Life Science Compliance Update

April 17, 2018

State of Washington Enacts Statewide Drug Disposal Law

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On March 22, 2018, the State of Washington officially enacted the first statewide drug take-back program in the country. Washington Governor Jay Inslee signed HB 1047 into law, which establishes a single, uniform, statewide system of regulation for safe and secure collection and disposal of medicines through a uniform drug "take-back" program operated and funded by drug manufacturers.

The Act goes into effect on June 7, 2018, and requires “covered manufacturers” to submit their proposed programs by July 1, 2019. Also by July 2, 2019, Washington’s Department of Health (DOH) must determine its own costs for administration, oversight, and enforcement, as well as set fees and adopt rules establishing program proposal requirements. The estimated costs to pharmaceutical companies is less than one percent of the annual sales made in Washington markets, though time will tell.

Covered Drugs

Under the Act, only “covered drugs” are part of the take-back program. The Act further defines “covered drugs” as those that are both prescription and non-prescription, brand name and generic, drugs for veterinary use, and drugs in medical device and combination products. Included in that broad definition are drugs administered via ingestion, injection, and inhalation. Excluded from the Act are “exposed” needles and sharps, as well as “used drug products that are medical wastes.”

Further, “covered drugs” are those that “covered entities” no longer want and that the covered entities either have already abandoned or discarded or plan to abandon or discard.

Exempt Products

The follow products are exempt from any requirements under the Act: (1) Vitamins, minerals, or supplements; (2) Herbal-based remedies and homeopathic drugs, products, or remedies; (3) Schedule I controlled substances; (4) Cosmetics, shampoos, sunscreens, lip balm, toothpaste, antiperspirants, or other personal care products that are regulated as both cosmetics and nonprescription drugs under the Federal Food, Drug, and Cosmetic Act; (5) Drugs for which manufacturers provide a pharmaceutical product stewardship or drug take-back program as part of a FDA REMS; (6) Biological drug products; (7) Drugs that are administered in a clinical setting; or (8) Pet pesticide products contained in pet collars, powders, shampoos, topical applications, or other forms.

Covered Entity

The Act also defines “Covered entity” as any state resident or other non-business entity. This therefore excludes any hospitals, clinics, healthcare providers offices, veterinary clinics, pharmacies, law enforcement agencies, and any other businesses.

Covered Manufacturer

Covered manufacturers” are those that are engage in the manufacture of covered drugs that are sold in or into Washington. Under this definition, any manufacturers relating to the production, preparation, propagation, compounding, or processing of the drug, substance, or device, will be considered a covered manufacturer. The packager or labeler of the drug is also included.

Not included in this definition are any private label distributors, retail pharmacies selling the drug under the pharmacy’s store label, repackagers, or nonprofit health care corporations that repackages drugs solely to supply them to facilities or retail pharmacies operated by the same corporation or an affiliate.

Obligations of Wholesalers and Other Covered Manufacturers

A drug wholesaler that sells a drug in or into Washington must provide a list of drug manufacturers to the DOH (DOH will create a standardized form). Additionally, a retail pharmacy, private label distributor, or repackager must provide written notification to the DOH identifying the drug manufacturer from which the retail pharmacy, private label distributor, or repackager obtains a drug that it sells under its own label. The law provides that no later than 90-days following the effective date (i.e., July 7, 2018), companies must submit the list to the DOH.

What happens to county disposal ordinances? 

Depending on how soon regulations are developed, county programs may continue to operate an existing ordinance for 12 months after a state-approved program begins operating. At the end of the 12-month period, all existing and future local laws regarding drug take-back programs are preempted.

Penalties

As is perhaps expected, there are penalties that come with running afoul of the new law. Such penalties include:

  • An informal administrative conference
  • A restriction on ability to engage in certain activities; or
  • A civil fine of up to $2,000.00 per day.

Interestingly, one penalty excluded from the list of possibilities is that of the DOH prohibiting a manufacturer from selling a drug in or into the state of Washington.

March 20, 2018

Prime Therapeutics Proves PBMs’ Value

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On February 20, 2018, Prime Therapeutics issued a press release that highlighted the way it – as a leading pharmacy benefit manager – has helped save its clients billions of dollars. The 2017 drug trend reports noted that its clients saw overall expenditure reductions (per member, per month) across all three lines of business (commercial, Medicare, Medicaid) as compared to 2016. Additionally, corresponding annual savings delivered to clients in 2017 exceeded $3 billion across all three lines of business.

“Our outstanding 2017 drug trend results are hard won, especially as we continue to see ongoing and significant price increases for medicines in some of the most expensive disease categories,” said Jim DuCharme, Prime’s president and CEO. “These outcomes require many dedicated employees working tirelessly on behalf of our clients and their members to deliver optimal care and prescription drugs at the lowest net cost. Our close alignment with 22 Blue plan clients – 18 of whom are owners – allows us to see the complete pharmacy and medical drug picture to help us drive total cost of care outcomes.”

While specialty medicines continue to exert upward pressure across commercial and Medicare part D clients, Prime was able to offset those spending pressures by delivering substantial savings in other areas, including:

  • Negotiated discounts – In 2017, Prime secured substantial discounts including competitive rebates and more than $1 billion from pharmacy MAC pricing, illustrating the important role generics play in controlling drug costs. Client adoption of Walgreens-anchored networks also exerted downward pressure on trend. Incremental negotiated savings exceeded $1.9 billion.
  • Utilization management – Prime’s efforts to promote appropriate use of medicines approached $2.3 billion in total savings across all three lines of business.
  • Pain medication management – Prime is particularly proud of our efforts in managing controlled substances such as opioids. Not only has Prime decreased pain medicine expenditures across all three lines of business (-14.6 percent in commercial, -12.2 percent in Medicare and -9.8 percent in Medicaid), but these results build on Prime’s controlled substance successes over the past five years. These successes include decreasing by 71 percent the number of commercial members who were at high-risk for misuse* and reducing their health care costs by $1,500 PMPY.  

“While we’re thrilled drug expenditures for our clients declined in 2017, this doesn’t mean drug costs no longer present a challenge,” said David Lassen, chief clinical officer at Prime. “Low trend is not synonymous with low cost. Prescription drugs still represent 20 to 30 percent of costs for our health plans and employers. And out of the 46 drugs the FDA approved in 2017, eight of them drove commercial trend by about 1 percent, at an average price tag of $96,000 annually.”

“PBMs play a crucial role in counterbalancing upward forces in drug spending,” DuCharme concluded. “Without our active and assertive efforts to help drive clinically appropriate use and lowest net cost, spending on prescription drugs would be much higher. We’re proud to stand alongside our clients in this important work, helping people get the medicine they need to feel better and live well.”

March 02, 2018

CMS Releases Data on Antipsychotic Drugs Used in Nursing Homes

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According to data from CMS, the percentage of long-term nursing home residents being given antipsychotic drugs dropped from about 24 percent in late 2011 to under 16 percent last year. CMS says the data show its National Partnership to Improve Dementia Care in Nursing Homes, created in 2012, has served its goal to reduce unnecessary antipsychotic medications in nursing homes.

The Partnership

CMS explains its National Partnership utilized a multidimensional approach which included public reporting, partnerships and state-based coalitions, research, training for providers and surveyors, and revised surveyor guidance to empower and build upon the efforts of organizations across the country. The initial focus of the partnership was on reducing antipsychotic medications. However, it eventually grew into a larger mission of enhancing the use of non-pharmacologic approaches and person-centered dementia care practices.The National Partnership to Improve Dementia Care announced that it met its goal of reducing the national prevalence of antipsychotic use in long-stay nursing home residents by 30 percent by the end of 2016. It also announced a new goal of a 15 percent reduction by the end of 2019 for long-stay residents in those homes with currently limited reduction rates.

Data Trends

CMS reports that between the end of 2011 and the end of quarter one of 2017, the national prevalence of antipsychotic use in long-stay nursing home residents was reduced by 34.1 percent, decreasing from 23.9 percent to 15.7 percent nationwide. All 50 states showed improvement. Some states showed much more improvement than others. The states that have reduced their rate by the most percentage include the District of Columbia (47.8 percent), Tennessee (43.5 percent), California (43 percent), and Arkansas (41.6 percent).

Reaction

As reported, there was mixed reaction to the news from CMS. Dr. Jerry Gurwitz, chief of geriatric medicine at the University of Massachusetts Medical School, is quoted as describing the decrease as “one of the most dramatic changes I’ve seen in my career.” Gurwitz suggests that some nursing homes might be finding other medications that sedate their patients into passivity without drawing the same level of scrutiny as antipsychotics.

Advocacy groups like the Washington-based Center for Medicare Advocacy and AARP Foundation Litigation say even the lower rate of antipsychotic usage is excessive, given federal warnings that elderly people with dementia face a higher risk of death when treated with such drugs.

“Given the dire consequences, it should be zero,” said attorney Kelly Bagby of the AARP foundation, which has engaged in several court cases challenging nursing home medication practices. Bagby contends that the drugs are frequently used for their sedative effect, not because they have any benefit to the recipients.

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