Life Science Compliance Update

September 11, 2017

Louisiana Price Transparency Measures Go into Effect…With An Interesting Twist

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According to LexisNexis State Net, during 2017, about half of the states and Congress collectively introduced almost 90 measures intended to address soaring prescription drug prices. Most would either cap drug prices or force drug makers to be more transparent with how they devise pricing for at least some medications.

A handful of states, including Maryland (HB 631), Louisiana (SB 59) and Nevada (HB 539), have adopted such measures this year, and New York adopted a law in April as part of the budget that imposes greater scrutiny on drug makers over their pricing.

There is also word that the Trump administration is planning action. Although the Food and Drug Administration has no direct control over drug prices, in a June blog post FDA Commissioner Scott Gottlieb said his agency plans to encourage the development of additional lower-cost generic drugs. The effort would likely have a limited impact, however, as the growth in drug prices is largely driven by newer drugs under patent and without generic competition.

In mid-June 2017, Governor John Bel Edwards of Louisiana signed two drug price transparency measures. HB 436 – unanimously passed by the legislature – requires manufacturers engaging in the marketing of prescription drugs in the state to make quarterly reports of the wholesale acquisition cost (WAC) prices to the Louisiana Board of Pharmacy.

SB 59 – also passed unanimously – requires the Louisiana Board of Pharmacy to post on a website those WAC prices, organized by therapeutic category. Health profession licensing boards that regulate Louisiana prescribers are required to annually remind/advise them as to the availability of the website. Interestingly, however, is the mandate that the Board obtains private grant funding to implement and operate the website.

HB 436 requires that, “Each drug manufacturer or pharmaceutical marketer who engages in any form of prescription drug marketing to a prescriber, his designee, or any member of his staff in Louisiana shall provide to the Louisiana Board of Pharmacy no later than January first, April first, July first, and October first of each calendar year the current wholesale acquisition cost information for the United States Food and Drug Administration approved drugs marketed in the state by that manufacturer.”

The Senate bill requires “the Louisiana Board of Pharmacy … develop a website to contain prescription drug price information to be made available to Louisiana prescribers on the board's website with a dedicated link that is prominently displayed on the board's home page, or by a separate easily identifiable internet address.” The website shall include, at a minimum, the following data elements, separated by therapeutic category: (a) Name of the product; (b) Whether the drug is a brand name or a generic; (c) Drug strength; (d) Per-unit wholesale acquisition cost of the drug; and (e) Any disclaimers deemed appropriate by the board.

With respect to the grant, the law states, “Implementation of this Section shall be contingent upon the Louisiana Board of Pharmacy's obtaining grant funds from private entities for the development, implementation, operation, and continued maintenance of the drug pricing disclosure website.” It is also mandated that the “board shall actively seek grant funding to implement the provisions of this Section. Within ten months of successful receipt of grant funds sufficient in amount to implement the provisions of this Section, the board shall make the drug pricing disclosure website available to prescribers.”

We were unable to find any news as to the success of the finding of the grant funding. The bill became effective June 14, 2017.

September 01, 2017

Chicago Proposes Drug Pricing Transparency Ordinance

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Chicago Alderman Edward M. Burke recently held a hearing on the proposed city ordinance, “Chicago Drug Pricing Transparency Ordinance.” The ordinance would mandate that pharmaceutical manufacturers whose drugs are sold in Chicago must disclose any rise in prices ninety days in advance if those increases fall within one of the pre-selected categories.

The ordinance proposes establishing a Prescription Drug Price Review Board, which shall be responsible for: (1) reviewing trends in the list price of medications dispensed or prescribed through its services – either directly or through public and private partnerships; (2) publishing an annual report highlighting prescription drug pricing trends within the City and where the data suggests the need for legislative, administrative, or other policy changes and put the report on file with the City Council Committee on Finance semi-annually, and presenting it to the City Council Committee on Finance at a hearing at least once per calendar year; (3) promulgating public advisory opinions about specific drugs, drug classes, or drug manufacturers that satisfy the standards for pricing practices to its facilities, partners, website, and the City’s Benefits Management Division; (4) establishing a “Pharmaceutical Price Watch Hotline” to accept notifications and information about pharmaceutical price increases from the public; and (5) effectuating and enforcing the regulations.

The Hotline in number four is expected to be available via phone, email, internet portal, social media outlets, or other generally available methods of communication as designated by the Commissioner.

With respect to price increases, any manufacturers of pharmaceuticals sold in Chicago shall notify the City of Chicago Department of Public Health Commissioner of price increases and launch price notifications and justifications. For brand-name drugs, the manufacturers shall notify the Commissioner if a Wholesale Acquisition Cost (“WAC”) increases ten percent or more, if there is a twelve-month period WAC increase of $10,000 or more, or if they introduce a pharmaceutical that has a twelve-month WAC of $30,000 or more.

For a generic drug, manufacturers shall notify the Commissioner of a WAC increase of 25% or more, a twelve-month period WAC increase of $300 or more, or an introduction to market of a pharmaceutical that has a twelve-month WAC of $3,000 or more.

The proposed ordinance requires that the manufacturers justify the proposed price or price increases via documents and other information to substantiate their selection of the launch price or price increase, including research, materials, manufacturing, administrative expenses, life cycle management, market competition and context, manufacturer revenue and loss data, and estimated cost-effectiveness of the product.

The proposed ordinance states that Chicago has the ability to enact such an ordinance because “pursuant to its home rule power, the City of Chicago may exercise any power and perform any function relating to its government and affairs including the power to regulate for the protection of the public health, safety, morals, and welfare.”

Unfortunately, if enacted, the proposal will likely have an effect on the bottom line of pharmaceutical companies. “When you price control the way that this ordinance is proposed to do, it doesn’t allow for the reinvestment of those profits and money to create and develop other life-saving machines,” said Michael Reever, Chamber of Commerce.

August 30, 2017

After a Quiet Summer, Congress Starts Probe into MS Drugs

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Congress has recently taken a few months off from constantly barraging the pharmaceutical industry with daily probes and negative news. However, on Thursday, August 17, 2017, Representatives Elijah Cummings of Maryland and Peter Welch of Vermont announced a probe into multiple sclerosis (MS) drug costs, focusing on pricing from seven different pharmaceutical companies, starting with letters to those companies.

Cummings and Welch are asking Bayer, Biogen, Serono (Merck KGaA), Novartis, Sanofi, Teva, and Roche for details about their pricing, focusing on the reasons behind price increases over the past several years. Teva leads the pack with price increase – Copaxone 20mg increased over 1000% from 1996 through 2017. Compare that to Biogen’s Avonex (also approved in 1996), which increased by 691% during that same period.

The average annual cost of MS therapy rose to $78,000 in 2016 from $16,000 in 2004, according to the National Multiple Sclerosis Society.

A table created by FiercePharma shows the top fifteen MS drugs and their costs, along with the years the drugs were approved in and the percentage increase since the year of approval, can be seen below.

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A joint press release issued by the representatives states,

We are launching an in-depth investigation to determine why drug companies are dramatically increasing their prices for drugs used to treat Multiple Sclerosis (MS), which is a disease of the central nervous system that often has devastating and disabling effects on patients. We believe no American should be forced to struggle to afford lifesaving medical treatments, especially when drug companies increase prices without warning, cause, or justification.

In the letters, Cummings and Welch cited an American Academy of Neurology Study that found some drug companies seem to be increasing their prices and setting new, higher prices in tandem with their competitors.

The letters requested information to evaluate the substantial price increases of MS drugs, including information about corporate profits and expenses and documents concerning pricing strategies, patient assistance programs, and drug distribution systems. They requested the information be provided by August 31, 2017.

Representatives for Biogen, Novartis, Merck KGaA and Teva said the companies are reviewing the letters. A Bayer spokesperson said the company plans to respond directly. A Roche spokesperson said the company "will work with the Congressmen to address their request and questions."

This is the latest investigation into high drug prices in Congress. Some investigations have led to legislation to clamp down on high drug prices. For instance, Congress recently passed legislation that lets the FDA boost competition for off-patent drugs that see high price hikes.

Please see the following links for the letters to Bayer, Biogen, Serono, Novartis, Sanofi, Teva, and Roche.

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