OHSU Center for Evidence-based Policy Rhonda Anderson, RPh Director - - PowerPoint PPT Presentation

OHSU Center for Evidence-based Policy

Rhonda Anderson, RPh Director of Pharmacy EMPAA 2017 October 30, 2017

Wedding Day Preparation

The Big Moment is Here…

• Mr. & Mrs. Anderson

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Today’s Presentation

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• Center for Evidence-based Policy (CEbP): Overview of

the Center

• CEbP Work with States
• State Medicaid Alternative Reimbursement and

Purchasing Test for High Cost Drugs (SMART-D): – Project Overview – Initial Experience Working with States

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Disclosure Declaration

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I have no actual or potential conflicts of interest to disclose in relation to this presentation.

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Center for Evidence-based Policy:

Overview of the Center and Our Work with States

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Center for Evidence-based Policy

– Established in 2003 – Based at Oregon Health & Science University – Applying data and evidence to public policy challenges – Evidence review, data analysis, stakeholder engagement, policy development – 35 people - MPH, PhD, MD, RPh – Not academic publishing focused (or interested)

Who We Are

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Center for Evidence-based Policy

– Our work is driven by states, 90% in Medicaid – We are not funded by industry or associations – We have one foundation grant (LJAF) – Worked with 25 states in the past two years – We do not lobby – We are nonpartisan

Who We Are

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Center for Evidence-based Policy

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Center Mission:

Addressing policy challenges with evidence and collaboration

Center for Evidence-based Policy

Currently the Center works with 25 states:

Multi‐state Collaborations

MED DERP SMART‐D Medical Cannabis (work in progress)

Single‐state Evidence Assistance & Data

NY OR WA P4P

Health Process Systems Engineering

NH WA ACH TX

Others

CO MPC EiHP

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Our two largest programs:

– MED – 20 states

• Research, evidence, policy for Medicaid

(largely excluding pharmacy)

– DERP – 14 states

• Research, evidence, comparative

effectiveness for Medicaid pharmacy

Who We Are

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Self-governing collaboration of organizations that:

• Obtains and synthesizes global evidence on the

comparative effectiveness, safety, and effects on subpopulations of drugs within classes.

• Supports policy makers in using evidence to inform

policies for local decision making.

• Produces recently expanded evidence products to

meet changing needs

• Refined focus in July 2012

– Focus on high-impact, specialty drugs – Proprietary beginning in July 2012 – Expanded evidence products to meet changing needs

Drug Effectiveness Review Project

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

• The Drug Effectiveness Review Project (DERP) is a trailblazing

collaborative state Medicaid and public pharmacy programs

• DERP produces concise, comparative, evidence-based

products that assist policymakers and other decision-makers grappling with difficult drug coverage decisions

• Collaborative founded in 2003

– Under Gov. Kitzhaber’s Administration – Originally was 3 state collaboration that expanded to include up to 15 states

• Oregon
• Washington
• Idaho

– Was the building block for the Center for Evidence-based Policy

DERP Mission

Participating States

• Washington
• Oregon
• Idaho
• Montana
• Colorado
• Texas
• Minnesota
• Wisconsin
• Missouri
• Tennessee
• North Carolina
• New York
• District of Columbia

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State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

• New high-cost therapies are increasing
• State budgets are finite – 49 states have

balanced budget requirements

• States need better tools to provide access while

managing costs. – DERP – SMART-D

State Situation and Needs

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

State Medicaid Drug Spending

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• Nationwide, state Medicaid drug spending grew at 14% between 2014

and 2015

• States are feeling the pinch:

– Florida had to provide an additional payment to Medicaid managed care plans for covering hepatitis C drug costs in 2014 – Missouri had to seek a midyear supplemental appropriation of $150m to address escalating drug costs in Medicaid in 2016 – In 2016, Washington reported that it would cost $242m/year to provide drugs for high-risk hepatitis C patients and $1.0b/year if treatment were provided for all the state’s Medicaid clients infected with hepatitis C

Sources: National Health Expenditures, https://www.cms.gov/Research‐Statistics‐Data‐and‐Systems/Statistics‐Trends‐and‐Reports/ NationalHealthExpendData /index.html; FL & MO in SMART‐D Summary Report, 2016, http://smart‐d.org/wp‐content/uploads/2016/09/SMART‐D‐Summary‐Report‐Final.pdf ; WA from http://www.seattletimes.com/seattle‐news/health/lawsuit‐targets‐medicaid‐policy‐that‐limits‐spendy‐hep‐c‐drugs/

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Medicaid Pharmacy Program Dynamics

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• State management tools are limited

– States are required to cover if a federal rebate agreement exists – States cannot use closed formularies, although preferred drug lists are allowed;

• Prescription limits are regulated

– States can negotiate supplemental state rebates;

• kept confidential.

– States can use prior authorization criteria with the PDL …but in the end, the states will have to pay – regardless of efficacy

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

MDRP Dynamics

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• Medicaid “Best Price” provisions do not necessarily get

triggered by Medicaid

– Supplemental rebate negotiated by state Medicaid agencies will not trigger “Best Price”; “Best Price” is a lever in commercial negotiations

• CPI penalty impact

– Incentive for manufacturers to set a high price upon entering MDRP because increases are limited to CPI – CPI penalty can reduce price of brand name drug to Medicaid so it is less expensive than a new generic equivalent

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Other Federal and State Requirements

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• Other federal issues

– Prohibition against off-label promotion by manufacturers – Anti-kickback statute – Overlapping discounts with 340B prices, payer rebates, etc.

• Relevant state law

– Preferred drug list and prior authorization exclusions – “Any willing provider” laws – Regulation of MCOs and pharmacy benefit managers (PBMs) requiring transparency, etc.

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State Medicaid Alternative Reimbursement and Purchasing Test for High Cost Drugs (SMART-D):

Project Overview

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

SMART-D Project Goals

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CEbP has undertaken a three-year, three-phase pilot program funded by the Laura and John Arnold

• Foundation. The program has the following purposes:
• to strengthen the ability of Medicaid programs to

manage prescription drugs through alternative payment methodologies, and

• to provide Medicaid leaders with opportunities to shape

the national conversation on prescription drug innovation, access and affordability

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Summary of Project Phases

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Three to Five States Implement Alternative Purchasing Models (scope based on implementation plans) Develop and Secure Implementation Plans for Alternative Purchasing Models Complete Situational Analysis: Alternative Purchasing Model Barriers and Opportunities

PHASE ONE: DISCOVER

(FEBRUARY – JULY 2016)

PHASE TWO: DISSEMINATE

(AUGUST 2016 – APRIL 2017)

PHASE THREE: IMPLEMENT

(MAY 2017 – APRIL 2018)

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D) 25

• An APM is a contract between a payer and drug

manufacturer that ties payment for a drug or drugs to an agreed-upon measure

• Our research has highlighted two pathways of

APMs in Europe and the U.S.: – Financial-based – Health outcome-based

Alternative Payment Models

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D) 26

Financial-based APMs

• Designed at either patient or population level
• Rely on financial caps or discounts to provide predictability and

limit financial risk

• Financial targets tend to be easier to administer

Health outcome-based APMs

• Payments tied to predetermined clinical outcomes or

measurements

• Sometimes conditional coverage while data is collected regarding

clinical effectiveness

• Can require significant data collection, but have potential to

increase quality, value and efficiency of treatment

APMs

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D) 27

APMs

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

APM’S USED IN OTHER MARKETS/ COUNTRIES DRUGS IN THE PIPELINE CURRENT MEDICAID PRESCRIPTION DRUG PRACTICES MEDICAID APM LEGAL OPTIONS ALIGN WITH MEDICAID DELIVERY SYSTEMS REFORM INITIATIVES

Medicaid Prescription Drug APMs: Putting the Pieces Together

28 State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

PRESCRIPTION DRUG ALTERNATIVE PAYMENT MECHANISMS

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

SMART-D Website and Phase 1 Reports

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• See www.smart-d.org
• Research and reports tab:

1. Summary Report 2. Legal Brief 3. Economic Analysis 4. APM Brief 5. MED Policy Report

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

SMART-D Technical Assistance

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• Center’s goal is to support states with technical

assistance resources for development of APM implementation plans

• SMART-D team has identified technical assistance

needs and opportunities in four areas:

1. Economic Analysis of High Cost Drugs 2. Legal and Compliance Framework 3. APM Development 4. Communication and Engagement

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

SMART-D Economic Analysis of High Cost Drugs

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• Found 64 high-cost specialty drugs accounted for 32.6% of

Medicaid drug reimbursement spending and 3.1% of overall Medicaid spending in 2015

• 64 drugs reimbursed at over $600 per prescription = $72m

in annual Medicaid expenditure

• There are at least 110 additional drugs in the pipeline in the

next two years that are likely to meet this same criteria and have a similar budget impact

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Legal and Compliance Analysis Framework

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• Understand the current federal and state legal framework for

Medicaid prescription drug coverage and payment through the Medicaid Drug Rebate Program (MDRP)

• Explore potential APM options within and outside MDRP to drive the

use of clinically valuable drugs and manage prescription drug costs

• Accommodate different state Medicaid delivery system models (fee-

for-service or managed care contracting)

• Support value-based payment approaches with pharmacies and other

health care providers, in addition to agreements negotiated directly with prescription drug manufacturers

• Align with state Medicaid value-based payment and delivery system

transformation efforts

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

State Opportunities: Pathways

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Pathway One: Supplemental Rebate Arrangements Pathway Two: Managed Care Organization (MCO) Contracting Pathway Three: MCO/340B Covered Entity Partnerships Pathway Four: Hospital‐Dispensed Covered Outpatient Drugs Pathway Five: Physician‐Administered Drugs That Fall Outside “Covered Outpatient Drug Definition Pathway Six: Alternative Benefit Plan Pathway Seven: Section 1115 Waiver Pathway Eight: 340B with Innovative Care Delivery Models

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State Medicaid Alternative Reimbursement and Purchasing Test for High Cost Drugs (SMART-D):

Initial Experience Working with SMART-D States

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Drugs & Conditions Prioritized for Potential APM Development

• Hemophilia
• Diabetes long acting insulin
• Anti‐coagulants
• Anti‐inflammatories
• Oral chemotherapy
• Atypical Antipsychotic ‐ Long‐Acting Injectables
• Multiple Sclerosis
• Cystic Fibrosis
• Orphan drugs (SMA)
• Hepatitis C

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

State Opportunities: Pathways Currently Under Exploration by SMART-D States

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Pathway One: Supplemental Rebate Arrangements Pathway Two: Managed Care Organization (MCO) Contracting Pathway Three: MCO/340B Covered Entity Partnerships Pathway Four: Hospital‐Dispensed Covered Outpatient Drugs Pathway Five: Physician‐Administered Drugs That Fall Outside “Covered Outpatient Drug Definition Pathway Six: Alternative Benefit Plan Pathway Seven: Section 1115 Waiver Pathway Eight: 340B with Innovative Care Delivery Models

?

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

SMART-D APM Characteristics To Date

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Alternative models that generate viable discussions have certain characteristics, such as:

a) Good competition in drug class, with some branded drugs newer to market, and a contract outcome measure that can be easily tracked in claims data. b) Rare or orphan diseases where the Medicaid program can organize patient care into a center of excellence model including wrap-around patient care services to improve clinical outcomes, drug adherence, and data gathering for clinical outcome measures. c) Multi-state opportunities where a drug manufacturer needs scale and a certain number of lives to make an alternative model worthwhile for outcome measurement.

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Overview of SMART-D APM Development

Stage 1:

Engage & Identify

Stage 1:

Engage & Identify

Draft APM strategy with state team Engage manufacturers and other key partners (340b, MCOs, CMS) Engage manufacturers and other key partners (340b, MCOs, CMS) Collect baseline data to support APM development Collect baseline data to support APM development

Stage 2:

Formalize & Finalize

Stage 2:

Formalize & Finalize

Finalize APM & secure state leadership support Finalize APM & secure state leadership support Finalize contracts between States, manufacturers, and

• ther parties

Finalize contracts between States, manufacturers, and

• ther parties

Establish evaluation plan & data collection methodology Establish evaluation plan & data collection methodology

Stage 3:

Implement & Monitor

Stage 3:

Implement & Monitor

Implement APM Implement APM Implement data tracking, monitoring, and reporting Implement data tracking, monitoring, and reporting

State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)

Questions and Discussion

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