Novartis Pharmaceuticals Health Policy Monthly Update : October

Presidential Candidates Release Proposals to Impact Drug Prices

Democratic candidates for President Hillary Clinton and Sen. Bernie Sanders introduced separate proposals that would impact pharmaceutical pricing and potentially inhibit innovation. The proposals include providing Medicaid-level rebates in Medicare Part D; allowing importation of drugs from other countries; reducing the exclusivity period for biologics; requiring negotiation with the federal government for Part D rebates; preventing certain patent settlements between innovator and generics companies; requiring pharmaceutical companies to invest a specific percentage of revenue in R&D; removing tax deductions for direct-to-consumer advertising; and pushing drug companies to price based on the value of treatments assessed via comparative effective analysis.
 
House Speaker Resigns, Government Shutdown Averted

John Boehner, Speaker of the House of Representatives, announced that he will resign from Congress, effective October 31. With his resignation, Speaker Boehner was able to put forth a bill to avert a partial government shutdown that would have begun October 1, 2015 if Congress had not passed legislation to provide funding to keep the government functioning. Previously, Speaker Boehner had faced threats to his leadership position if he put forward the bill, which included funding for Planned Parenthood. On September 30, legislation providing funding for the government until December 11 was passed by both the House and Senate and was signed by President Obama.
 
NCQA Releases Health Plan Ratings

The National Committee for Quality Assurance (NCQA) released a new health plan rating system, using a 1.0 to 5.0 scale with 5.0 indicating higher performance. This new rating system replaces their previous health plan ranking system. Evaluating more than 1,000 plans, including commercial, Medicaid, and Medicare Part D plans, the new rating system assesses three major performance categories, consumer satisfaction, prevention, and treatment and it provides a simple way for consumers to gauge the quality of care being provided by a health plan. The new plan rating system shows that Maine, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, Vermont, Michigan, Minnesota, and Wisconsin had the highest percentage of plans receiving a 4.5 or 5.0 rating.

 
CMS Announces Medicare Advantage Value-Based Insurance Design

On September 1, 2015, the Centers for Medicare & Medicaid Services (CMS) announced the Medicare Advantage Value-Based Insurance Design (VBID) Model, which will test the hypothesis that giving Medicare Advantage plans flexibility to offer targeted extra supplemental benefits or reduced cost sharing to enrollees who have specified chronic conditions can lead to higher quality and more cost-efficient care. The VBID Model will begin January 1, 2017 and run for five years. CMS will test the model in seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. Upon approval from CMS, eligible Medicare Advantage plans in these states can offer varied plan benefit design for enrollees who fall into the following clinical categories: diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, and mood disorders.
 
Medicare Advantage and Part D Markets Largely Stable from 2015-2016

On September 21, 2015, CMS announced that premiums for Medicare Advantage (MA) plans will remain stable in 2016. CMS estimates that the average MA premium will decrease by $0.31 next year, from $32.91 on average in 2015 to $32.60 in 2016. Enrollment in MA is projected to increase to approximately 17.4 million enrollees, which represents about 32 percent of the Medicare population. Earlier this year, CMS announced that the average basic Medicare prescription drug plan premium in 2016 is projected to remain stable at $32.50 per month. The Annual Election Period for Medicare health and drug plans begins on October 15, 2015 and ends December 7, 2015.
 
CMS Announces the Enhanced Medication Therapy Management Model

On September 28, 2015, the Center for Medicare and Medicaid Innovation (CMMI) announced a five-year model to test approaches to improve Medicare Part D beneficiary medication use. The Part D Enhanced Medication Therapy Management (MTM) Model will test whether changes to the Part D program can help to better align the interests of plan sponsors with those of the federal government. Eligible basic stand-alone prescription drug plans (PDPs), upon approval from CMS, can vary the intensity and types of MTM items and services based on beneficiary risk level and seek out a range of strategies to individualize beneficiary and prescriber outreach and engagement. An initial five-year performance period will begin January 1, 2017 in five Part D regions spanning 11 states: Region 7 (Virginia), Region 11 (Florida), Region 21 (Louisiana), Region 25 (Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wyoming), and Region 28 (Arizona).

 
HHS Releases Latest Exchange Enrollment Numbers

The U.S. Department of Health and Human Services (HHS) has released their latest enrollment numbers for both the federal and state exchanges. As is to be expected, actual enrollment is down slightly from the March report. Almost 9.9 million people had paid their first month’s premium as of June 30, slightly above the projected enrollment of 9.1 million people. Of those paying their premiums, 84%, or 8.3 million, received premium tax credits and 5.5 million people also received cost sharing subsidies. Premium tax credits averaged $270 a month. Approximately 423,000 people had their 2015 coverage terminated for failure to provide the necessary documentation of citizenship or legal immigrant status. More than 6.7 million people enrolled in a silver tiered plan, 2.1 million enrolled in bronze or catastrophic, almost 700,000 selected a gold tier and 332,000 picked platinum. In early September, CMS reported that Medicaid and CHIP enrollment had reached 72 million. The increase in both public and private insurance programs has dropped the national uninsured rate to below 10%.

 
HHS Issues Proposed Rule Regarding ACA’s Non-discrimination Provisions

HHS issued a draft rule providing clarity to the Affordable Care Act’s prohibition on discrimination in insurance coverage on the basis of race, color, age, national origin, sex, and disability. The proposed rule covers consumers’ rights under the ACA, obligations of covered entities, the inclusion of gender identify discrimination as a form of sex discrimination, requirements for effective communication to those with disabilities, and language assistance for those with limited English proficiency. Discriminatory practices in benefit plan design, marketing and cost sharing are prohibited. The proposed regulations apply to health insurers participating in the federal and state-based exchanges, Medicare Advantage and Medicaid programs. These protections are extended to all individual and group products sold by a participating insurer. As drafted, the proposed regulations are a step forward in eliminating discriminatory practices that prevent patients with chronic conditions from accessing necessary medication but opportunities for more specific language in the final regulations remain.

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