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Senate
and House Support for Importation Growing
Although
activity around prescription drug importation diminished
immediately after the creation of the new Medicare
prescription drug benefit; recent events signal that
importation is again a hot topic on Congress' agenda.
On July 11 th , the Senate voted to amend the 2007
Homeland Security Appropriations bill (H.R. 5441)
to prohibit the U.S. Customs and Border Protection
from preventing any individual from importing an FDA-approved
prescription drug from Canada . While limiting importation
to FDA-approved drug products may appear safe, in
reality rarely are drugs outside of the U.S. , including
Canada , FDA-approved.
This
Senate action follows the adoption of similar legislation
by the House in two separate House appropriations
bills. The 2007 Agriculture Appropriations Bill (HR
5384) would prevent the FDA from using funds to prevent
importation; and the House version of the 2007 Homeland
Security Appropriations bill (H.R. 5441) includes
a Customs prohibition similar to that passed by the
Senate. In past years, language prohibiting the FDA
from using its funds to prevent importation has been
added to the Agriculture bill in one chamber and dropped
in the conference committee process. But with the
Customs language included in both the House and Senate
versions of the Homeland Security appropriations legislation,
there is a much greater chance of the provisions making
it through the conference committee process and to
the President's desk for him to sign into law.
Congressional
Defense Bills Compromise Patient Choice of Pharmacist
The
House and Senate have passed their versions of legislation
to authorize Fiscal Year 2007 appropriations for the
Department of Defense (DOD). Because the two proposals
differ, a conference committee has been appointed
to negotiate the differences between the two bills.
The conference committee report will go back to the
House and Senate for a final vote before it is sent
to the President for his signature. Both proposals
include several items critical to pharmacists and
require action.
The
Senate bill contains both good and bad provisions.
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A good provision: Section 721 of the Senate bill (S.
2766) clarifies that the DOD may negotiate discounted
federal pricing for prescriptions dispensed to TRICARE
(the military's health care program) beneficiaries
at pharmacies in the DOD's community pharmacy network.
The DOD negotiates lower prices for medications dispensed
at military treatment facilities (MTFs) and through
the DOD's mail-service program.
•
A bad provision: Section 702 of the Senate bill requires
all TRICARE beneficiaries to obtain refills of maintenance
medications through their mail-service program and
waives co-payments for certain medications that are
obtained through the mail-service program. These provisions
would prohibit patients from using their pharmacist
and pharmacy of choice for maintenance medications
and create coercive financial incentives to use one
pharmacy provider over another.
The
House bill contains a ‘bad' provision: Section 731
of the House bill (H.R. 5122) increases co-payments
for prescriptions obtained through the community pharmacy
network but waives co-payments for prescriptions obtained
through the mail-service program. This provision would
create coercive financial incentives to use one pharmacy
over another, compromising the patient's freedom of
choice.
One
of the reasons the DOD is seeking this change is that
the DOD currently receives rebates from manufacturers
for prescription medications dispensed at MTFs and
through the mail-service program. Not providing these
same rebates for prescription drugs dispensed at pharmacies
in the DOD's retail pharmacy network creates an economic
disincentive to have patients obtain their pharmacy
services through these community pharmacies.
DOD
believes existing law gives it the authority to negotiate
with manufacturers for discounts for drugs dispensed
at pharmacies in their retail network. However, most
prescription drug manufacturers disagree and have
filed a lawsuit against the DOD. Currently, the TRICARE
retail pharmacy program is the only federal government
program that does not receive rebates from manufacturers.
Retaining Section 721 of the Senate bill, which clarifies
that discounts may be negotiated for prescriptions
dispensed through the DOD's retail pharmacy network,
will remove the need to force or coerce patients to
receive their pharmacy services through the DOD's
mail-service program.
Update
on Federal 340B Legislation
The
June/August Policy Update contained a thorough analysis
and discussion of legislation pending in Congress
( S.
4 and HR
3547 ) that would make several changes to the
340B program. There has been no progress on those
particular bills at this time. S.
4 , a comprehensive healthcare bill introduced
by Senate Majority Leader Bill Frist (R-TN) contains
provisions that would impact 340B. Under the legislation,
Disproportionate Share Hospitals (DSHs) would be allowed
to purchase covered outpatient drugs through a group
purchasing organization (GPO). Additionally, S.
4 would permit a covered entity to use multiple
contract pharmacies. HR
3547 would extend 340B pricing to DSH inpatients,
and would allow Critical Access Hospitals (CAHs) to
use 340B pricing. However, the Congressional schedule
has been filled with Medicaid reform, relief for hurricane
victims, United States Supreme Court nominations,
and the consideration of the budget bills for Fiscal
Year 2006. Consequently, there has bee no movement
on either of these bills.
However, on October 6, Senators
John Thune (R-SD) and Jeff Bingaman (D-NM) introduced
S.
1840 a companion bill to HR 3547. S.
1840 would also permit the extension of the 340B
program to include inpatient drug purchases of DSH
hospitals and would include CAHs as “covered entities”
under the law. The bill was referred to the Committee
on Finance, which has also jurisdiction over Medicaid
and Medicare . There was some hope that the provisions
340B extensions would be incorporated into the Senate's
Medicaid reform package, but that has not happened.
Office
of Inspector General Releases Two 340B-related Reports;
Withdraws One
Two
recent reports from the Department of Health and Human
Services Office of Inspector General (OIG) focused
on the administration of the 340B Drug Discount Program
and prices paid by covered entities for drugs.
"Appropriateness
of 340B Drug Prices" (OEI-05-02-00070) June 2004
On October 21, the Office of Inspector General withdrew
report OEI-05-02-00070 entitled "Appropriateness of
340B Drug Prices," dated June 2004. The OIG
withdrew the report because of problems with the underlying
data used in developing the report's findings.
The OIG has issued a memorandum to the Administrators
of the Centers for Medicare & Medicaid Services
and Health Resources and Services Administration announcing
the withdrawal of the report and OIG plans for additional
work related to the 340B program. To
view the memorandum, please click here.
“Deficiencies
in the 340B Drug Discount Program's Database”
Focuses
on the integrity of the Office of Pharmacy Affairs
340B participant database and points out several
areas for improvement. These areas include: incorrect
participation information in the database, incorrect
address information for covered entities and missing
information on billing and shipping. OIG recommended
that HRSA conduct a revalidation of information currently
residing in the database, issue annual recertification
for covered entities, develop a separate listing of
newly added or deleted entities, develop a standard
reporting format for entity addresses and add an additional
field to designate entities with contracted pharmacy
management. The OIG also encouraged HRSA to “optimize
its Pharmacy Services Support Center contract as a
means to move toward complete action.” To
access this report, please click here.
340B
Program Revision and Expansion Act of 2004
H.R. 4161 was introduced on April 2 and referred
to the House Committee on Energy and Commerce. The
bill is titled the "340B Program Revision and
Expansion Act of 2004." Rep. Bobby Rush of Illinois
sponsored the bill. The bill expands the definition
of "covered entity," extends 340B pricing
to inpatient drugs, eliminates the group purchasing
prohibition for certain hospitals, and permits the
use of multiple contract pharmacies.
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