The Good Fight Provider Status Drug Shortages and

The Good Fight: Provider Status, Drug Shortages, and Drug Pricing Jillanne Schulte Wall, J. D. Director, Federal Regulatory Affairs

Key Issues • Provider Status • Drug Shortages • Drug Pricing

Provider Status • ASHP, along with PAPCC, seeking to roll provider status into a larger health care bill • Congress turning its attention to midterm elections in November – Opportunities for additional healthcare legislation limited for the remainder of 2018 – Anticipate movement on opioid-focused legislation • Given the narrower focus on opioids, PAPCC focused attention on finding a way to incorporate pharmacists and their role in addressing the epidemic

Provider Status • Intent of the provider status effort was always to enhance our members’ ability to provide care – Goal of recognition as part of interprofessional care team still stands – This can be achieved through multiple avenues • ASHP supports state-level efforts to expand scope of practice in addition to working at the federal level to include pharmacists in Medicare

Drug Shortages • Drug Shortages – – – – Small-volume parenteral solutions (SVP) Sodium bicarbonate Epinephrine Morphine Hydromorphone Sterile water Amino acids (used for IV nutrition)

Drug Shortages: Practice Advancement Efforts • 20+ years of leadership • Drug Shortages Resource Center – Ongoing partnership with University of Utah Drug Information Service • Conservation strategies and best practices • Led a roundtable discussion on shortages that included clinician groups, the FDA, and HHS – Recommendations for long-term policies – Highlighted need for greater transparency, redundancy in manufacturing – Exploring solutions to avoid or mitigate critical shortages

Drug Shortages: Hill Strategy • Spearheaded letter to Hill – Need to reopen dialog on shortages – Outlined critical questions • Congressional meetings – Staff and members of House Energy & Commerce and Senate Health, Education, Labor, & Pensions committees – Individual key offices • Congressional sign on letter to FDA on shortages – ASHP supported and worked with key members on letter

IV Opioid Shortages • ASHP has been working with DEA to ensure that active product ingredient is getting to manufacturers who can fill in the gaps left by Pfizer’s reduced capacity • February 27, 2018: ASHP spearheaded a joint letter to DEA asking them to use their discretionary authority to approve revisions of API quotas – AHA, ISMP, ASCO, and ASA also signed the letter • May 4, 2018: ASHP spearheaded a joint comment letter to DEA requesting that shortages be included as a factor in any changes to quotas and that federal agencies provide DEA with information related to current and anticipated shortages – Same signatories as the Feb. 27 th letter, with the addition of AHIP

Shortages and Global Trade Policy • Potential disruption of supply channels due to tariffs on active product ingredient (API) • ASHP submitted a letter to the United States Trade Representative requesting that no tariffs be applied to API without a full impact review by FDA • In addition to potentially exacerbating shortages, tariffs on API also carry the risk of spiking drug prices

Game Change: Hospitals Fight Back • Civica RX – Non-profit formed by hospitals to ensure a steady supply of the generic drugs – Starting with 14 hospital-administered drugs, which have not yet been announced • Founding members include: – – – Catholic Health Initiatives HCA Healthcare Intermountain Healthcare Mayo Clinic SSM Health Trinity Health

Drug pricing • Off patent drugs with no generic equivalent • Misuse of REMS to manipulate the market • Lack of competition in generic market

Campaign for Sustainable Rx Pricing • Non-partisan coalition of organizations, including AHA, AARP, AHIP, ASHP, Greater NY Hospital Association, and Walmart • Members span consumer, payer, and provider spectrum • Exploring market-based solutions, not price controls • Endorsing legislation aimed at addressing the high cost of drugs

Drug pricing legislation • Over 20 unique bills introduced in House and Senate to date • Bills fall under following categories: § Importation § Direct Federal government negotiation § Fostering competition

Congress takes note • H. R. 2212/S. 974 – “Creating and Restoring Equal Access To Equivalent Samples Act of 2017” (CREATES Act) – Reduces ability of brand drug to manipulate market – ASHP supports bill • S. 124, the “Preserve Access to Affordable Generics Act” of 2017, and S. 297, the “Increasing Competition in Pharmaceuticals Act” of 2017. – Increases competition by prohibiting “pay-to-delay” tactics or expediting reviews of a generic drug where there are currently no generic alternatives – ASHP supports these bills

HHS Drug Pricing Plan • On May 11, 2018, HHS released the Administration’s plan to combat high drug prices: – Proposals are in outline form – ASHP support will be contingent on the final policy and implementation details for each proposal • Generally, we will support proposals that align with our policies around increased transparency and improved patient access and reduced patient out-of-pocket costs – We are concerned about the 340 B proposals and some of the suggested changes to Medicare and Medicaid • The Blueprint does not touch on importation, but ASHP remains opposed to importation except to mitigate drug shortages

Promising Drug Pricing Plan Proposals Removal of the Part D gag clause Allowing more substitution in Part D Reducing patent gaming Increasing transparency and improving communication with Part D beneficiaries • Improving biosimilar access • •

Areas of Concern in the Drug Pricing Plan Merging Part B drugs into Part D Site neutrality in Part B payment Changes to Medicare and Medicaid Rebates Demonstration Projects, including value-based payment models that include major changes to payment • 340 B Changes • •

340 B Program • July and October 2017: House Energy and Commerce Committee holds hearing on 340 B – Concerns expressed over HRSA regulatory authority – How covered entities use the program – Lack of transparency • January 2018: House Energy and Commerce Committee releases report on 340 B, specifically calling for changes to the program • Senate HELP held 3 hearings

340 B Program • Changes suggested in the report: – – – HRSA regulatory authority & resources Independent audits Reduce duplicate discounts with Medicaid Promote transparency in the program Define charity care Reassess DSH as appropriate measure for program eligibility

340 B Program • March 2018: Senate Health, Education, Labor and Pensions (HELP) Committee holds hearing on 340 B – ASHP called to testify – Outlined how members interact with program – Highlight efforts to remain compliant

340 B Program • Legislative efforts underway, many bills in Congress, diverse range: – – Undue CMS cuts Moratorium on DSH child sites Reporting and transparency Define charity care, patient • Potential for more hearings?

340 B Program • Questions for covered entities: – Is no change to 340 B a long-term winning strategy? – If not, what policies can we support: • HRSA authority, resources • Transparency and reporting on how savings are utilized • Broad definitions of charity care and patient definition (HRSA could do that) • Are CMS cuts negotiating tool? • Any changes to the program should include efforts to tighten manufacturer oversight • ASHP gathering member input on questions above • November may change House composition but challenges to program will remain

CMS: 340 B Changes • CY 2018 Hospital Outpatient Prospective Payment System Proposed Rule included: – Reimbursement cut for 340 B drugs only: Average Sales Price (ASP) + 6% to ASP – 22% – Imposition of a modifier for all non-340 B drugs, even for hospitals that do not participate in 340 B • ASHP strongly opposed both proposals and they are the subject of ongoing litigation

Other 340 B Changes • On May 5, 2018, HRSA announced that it was pulling back the Civil Monetary Penalties rule, which would have increased oversight of manufacturers participating in the 340 B program – The rule had already been delayed a number of times by the Trump Administration – AHA and other groups are suing CMS over the rule • The HHS Drug Pricing Blueprint, released in May, targeted 340 B as a cause of high drug prices – No concrete proposals were made, but there was discussion of patient definition, savings tracking, and HRSA authority

Questions?