Legal Notes for Independent Pharmacies

Legal Notes is AAP’s news source about federal and state laws and pending legislation that affects independent and community pharmacies.

2023 set to be a banner year for new prescription drugs

A group of pricey breakthrough prescription drugs are poised to shake up the market this year — including an Alzheimer’s treatment that could be approved today by the FDA.

Why it matters: Though the drugs offer hope to patients with hard-to-treat conditions like Alzheimer’s or sickle cell disease, or who struggle with obesity, their potentially eye-popping prices are sure to create dilemmas for insurers, government programs and patients themselves.

The big picture: The approvals could fuel already-contentious debates around affordability and equity, giving ammunition both to those who say innovation doesn’t come cheap and others who contend medical advances are meaningless if patients can’t access them.

  • Although some of the drugs could be transformative, “they will create choices that need to be made and they will also create potential burdens, particularly on the most vulnerable, on people who are the least well-insured and people who live in states or happen to have insurance coverage that is the least generous,” said Rena Conti, a professor at Boston University’s Questrom School of Business.
  • None of the drugs would be subject to the price controls that congressional Democrats included in the Inflation Reduction Act.

Driving the news: The FDA is expected to today decide whether to approve Eisai and Biogen’s lecanemab, a treatment for Alzheimer’s disease, setting into motion another round of debate over how much the drug should cost and whether Medicare should cover it.

  • It would become the second FDA-approved Alzheimer’s treatment targeting amyloid plaques that are believed to contribute to the development of the disease. But it isn’t likely to cause as much controversy as Biogen’s Aduhelm did when it was approved in 2021.
  • Biogen initially priced that drug at $56,000 a year, drawing outrage from critics and presenting big questions about how Medicare could absorb the large spending spike if millions of beneficiaries tried to get it.
  • If lecanemab is approved, experts will be closely watching both its list price and whether the FDA limits its use to subgroups of Alzheimer’s patients. Both factors will be crucial in determining potential spending on the drug.
  • A cost-effective price would be between $8,500 and $20,600 a year, the Institute for Clinical and Economic Review said last month.

State of play: The drug pipeline is brimming with other experimental cures that could make headlines this year.

  • Data for another promising Alzheimer’s treatment by Eli Lilly that is similar to lecanemab is expected midyear, per a recent Cowen research note, and Medicare will almost certainly have to revisit its coverage policy for the entire class of drugs.
  • Several multi-million dollar gene therapies have already been approved. But this year the pipeline includes two treatments for sickle cell disease, which has a much larger patient population.
  • Clinical trial results for Eli Lilly’s obesity drug candidate are also expected in April, potentially ushering a new entrant to what could become a booming market. Disputes over coverage of obesity drugs already on the market will almost certainty continue.

Between the lines: Some novel drugs present an inherent dilemma: They’re worth a lot of money because of the way they can dramatically improve patients’ lives. Even so, manufacturers can still price these drugs well above what experts say they’re worth.

  • Gene therapies may cost millions per patient. Other drugs could cost much less per course, but cater to enormous patient populations or may require long-term use.
  • In any scenario, the expense could present complex problems to federal and state health programs, private insurers and patients who wind up on the hook for out-of-pocket costs.
  • “We’re fortunate there are so many treatments in the pipeline that promise to transform the quality of care for people with devastating diseases. While we recognize there are concerns about cost, the facts point to a health care system that can sustain this incredible innovation over the long haul,” said Priscilla VanderVeer, vice president of public affairs at PhRMA.

Yes, but: The final cost burden hinges on several factors, starting with where manufacturers set the launch price.

CMS releases CY 2023 physician fee schedule

CMS has issued the final physician fee schedule for CY 2023, which updates vaccine payment information. The CY 2023 payment amount for influenza, pneumococcal, and HBV vaccine administration is $31.14. This amount will be geographically adjusted based upon the fee schedule area where the preventive vaccine is administered. With regard to COVID-19 vaccine administration, for CY 2023 the payment amount is $41.52. This differential will remain in place until the end of the calendar year in which the current Emergency Use Authorization declaration for drugs and biologicals with respect to COVID-19 ends. Thereafter, the payment amount for COVID-19 vaccine administration will be adjusted to align with the payment rate for the other Medicare Part B preventive vaccines. Learn more.

CVS and Walgreens agree to $10 billion opioid settlement

Two of the largest U.S. pharmacy chains, CVS Health and Walgreen Co., announced agreements in principle Wednesday to pay about $5 billion each to settle lawsuits nationwide over the toll of opioids, and a lawyer said Walmart is in discussions for a deal.

Together, the developments amount to what could be the last round of huge settlements after years of litigation over the drug industry’s role in an overdose crisis that has been linked to more than 500,000 deaths in the U.S. over the past two decades. Read more.

Independent Pharmacy News: January 2023 Will Bring Wave of New State Laws Targeting Drug Prices and PBMs

Courtesy of Apotex

With the adjournment of the California Assembly on August 31, only four state legislatures remain in session for 2022—Michigan, Pennsylvania, Ohio, and New Jersey. (As of this writing, Missouri is in Special Session to deal with state tax issues; a state legislature calendar is available here.) The National Conference of State Legislatures bill tracking database shows that through August, 418 bills had been introduced, in 47 states, directly addressing prescription drug-related issues. Read more.

A Last Minute Approval Gives FDA User Fee Reauthorization

Courtesy of Apotex

At last! After nearly a year of committee hearings and political maneuvering, Congress finally has approved legislation to reauthorize FDA’s user fee programs for brand and generic drugs, biosimilars, and medical devices. The current programs expire with the close of fiscal year 2022 on September 30. Reauthorization will enable FDA to continue collecting application and facility user fees from industry for fiscal years 2023 through 2027, a 5-year period that begins October 1. Read more.

Judge Rejects Antitrust Challenge to UnitedHealth Acquisition

A federal judge ruled on September 19, 2022, against a Justice Department antitrust challenge to UnitedHealth‘s $13 billion acquisition of health-technology firm Change Healthcare, rejecting government claims that the deal would unlawfully suppress competition and limit innovation in health-insurance markets.

U.S. District Judge Carl Nichols ruled for the companies in an opinion that he kept under seal for now because he said it “may contain competitively sensitive information.” The judge said he would release a redacted public version of the ruling in the coming days. In a one-page public order, he denied the Justice Department’s request to block the companies from completing the deal. Read more

Inflation Reduction Act Becomes Law: How Will It Affect Health Care?

Under the new law, the U.S. government is now able to negotiate prices on the costliest prescription drugs, cap costs at $2,000 per year for people on Medicare, limit the monthly cost of insulin to $35 for seniors, and extend subsidies for people buying their own health coverage through the Affordable Care Act, also known as Obamacare. The law also provides free vaccines for seniors. Read more.

What independent pharmacies can expect in the 2022 – 2023 flu season

Flu season is fast approaching. And it’s more important than ever for patients, particularly those who are at risk, to be vaccinated against influenza. Adults 65 and older, along with those with severe health problems, people of color and those of lower socio-economic status are at higher risk of developing severe complications from the illness. Getting vaccinated can help protect these vulnerable populations. Learn more about the selected strains, changes to vaccine recommendations and what to expect next.

Independent Pharmacies Under Attack: Protecting your patients’ personal information

Did you know that more than one-third of health care organizations in the United States were hit by ransomware attacks in 2020? Approximately 65% of these attacks were successful, and approximately one-third of the organizations that had data stolen paid up. However, only 69% of organizations that paid ransom actually got their data back. Here are some tips to help you protect your patients’ information. Read more

PBM ruling for North Dakota stands

With PCMA’s failure to file its appeal by the July 11, 2022 deadline, North Dakota can regulate PBMs as it sees fit. PCMA has exhausted its legal options. So, the ruling in PCMA vs. Wehbi is now the law of the land for the states in the 8th Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota). Read more

Florida Governor DeSantis signs PBM executive order

As expected, Florida Governor Ron DeSantis signed the PBM transparency order.  The order is aimed at lowering the price of prescription drugs. AAP Member Ben Levine was at the governor’s side during the signing. Levine calls this order a victory for all Floridians. “This transparency will really help drive down drug prices, and also improve access for patients in our community so that they can go to the pharmacy they choose.” Read more about the executive order.

AAP Member Ben Levine

FDA allows pharmacists to prescribe Paxlovid for COVID-19 treatment

01 March 2022, Berlin: The drug Paxlovid against Covid-19 from the manufacturer Pfizer is lying on a table. Photo: Fabian Sommer/dpa (Photo by Fabian Sommer/picture alliance via Getty Images)

It’s a win for pharmacies, which had been pushing for the FDA to allow them to prescribe the medication, saying that it would ultimately expand access to the antivirals. 

Paxlovid is authorized for the treatment of “mild-to-moderate” COVID-19 in adults and pediatric patients that have tested positive and are considered to be at high risk of developing severe disease.

Read more about the authorization.

In the news: PBM legislation inside a new gun bill

Many Americans across the political spectrum are clamoring for federal action on guns in the wake of a mass shooting at an Uvalde, Texas, elementary schoola Buffalo, N.Y., grocery store and hundreds of other places.

But buried in a bipartisan compromise hashed out by the U.S. Senate on Tuesday is an unrelated provision they might not be so happy about.

The gun bill would enhance the exemption drug middlemen working with Medicare have from the federal “Anti-Kickback Statute.” Read more.

Cardinal Health issues new alert on fraudulent activity

Cardinal Health issued a new alert regarding recently reported fraudulent activity. There are reports of individuals falsely claiming to be representatives from pharmaceutical wholesalers and courier service employees. This is an industry-wide issue, as criminals attempt to place orders and intercept delivery of the product. Be on the lookout, and read the full alert here.