style total spending game/cluster.



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The proposed model could help state Medicaid agencies explore outcomes-based payment schemes, but may come too late for a looming test.


The Centers for Medicare and Medicaid Services is planning a payment model around cell and gene therapies that would centralize use of outcomes-based agreements. Getty / Edited by BioPharma Dive

People with the blood disorder sickle cell are anticipating the arrival of two gene therapies that could dramatically reshape their disease, potentially offering something approaching a cure.

Insurers, too, are preparing for the treatments, which are expected to carry price tags in the seven figures. While five other expensive gene therapies are already available in the U.S., sickle cell is far more prevalent than the inherited diseases they treat, affecting an estimated 100,000 people in the country. Many are covered through Medicaid, the federal insurance plan for people with limited income.

An experimental model proposed by the Centers for Medicare and Medicaid Services last week could help state agencies better afford those medicines, as well as offer a testing ground for payment schemes that could apply to other pricey gene therapies. Yet the timeline for its implementation might mean it comes after the first sickle cell gene therapies reach market.

“Sickle cell is a call to action,” said Michael Sherman, chief medical officer of Point32 Health, the parent company of Harvard Pilgrim Health Care and Tufts Health Plan.

“Without these kinds of models, we’re going to see access issues,” he added. “The Medicaid state agencies, like other parts of the financing system, were never designed with this sort of upfront shock.”

The gene therapy model is one of three pilot programs CMS will test in the coming years in response to an executive order from President Joe Biden directing the agency to find further ways to lower prescription drug costs. Administration officials described these programs as building on last year’s Inflation Reduction Act, which gave Medicare the authority to negotiate prices for a limited number of drugs.

Under the gene therapy model, state Medicaid agencies could delegate authority to CMS to coordinate multistate frameworks to pay for gene therapies based on how much patients benefit from treatment. In sickle cell, for example, payment could be contingent on whether patients remain free of the pain crises they regularly experience.

These types of payment schemes, typically known as outcomes-based arrangements, are already used in some cases for the currently available gene therapies. But budget limitations and federal price reporting requirements have limited their use within Medicaid, indirectly shaping how they’re designed for private insurers, too.

edcines cleared by the FDA’s main review office since 2015 have been cancer drugs, a tally that reflects the advent of cancer immunotherapy as well as continued progress in matching treatment to genetics.

“There’s a lot of benefit, I think, to having both more of a centralized purchaser or negotiator across Medicaid programs … and having more centralized data collection,” said Stacie Dusetzina, a professor of health policy at Vanderbilt University Medical Center. “I think it also gives CMS a little bit of an upper hand at the negotiating table.”

Jeff Marrazzo, the former CEO of gene therapy developer Spark Therapeutics, agrees that a centralized approach in Medicaid could help.

“What I’ve observed is that state Medicaid agencies … generally have experienced more challenges with providing access to cell and gene therapies,” he wrote in an email. “This is due in part to the cost density of cell and gene therapies, but also because these organizations lack the infrastructure required to implement alternative pricing, reimbursement, and access models.”

Marrazzo cited data collection as one example, noting that some state agencies might lack the ability to appropriately track clinical outcomes for patients treated with a gene therapy.

CMS envisions testing several different types of outcomes-based arrangements, including an annuity model where continued payment is based on continued benefit. (To date, gene therapy developers have favored a rebate-based approach, where a certain percentage of their treatment’s cost is returned to the insurer if a specific outcome is not achieved.)

Five years ago, Spark proposed a similar annuity-based idea to help insurers pay for its then newly approved gene therapy Luxturna, for a type of childhood blindness. Spark priced the treatment at $425,000 per eye and sought to offer an installment payment plan, proposing the CMS run a demonstration project around Luxturna.

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Its ability to do so was limited by Medicaid rules requiring drugmakers give the program the “best price” they offer on their products. In the event a patient didn’t benefit from treatment, and an insurer therefore didn’t owe the remaining installment payments, Spark would have had to report that fractional cost as its best price.

CMS recently tweaked its policy, allowing drugmakers to report multiple “best prices” in the context of outcomes-based arrangements. “This was an important first step,” Marrazzo wrote. “Along with the [recent] policy change, I do believe CMS providing a more centralized approach could lead to more annuity models being taken up, particularly by Medicaid plans.”

The agency plans to focus the model on a specific disease, and indicated sickle cell as a likely candidate. Behind the advancing sickle cell treatments is a growing pipeline of other gene therapies in development.

“Our concern has been that, for some of these more rare diseases, we haven’t seen the access that we would like to see. Sickle cell is one of them,” said CMS Administrator Chiquita Brooks-LaSure on a call with reporters last week. “One of the reasons we’re so excited about this model is because we think states need some assistance from us to really be effective in the space.”

But CMS doesn’t envision launching the gene therapy model until 2026 at the earliest, years after the two gene therapies now nearing market are expected to be approved. Their developers — Bluebird bio and partners Vertex Pharmaceuticals and CRISPR Therapeutics — are currently preparing approval applications that they expect to finish filing with the FDA this quarter.

The latest developments in oncology research

More than one quarter of the medcines cleared by the FDA’s main review office since 2015 have been cancer drugs, a tally that reflects the advent of cancer immunotherapy as well as continued progress in matching treatment to genetics.

Under current timelines, CMS would begin developing the model this year and announce model specifications in 2024 and 2025, with implementation following the year after. The agency would then track metrics like gene therapy spending, use and change in access over time to evaluate its success.

To some, earlier would be better. “Being in a business, I don’t understand why it takes two years to announce model specifications,” Sherman said.

The planned model is also voluntary, so CMS would need to rely on participation from both state Medicaid agencies and from drugmakers. The latter group, CMS argued in its report, would be enticed by the prospect of simpler market access.

That access could come with some tradeoffs, however. “It may be a little bit less attractive because of the inability to command the highest possible price, especially if there is a large population that’s going to be treated and many Medicaid programs are interested in joining together into this kind of one model,” Dusetzina said.

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RX- U.S. proposes Medicare, Medicaid programs to cut drug costs, including $2 generics

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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: CMS has some bright ideas on managing Medicaid rx spending, including CMS taking over the way states pay for cell/gene therapies, and creating a mandatory model for how states pay for drugs fast-tracked by the FDA. No where on earth could those ideas have come from?



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WASHINGTON, Feb 14 (Reuters) – The U.S. health department proposed on Tuesday three new pilot projects aimed at lowering prescription drug prices for people enrolled in government health insurance plans, including offering some essential generic drugs for $2 a month.

The Centers for Medicare and Medicaid (CMS) said it would test the models in the Medicare health program for people age 65 or over and the disabled and the Medicaid program for the poor.

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The proposed models would lower the out-of-pocket cost of commonly used generic drugs for chronic conditions, such as hypertension, to $2 a month for people on Medicare, improve access to expensive lifesaving cell and genetic treatments for those on Medicaid, and get CMS better deals for expensive new therapies that lack complete clinical trial data, CMS said.


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The first model sees CMS encouraging Medicare Part D plans, which cover most prescription drugs, to offer a monthly $2 fixed co-payment for a standard list of around 150 generic drugs targeting conditions common among Medicare beneficiaries, such as hyperlipidemia and hypertension. It is voluntary.

The second voluntary model allows state Medicaid agencies to pay for cell and gene therapies by delegating authority to CMS so it can facilitate contracts and payment models as well as structure and coordinate multi-state arrangements with manufacturers.

The agency also said it would work on developing a mandatory model for payment methods for drugs approved by the U.S. Food and Drug Administration (FDA) under its Accelerated Approval Program (APP).

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CMS has raised concerns about covering drugs under the pathway such as those for Alzheimer’s disease because it does not require the same degree of drug efficacy data as the FDA’s regular approval process.

The model would address the high cost and lack of confirmed effectiveness of drugs that receive accelerated approval through providing drugmakers with incentives to speed up the completion of confirmatory clinical trials, CMS said, and would be developed in consultation with the FDA.

CMS will announce the first model’s start date “as soon as operationally feasible”, it said. Development on the Medicaid gene and cell therapy model will start in 2023 and launch for testing in 2026. The agency will start working with the FDA on the accelerated approval model in 2023 but has no planned launched date yet.


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Reporting by Ahmed Aboulenein; Editing by Caroline Humer and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

Ahmed Aboulenein

Thomson Reuters

Washington-based correspondent covering U.S. healthcare and pharmaceutical policy with a focus on the Department of Health and Human Services and the agencies it oversees such as the Food and Drug Administration, previously based in Iraq and Egypt.

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RX- Medicaid Net Drug Spend HIts Double-Digits for the First Time, Says Magellan Rx Report

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Specialty drugs continue to drive Medicaid drug spending, and its getting faster, with 2021 being the first year an increase this size has been seen in overall Medicaid Rx spending.




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Spending on specialty drugs fueled a 11% increase in Medicaid drug spending from 2020 to 2021, says Magellan’s seventh annual Medicaid Pharmacy Trend Report.

Net Medicaid drug costs increased by 11% from 2020 to 2021, according to Magellan Rx Management’s Medicaid Pharmacy Trend Report, which was published earlier today. It is the first time during the seven-year history of Magellan’s report on Medicaid drug expenditures trend that the increase has been in the double digits, according to the report.

As is true for drug spending for almost all payers, specialty drugs — expensive drugs for rare disease — are accounting for a growing share of Medicaid drug spending and the year-to-year increases in spending, or “trend,” according to the Magellan.

Source: Magellan Rx Management Medicaid Pharmacy Trend Report, 7th edition

The report says the specialty net trend rose 2.1 percentage points from 10.9% in 2020 to 13% in 2021 while the traditional net trend rose 4.1 percentage points from 1.9% to 5.8%. In 2021, specialty drugs accounted for small fraction of drug claims — just 1.3% — but for the majority — 53.8% — of the net drug costs, according to the Magellan report. That is a 2.3 percentage point increase from 2020 when specialty drugs accounted for 51.5% of total net drug costs.

Net costs are often used analysis and calculations of Medicaid drug costs because the difference between the gross and net spending is so large. Medicaid programs receive in a mandatory 23.1% rebate from manufacturers and additional rebates for many drugs on top of that mandatory rebate. According to the Magellan’s numbers, the net cost per claim in 2021 was $58.55, or just 41% of the gross cost per claim of $142.18.

Magellan’s report is not based on drug prices and spending for all Medicaid programs. Rather, the report is based on data for the company’s fee-for-service pharmacy programs in 24 states and the District of Columbia. The report says the data set used to prepare this report included 95 million claims with a gross cost of $13.6 billion and a net cost of $5.6 billion.

Late last year, Prime Therapeutic finalized the $1.35 billion acquisition of Magellan Rx, the pharmacy division of Magellan Health, from Centene Corporation.

The report identifies the specialty drugs most responsible for the increase in spending on specialty drugs. Topping the list are Hemlibra (emicizumab), a treatment for hemophilia A treatment; Trikafta (elexacaftor, tezacaftor, and ivacaftor), a treatment for cystic fibrosis; Evrysdi (risdiplam), a treatment for spinal muscular atrophy; Biktarvy (bictegravir, emtricitabine, tenofovir alafenamide, an HIV treatment; and Stelara (ustekinumab), a treatment for plaque psoriasis, Crohn’s disease and ulcerative colitis.

The report also ranks 50 drug classes by their share of the net spend in 2021. Drugs for HIV/AIDs ranked the highest, accounting for 10% of the net Medicaid spend in 2021. They were followed by antipsychotics (8.4%), hemophilia treatment (7.2%), anticonvulsants (6.3%), oral cystic fibrosis drugs (5.6%) and cytokine and CAM (cell adhesion molecule) antagonists (4.3%), a group that includes Stelara and Humira (adalimumab).

Source: Magellan Rx Management Medicaid Pharmacy Trend Report, 7th edition

Drugs for spinal muscular atrophy, a group of inherited diseases that damage and destroy motor neurons, was further down on the list, ranking 13th and accounting for 1.5% of the net spend. But the report says that claim volume increased by 425% as prescriptions for Evrysdi increased and the market share of Spinraza (nusinersen), delivered via an intrathecal injection, shrank.

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RX- Medicaid Spending on Antiretrovirals Increased Between 2007 and 2019

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[MM Curator Summary]: Medicaid spent $25B on HIV drugs over a 12 year period, and the researchers try to figure out what drove increases.


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Medicaid spending on antiretroviral therapies (ARTs) used to treat human immunodeficiency virus (HIV) increased by 178% between 2007 and 2019, according to study findings published in Clinical Infectious Diseases.

Researchers at Brigham and Women’s Hospital and Harvard Medical School in Boston, Massachusetts, sought to estimate Medicaid spending on ARTs to treat HIV between 2007 and 2019. They obtained publicly available data on Medicaid State Drug Utilization, and approximated Medicaid’s net spending based on average prices and Medicaid rebates for 48 available ARTs. The base Medicaid rebate ranged from 15% to 23% plus any added rebates if the medication’s price increased faster than inflation.

According to the researchers’ estimates, Medicaid spent around $25 billion for 17 million 30-day supplies of the 48 available ARTs between 2007 and 2019.

When comparing 2007 spending to 2019 spending, Medicaid’s annual net spending increased by 178% from $1.1 billion to $3.0 billion, while the average net price of ARTs increased 28% from $1432 to $1830 for every 30-day supply. Annual use of ARTs increased 118% from 700,000 to 1.6 million 30-day supplies during the same period. These increases suggest that newer ART formulations, combinations, and ingredients were more expensive, and that inflationary rebates did not effectively counteract rising costs.

Other factors may also explain the rising spending on ARTs. The population of Medicaid beneficiaries increased, particularly following the passage of the Affordable Care Act, which expanded Medicaid eligibility in 2012. Treatment advancements and improved efficacies also extended the lifespan of individuals living with HIV.

[T]he US government should be authorized to assure that launch prices for new drugs covered by Medicaid are aligned with the added benefit they offer over existing therapies.

In 2007, the most commonly used ARTs included TVD, EFV/FTC/TDF, and LPV/r. In 2019, the most commonly used ARTs consisted of single-tablet regimens, including BIC/F/TAF, E/C/F/TAF , and DOL/ABC/3TC.

Limitations of the study include possible underestimation of actual rebates, use of estimated ART prices and estimated medication usage based on 30-day supplies of medications.

“Medicaid spending on [ARTs] nearly tripled from 2007-2019, due to expanded use of [ARTs] and rising prices,” the study authors conclude. They add, “To prevent sustained high prices due to serial replacement of brand-name drugs with incrementally different products among [ARTs] and other classes of drugs, the US government should be authorized to assure that launch prices for new drugs covered by Medicaid are aligned with the added benefit they offer over existing therapies.”

Disclosures: Some study authors declared affiliations with biotech, pharmaceutical, and/or device companies. Please see the original reference for a full list of authors’ disclosures.

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MH/RX- Mental health declines as Medicaid funds record psychotropic drug use


MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: The author wants to be ticked about expansion but also wants to benefit from the idea that lockdowns caused a surge in MH needs. Besides all that we get some decent data on MH drug trends in Idaho.

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Taxpayer-subsidized government healthcare is not making people healthier. 

New data shows that the use of psychotropic drugs among Medicaid beneficiaries is projected to reach an all-time high for the third consecutive year. With one in every five Medicaid prescriptions in Idaho written for these drugs, there exists a serious problem with mental health throughout the Gem State.

Psychotropic drugs are generally used to treat mental health conditions like anxiety, depression and mood disorders. In 2016, there were just under 400,000 claims for such medications. Since then, the use of these drugs has increased significantly, with claims growing 86% as of 2021.  Estimates for 2022 say that Idaho Medicaid will spend $91 million to cover just short of one million claims for psychotropics by the end of the year.

Figure 1

Medicaid expansion and the COVID-19 pandemic both started in early 2020, as did the steep increase in psychotropic use. In the previous decade, spending on psychotropic medications declined by 5% per year and the number of prescriptions declined by 1% per year, when adjusted for inflation and Medicaid enrollment. Since 2020, however, this decline suddenly became a sharp annualized increase of 6% in prescriptions and 15% in spending (see Figure 2). 

Figure 2

Medicaid expansion added to the number of people who could receive benefits. But that change alone does not explain the rapid increase in prescriptions and prescription expenses. Demographic changes played a key role.

The effects of the pandemic – exacerbated by harsh government policies, including Gov. Brad Little’s statewide lockdowns – created a surge of Idahoans applying for Medicaid. For adults under 40 and those in their 60s, lockdown policies created isolation, unemployment, and economic hardship, all of which harmed their mental health significantly more than was the case for all other age groups. This likely generated a demographic shift necessary, among both existing and new Medicaid enrollees, that accounts for the sudden rise in psychotropic drug use. Despite the state’s relatively quick economic recovery touted by the governor, these concerning trends remain and are worsening.

There is cause for skepticism about the efficacy of prescribing psychotropic drugs to treat mental health conditions. One groundbreaking study asserts that the foundational theory supporting antidepressants – the chemical imbalance theory – is incorrect. Naturally, this research also calls into question whether antidepressants are effective forms of treatment. This theory has also been the basis of hesitancy for doctors and patients to stop antidepressant treatments, leading to lifelong use by people who would otherwise be able to seek better alternatives.

Despite doubts about the efficacy of some psychotropics, like antidepressants, these types of drugs are still commonly overprescribed. A national study notes that three out of every five visits where a new psychotropic drug was prescribed to a patient had no corresponding psychiatric diagnosis. Not only is this practice potentially detrimental to patient health, but the same study links this over-prescription to rising costs within the Medicaid system.

This tendency to overprescribe psychotropic drugs also made it common for patients to be taking more than one of these medications at the same time. Disturbingly, patients on Medicaid are significantly more likely to be taking multiple psychotropic drugs, despite this being an ill-advised practice that could have harmful effects on patients. This is especially concerning for the case in Idaho, as the state ranks among those with the highest incidence of this practice.

What is happening within the Medicaid system is an example of how government control negatively impacts people’s lives. The big government policies that dictated how we weathered the pandemic destroyed the livelihoods of many Idahoans and had long-term negative effects on their health and freedom. 

The entrapment of patients in chronic therapies is a common convention of modern medicine. Guaranteeing that patients continue their treatments without the hurdle of paying for them – as the Medicaid system does so well – is good for business among medical interest groups. Some healthcare professionals are beginning to notice these practices, resulting in the increasing popularity of osteopathic physicians versus their allopathic counterparts – that is, DOs rather than MDs. Scholars are finding that not only are mental health conditions not treated well with medications, but lifestyle plays a greater role in mental health than originally thought, and the medical community is beginning to take note.

Patients should be weary of those claiming to advocate for their well-being, only to call for bigger government and more social programs. Like subsidies and bailouts to support companies that are failing due to their bad business models, Medicaid is subsidizing the use of healthcare treatments and practices that may not be best for patients. However, the consequences of doing so are more severe than traditional business bailouts and the result is a worse healthcare system for everyone.

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Medicaid’s 340B has grown beyond original intent | Mississippi Politics and News


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The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: In which the author explains how hospitals exploit 340B to make a whole lotta cash.



Submitted by former State Senator and Senate President Pro Tem Terry Burton

“The program has been hijacked by large for-profit hospital systems that are using the program to fill their pockets without providing any additional charity care,” former State Senator Burton writes.

I would argue that most politicians have good intentions, but good intentions don’t always make for good policy. Many programs in our country that were created with good intentions have led to a culture that takes advantage of the very people they were designed to help.

One of these good intentioned programs is Medicaid’s 340B drug pricing program which is currently failing at its goals and failing the American people and the people of Mississippi.

The 340B program was established to help reduce the price of healthcare for low-income and uninsured patients. This would be achieved by providing drugs to rural hospitals and community health centers at a reduced cost, which would ideally provide these institutions with the financial freedom to provide charity care. A worthy cause indeed!

However, the program has been hijacked by large for-profit hospital systems that are using the program to fill their pockets without providing any additional charity care. In fact, 340B institutions provide less charity care on average than non-340B entities.

I cannot stomach the fact that these large entities are profiting off the neglect of the poor. Beyond my faith, my values as a conservative American are staunchly opposed to the massive growth of the program. The 340B program has inflated from $6.9 billion in 2012 to $38 billion in 2020 without any noticeable rise in charity care.

Since 1992, the program has grown five times faster than the growth rate of the overall drug market and has become the second largest federal drug program. More than two out of every five hospitals in the United States participate in 340B even though it was intended to be a small program with only 45 hospitals participating in 1992. And why wouldn’t these hospitals want to participate?! A 340B hospital or clinic may claim steep discounts on outpatient medicines dispensed to all patients, whether insured or uninsured.

In 2010, Health Resources and Services Administration’s contract pharmacy guidance allowed all 340B entities to have an unlimited number of contract pharmacy arrangements. This allowed for-profit corporations to expand the 340B program with no clear benefit to patients. Currently, hospitals have created expansive networks of contract pharmacies, where they can obtain the 340B discounts and share in the profits but do not have to share any savings with patients.

To make matters worse, because drug manufacturers have smaller profit margins on 340B drugs, drug prices are rising for everyone due to 340B and the greed of large hospitals. This program simply does not align with my conservative or Christian values I hold dear to my heart.

While 340B was created for good, the program has suffered from poor legislative drafting, overly broad administrative guidance and poor Congressional oversight and has lost its intended focus. I urge our Senators to keep fighting for Mississippians by reforming this failed government initiative.


Submitted by former State Senator and Senate President Pro Tem Terry Burton



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Rx- NYOH calls on NYSDOH to reverse Medicaid policy change

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: A move to mail-order pharmacy for oncology drugs has very few fans.



Save Our Access, Save Our Lives Rally takes place on October 12

ALBANY, N.Y. (NEWS10) — There will be a Save Our Access, Save Our Lives rally on October 12 at 2 p.m. where The New York Oncology Hematology (NYOH) will call on the New York State Department of Health (NYSDOH) and state leaders to reverse a policy that has left Medicaid patients without access to life-saving cancer care medication.

NYOH will be joined by partner organizations, community leaders, and elected officials as they advocate for Medicaid recipients to regain access to life-saving oral cancer care medications through physician dispensaries. The rally is asking for support from legislators and representatives that can help resolve this problem for patients. Director of Pharmacy & Admixture Services for NYOH, Nancy Egerton comments on the situation by saying she’s “glad to have such a diverse group of people attending this rally.” Egerton hopes the outcome of this event is a positive resolution.

The New York State Department of Health (NYSDOH) made a policy change to their Medicaid Pharmacy Program that prevents Medicaid patients from obtaining their oral medications through their physician dispensary. This forces patients to receive their oral cancer medication prescriptions from a mail-order pharmacy, adversely affecting cancer patients’ care. According to the NYSDOH website, beginning in April 2023, all Medicaid consumers enrolled in Mainstream Managed Care will receive their prescription drugs through the Medicaid Fee-For-Service (FFS) Pharmacy Program. The FFS Program will allow NYS to pay pharmacies directly for the drugs and supplies of Medicaid consumers. The NYSDOH notified patients on September 1 leaving patients under Medicaid-managed care to try and go to an alternate source than their physician. The mail-order pharmacy creates problems and long waits for needed medication.

The NYOH are not considered a pharmacy but a dispensary not allowing patients to get their prescriptions filled at NYOH. The NYOH approached the NYSDOH about two years ago asking to be enrolled as a dispensary and allowing patients to get their prescriptions. August of 2022, the NYOH was informed that this enrollment was not going to happen.

Biden will order HHS to consider using Medicaid to support women seeking abortions across state lines

The rally will take place on October 12 at 2 p.m. at the West Capitol Park, 85 Swan Street, Albany. Many people such as Sabrina Mosseau, Executive Director, New York Oncology Hematology; Nancy Egerton, pharmacy manager, New York Oncology Hematology; representative from National Community Oncology Dispensing Association (NCODA); representative for Assemblymember Jake Ashby; representative for Senator Zellnor Myrie will be in attendance.


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