Life Science Compliance Update

November 17, 2017

FDA Approves Sixth United States Biosimilar


Recently, the FDA announced that it approved Boehringer Ingelheim’s Cyltezo (adalimumab-adbm), the second biosimilar to AbbVie’s blockbuster Humira and sixth biosimilar in the United States. “Cyltezo is the first biosimilar from Boehringer Ingelheim to be approved by the FDA and marks an important step towards our goal of providing new and more affordable treatment options to healthcare providers and patients,” said Ivan Blanarik, Senior Vice President and Head of Therapeutic Area Biosimilars at Boehringer Ingelheim. “Chronic inflammatory diseases collectively affect 23.5 million people in the U.S., and Cyltezo has the potential to deliver significant benefits to many of these individuals.”

More Details

Cyltezo is a tumor necrosis factor (TNF) blocker approved for the treatment of adults with moderately to severely active rheumatoid arthritis, active psoriatic arthritis, active ankylosing spondylitis, moderately to severely active Crohn's disease, moderately to severely active ulcerative colitis, and moderate-to-severe plaque psoriasis. In addition, adalimumab-adbm is approved for children aged 4 years or older with moderately to severely active polyarticular juvenile idiopathic arthritis.

A biosimilar is a drug that has been demonstrated to be "highly similar" to the already-approved reference product. "The biosimilar also must be shown to have no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products," FDA explains.

Future Biosimilar Predictions

As reported by Regulatory Focus, Bernstein biotech analyst Ronny Gal told investors in a note that adoption of biosimilars in the EU “continues to surprise to the upside” as member states have increased their adoption.

“Prices are lower (say ~50% discount of pre-biosimilar entry) and the commercial model is supported by very light marketing requirements. Further, the number of late-stage competitors in key markets (Enbrel, Epogen, and Remicade) is only 3-4, suggesting continuation of profitability. The big upcoming test is the adoption of the oncology products (Rituxan launched and Herceptin expected). Neulasta will presumably launch in 2018 and will do very well in the EU markets,” Gal wrote, according to Regulatory Focus.

For the US marketplace, Gal points to “two key speed bumps”: Approvals of Epogen and Neulasta have been delayed for a year and the Remicade biosimilars approved in April 2016 and last April have “failed to gain traction, exposing some weaknesses in the US market when it comes to encouraging biosimilars and casting doubt on the market,” though he expects this to change in the next 12 months. In terms of other predictions, Gal said Epogen and Neulasta biosimilars will launch in the US though he expects “relatively weak adoption” before the end of 2018.

November 16, 2017

CMS RFI Issued Regarding CMMI and Payment Models


In September, CMS issued a "request for information" (RFI) to solicit new ideas that will revamp CMS' Center for Medicare and Medicaid Innovation (CMMI) and the payment models the center creates. Specifically, CMS “is seeking your feedback on a new direction to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.”

New Model Design

According to the RFI, CMMI will approach new model design with several guiding principles:

  1. Choice and competition in the market – Promote competition based on quality, outcomes, and costs.
  1. Provider Choice and Incentives – Focus on voluntary models, with defined and reasonable control groups or comparison populations, to the extent possible, and reduce burdensome requirements and unnecessary regulations to allow physicians and other providers to focus on providing high-quality healthcare to their patients. Give beneficiaries and healthcare providers the tools and information they need to make decisions that work best for them.
  1. Patient-centered care – Empower beneficiaries, their families, and caregivers to take ownership of their health and ensure that they have the flexibility and information to make choices as they seek care across the care continuum.
  1. Benefit design and price transparency – Use data-driven insights to ensure cost-effective care that also leads to improvements in beneficiary outcomes.
  1. Transparent model design and evaluation – Draw on partnerships and collaborations with public stakeholders and harness ideas from a broad range of organizations and individuals across the country.
  1. Small Scale Testing – Test smaller scale models that may be scaled if they meet the requirements for expansion under 1115 A(c) of the Affordable Care Act (the Act). Focus on key payment interventions rather than on specific devices or equipment.

CMMI states that it is looking to test models in eight focus areas: (1) Increased participation in Advanced Alternative Payment Models (APMs); (2) Consumer-Directed Care & Market-Based Innovation Models; (3) Physician Specialty Models; (4) Prescription Drug Models; (5) Medicare Advantage (MA) Innovation Models; (6) State-Based and Local Innovation, including Medicaid-focused Models; (7) Mental and Behavioral Health Models; and (8) Program Integrity. However, the Innovation Center may also test models in other areas.

New Direction

In August, after delaying several mandatory bundled payment models, CMS ultimately proposed to scale back the Comprehensive Care for Joint Replacement (“CJR”) Model, a bundled payment program for hip and knee replacement implemented by the Obama Administration, and eliminate the Episode Payment Models and Cardiac Rehabilitation Incentive Payment Model scheduled to begin on January 1, 2018.

In a Wall Street Journal op-ed announcing the RFI, Administrator Verma noted the following: “Clinicians, patients, entrepreneurs, state officials and others are busy designing new and better ways to provide health care. There are a lot of great ideas, and we want to hear from people on the front lines. No government agency has all of the answers, especially in an industry as large and multifaceted as health care.”

As has been previously noted, accountable care organizations, hospitals, and primary care providers were not mentioned at all in the RFI. This is a major shift in focus from an agency that once championed these care settings. This lack of inclusion gives one reason to believe that bundled payments will not only continue, but will be underscored as viable paths for physicians’ success under the MACRA alternative payment model track. In addition to a shift in focus of providers, discussion in the RFI of the Physician-Focused Payment Model Technical Advisory Committee (PTAC) initiative, centered on developing physician-driven APMs, indicate that CMMI will much more focused on specialty care and specialty physicians.

November 15, 2017

CMS Not Moving Forward With October Update of Hospital Compare


The Centers for Medicare & Medicaid Services announced it will not update its overall hospital quality star ratings on Hospital Compare in October. “CMS decided not to proceed with the October update to continue its examination of potential changes to the Star Rating methodology based on public feedback,” the agency said. The star ratings released last December will remain on the Hospital Compare website until the next update, CMS said.

Flawed Methodology and Hospital Criticism

When the ratings were posted in July 2016, they were heavily criticized by hospital groups and the Medicare Payment Advisory Commission (MedPAC) for “flawed methodology” and not accounting for socioeconomic factors in a hospital’s patient population.

The AHA has continued to ask CMS to suspend the star ratings until the “methodology is improved” and consider scrapping the overall rating for ratings separated by topic areas like patient safety, patient experience and cardiac care. “The measures included in the ratings were never intended to create a single, representative score of hospital quality,” wrote Ashley Thompson, AHA’s senior vice president for public policy, in a September 25 letter to CMS.

AHA has been a frequent critic of the star ratings program, saying it has “significant concerns about the conceptual underpinning” of the program and is concerned about the “reliability and accuracy” of the methodology used to determine the one-to-five star rankings. In June it asked the CMS to suspend the program entirely.

In general, hospitals have never been a fan of the star ratings program. CMS issued the first results in July 2016, and only 2.2% of hospitals received the full five stars. AHA has said some hospitals have been incorrectly classified, and that the ratings themselves are too simplistic, as well as misleading and confusing for patients. They also say the program puts too much regulatory burden on hospitals.

How Current Rankings Work

Each year hospitals that bill Medicare must complete a Hospital Consumer Assessment of Healthcare Providers and Systems Survey, also known as Hospital CAHPS, a survey designed as a standardized methodology for measuring patients’ perspectives on hospital care.

The ratings are relatively new. The first star rankings appeared on in July 2016 and were updated in October. The star ratings are based on self-reported data points from each hospital encompassing 64 quality measurements in seven categories that include mortality, safety of care, readmissions, patient experience, effectiveness of care, timeliness of care and efficient use of medical imaging. CMS then uses an algorithm to assign a 1-5 star rating on about 3,700 hospitals nationwide, which consumers can view on the Hospital Compare section of


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