Public Health Service Breakout Session 1

CPE Information and Disclosures Public Health Service Breakout Session 1 LT Teisha Robertson and LT Emeka Egwim Centers for Medicare & Medicaid Services LCDR Ayana Rowley and LCDR Tina Smith Food and Drug Administration, Center for Drug Evaluation & Research LT Teisha A. Robertson, LT Emeka Egwim, LCDR Ayana Rowley and LCDR Tina Smith declare no conflicts of interest, real or apparent, and no financial interests in any company, product, or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria. The American Pharmacist Association is accredited by the Accreditation Council for Pharmacy Education as a provider of continuing pharmacy education. CPE Information Learning Objectives Target Audience: Pharmacists ACPE#: 0202-0000-15-188-L04-P Activity Type: Knowledge-based Describe the Part D formulary requirements and guidance for formulary submission. Explain the statutory requirements for manufacturers and states regarding the covered outpatient drugs, preferred drug lists and prior authorization processes. Discuss how pharmacists can minimize the risk to consumers of over-the-counter unsafe and ineffective drugs. Learning Objective Medicare Part D Formulary Review Describe Part D formulary requirements and guidance for formulary submission LT Teisha A. Robertson United States Public Health Service (USPHS) Centers for Medicare & Medicaid Services (CMS) Division of Formulary and Benefits Operations (DFBO) 1

Self-Assessment Question 1 Self-Assessment Question 2 Which of the following drugs are not covered by Medicare Part D A: Insulin B: Cancer medications C: Barbiturates and benzodiazepines D: Prescription vitamin and mineral products The requirement for inclusion of an RxCUI on the CMS Formulary Reference File (FRF) include the following? A: Available on the U.S. Market B: Included in RxNorm C: Flagged as active in NDC Databases D: All of the above Self-Assessment Question 3 True or False. There are two main stages in the Part D formulary review process. A: True B: False Part D Formulary Requirements: MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Section 1860D 11 (e )(2)(D)(i): Set forth requirements for approval of proposed plans and plan designs Gave CMS the responsibility to ensure beneficiaries receive clinically appropriate medications so that formularies are not discriminatory Part D Excluded Drug Categories Agents used for anorexia, weight loss, or weight gain Agents used to promote fertility Agents used for cosmetic purposes or hair growth Agents when used for symptomatic relief of cough and colds Prescription vitamin and mineral products, except prenatal vitamins and fluoride preparations Non-prescription drugs Agents used for sexual or erectile dysfunction Formulary Review: Approach Part D formularies are reviewed to Determine whether outliers are deemed potentially discriminatory and would impact beneficiary access Ensure inclusion of a broad distribution of therapeutic categories and classes Review process Utilize reasonable benchmarks and guidelines to check that drug lists are robust Review tiering and utilization management strategies Identify potential discrepancies Obtain reasonable clinical justification when outliers appear to create access problems 2

Formulary Reference File (FRF) Formulary Reference File (FRF) The FRF is a listing of drugs that Part D plan sponsors must utilize in the submission of part D formularies to CMS for review Each row of the file represents a single drug as identified by an RxNorm concept unique identifier (RxCUI) and related fields RxNorm is a normalized drug naming system that is produced by The National Library of Medicine (NLM) RxCUIs are used on the FRF to serve as a unique identifier which can represent multiple National Drug Codes (NDCs) for similar drug products with the same brand name, generic name, active ingredient, strength, dose form and route of administration Inclusion of RxCUI reflects CMS s current understanding that one or more drug products with NDCs can satisfy criteria to be considered a Part D drug FRF Inclusion Requirements The drug must be potentially coverable under Part D The drug must have at least one NDC with the following: Included in the FDA Comprehensive NDC SPL Data Elements File (NSDE) with a marketing category of ANDA, BLA, NDA, or NDA authorized generic Available on the U.S. Market Flagged as active in NDC Databases Included in RxNorm Covered by a Coverage Gap Discount Program Agreement for applicable drugs Formulary Review Process Formularies are submitted and reviewed via our Health Plan Management System (HPMS) review module The drug list, utilization management requirements, and tiering information are reviewed in 3 stages Part D sponsors with outliers can provide clinical justifications, revised submission, or both The final stage of the review involves addressing any unresolved issues, formulary negotiations, and conditional approvals Formulary Submission Format Formulary Review Process Part D sponsors upload a tab delimited.txt formulary file for review In addition to the RxCUI that will be covered, sponsors submit other information such as: Cost-share tier Quantity limitations, prior authorization, and step therapy requirements, if applicable Therapeutic category and class Stage 1 of the formulary review verifies that each formulary submitted contains: Drugs in the most commonly used drug classes by the Medicare population Drug categories and classes that cover all disease states All or substantially all drugs from the six classes of clinical concern Drugs or drug classes addressed and supported in widely accepted treatment guidelines 3

Formulary Review Process HPMS Formulary Review Tool Stage 2 of the formulary review consists of: Utilization Management Prior authorization Step therapy Quantity limits Formulary tiering Two drugs per each category and class Stage 3 of the formulary review consist of Resolution of remaining stage 1 and stage 2 formulary concerns Formulary review requirements are loaded into the review tool in advance of the formulary submission deadline For drug list review checks, the HPMS tool looks for the presence of RxCUIs that will satisfy specific requirements HPMS reports identify deficiencies across all submitted formularies HPMS Formulary Review Tool Key Points Part D sponsors are directed to either revise their formulary file to address the outlier or submit a clinical justification via HPMS All clinical justifications are reviewed by clinical pharmacists A formulary is approvable once all deficiencies are resolved Plans must cover a range of FDA approved brand and generic drugs The FRF is a listing of unique identifier codes (RxCUIs) that Part D sponsors must utilize in the submission of Part D formularies The drug list, associated utilization management requirements, and tiering information of the submitted formulary are reviewed in three stages A formulary is approvable once all outliers are resolved Question 1 Which of the following drugs are not covered by Medicare Part D A: Insulin B: Cancer medications C: Barbiturates and benzodiazepines D: Prescription vitamin and mineral products Question 2 The requirement for inclusion of an RxCUI on the CMS Formulary Reference File (FRF) include the following? A: Available on the U.S. Market B: Included in RxNorm C: Flagged as active in NDC Databases D: All of the above 4

Question 3 True or False. There are two main stages in the Part D formulary review process. A: True B: False Closing Remarks LT Teisha A. Robertson United States Public Health Service (USPHS) Centers for Medicare & Medicaid Services (CMS) Division of Formulary and Benefits Operations (DFBO) Teisha.robertson@cms.hhs.gov About Me LT in The United States Public Health Service Commissioned Corps Payment for Covered Outpatient Drugs in the Medicaid Drug Rebate Program LT Emeka Egwim PharmD, RPh United States Public Health Service Centers for Medicare & Medicaid Services CMS Division of Pharmacy CMS Medicaid Division of Pharmacy Baltimore, MD Areas of expertise include 340B Drug Pricing Program Medicaid State Plans Drug Pricing and Pharmacy Reimbursement Federal Upper Limits (FULs) National Average Drug Acquisition Costs (NADAC) Clinical (HCV, HIV, LARCs, Opioids, Specialty Drugs, etc.) Affiliations Howard University College of Pharmacy Adjunct Professor (Health Policy) Independent Community Pharmacist Grubbs Care Pharmacy - Washington, DC American Pharmacists Association (APhA) Member Pharmacy Today (APhA) Contributing Writer National Pharmacists Association (NPhA) Member Kappa Psi Pharmaceutical Fraternity Inc. Member Learning Objective Self-Assessment Question 1 Explain the statutory requirements for manufacturers and states regarding the covered outpatient drugs, preferred drug lists and prior authorization processes. What is the statutory basis of payment for covered outpatient drugs in Medicaid? A. Section 1903 of the Social Security Act B. Section 603 of the Veterans Health Care Act C. Section 1927 of the Social Security Act D. Section 340B of the Public Health Service Act 5

Self-Assessment Question 2 Self-Assessment Question 3 Which drugs are excludable from coverage or may be otherwise restricted by state Medicaid agencies? (Circle all that apply) A. Onabotulinumtoxin-A for wrinkles B. Sofosbuvir for the treatment of Hepatitis-C C. Follitropin alfa for fertility D. Tadalafil for the treatment of Benign Prostatic Hyperplasia E. Tadalafil for the treatment of erectile dysfunction F. Nicotine replacement drugs for tobacco cessation G. Onabotulinumtoxin-A for overactive bladder or migraine prophylaxis H. Sildenafil for treatment of erectile dysfunction Which drug reimbursement benchmark is fundamentally based on the average manufacturer prices of drugs? A. State Based Actual Acquisition Costs AAC B. State Maximum Allowable Costs SMAC C. The Federal Upper Limit FUL D. The National Average Drug Acquisition Costs NADAC E. The Usual and Customary charges Medicaid Medicaid Drug Rebate Program Medicaid is The largest source of funding for health-related services for persons of all ages whose income and resources are insufficient to pay for health care. Jointly funded by the states and Federal government Managed by the states, with each state determining beneficiary eligibility for its program. Statutorily authorized by Section 1927 of the Social Security Act (payment for covered outpatient drugs). Includes CMS, State Medicaid Agencies, and participating drug manufacturers. Helps offset Federal and state costs of most outpatient prescription drugs dispensed to Medicaid patients. Approximately 600 drug manufacturers participate. Medicaid Drug Rebate Program Medicaid Drug Rebate Program Requires drug manufacturers to Enter into, a national rebate agreement with the Federal Government (HHS) in exchange for state Medicaid coverage of most of the manufacturer s drugs. Pay rebates on those drugs for which payment was made under Medicaid state plans. Rebates paid by drug manufacturers quarterly to states are - Shared between the states and the Federal government Offset the cost of prescription drugs under the Medicaid Program Drug manufacturers are also required to enter into agreements with two other Federal programs in order to have their drugs covered under Medicaid and Medicare Part B: Section 340B Drug Pricing Program with the Health Resources and Services Administration (HRSA) Federal Supply Schedule with Veterans Affairs 6

Section 1927 of the Social Security Act Concerns Payment for Covered Outpatient Drugs (CODs) Generally, once a manufacturer signs a drug rebate agreement, all the manufacturer s drugs determined to be CODs as defined by 1927(k) of the Act must be covered by the states However, there are permissible restrictions or limitations on state coverage of drugs Limitations of Drug Coverage Permissible restrictions State may subject any COD (usually those not on Preferred Drug Lists PDLs) to Prior Authorization Medically accepted indication 24 hour response 72-hour supply in emergency situations States may exclude or otherwise restrict coverage of a COD if the drug Is not prescribed for a medically accepted indication Is contained on the list of excludable drugs or drug classes Limitations on Drug Coverage Medically Accepted Indication Drugs & Drug Classes that may be Excluded from Coverage or otherwise Restricted Anorexia, weight loss or weight gain Fertility Cosmetic purposes or hair growth Symptomatic relief of cough and colds None-Rx drugs except those for smoking cessation Rx vitamins and mineral products except prenatal vitamins and fluoride products Treatment of sexual or erectile dysfunction, unless such agents are used to treat another condition, for which the agents have been approved by the FDA Subsection (k)(6) of the Act defined the term Medically accepted indication such that all the following criteria must be met: Any use of a covered outpatient drug Approved by the FDA, or Its use is supported by the compendia below Peer-reviewed medical literature American hospital Formulary Service Drug information U.S. Pharmacopeia-Drug Information DRUGDEX Information System Pharmacy Reimbursement Two Federally produced benchmarks: The Federal Upper Limits (FULs) The National Average Drug Acquisition Costs (NADAC) Other Benchmarks State-Based Actual Acquisition Costs (AAC) State Maximum Allowable Costs (SMAC) Usual and Customary Charges Pharmacy Reimbursement Methodologies States usually reimburse by paying at the lowest rate when all the various reimbursement benchmarks in the state-specific reimbursement algorithms (including the FUL) are considered. 7

The Federal Upper Limit (FUL) The Federal Upper Limit is Statutorily required by Section 1927 of the SSA The maximum reimbursement limit on drugs (ingredients) costs by Medicaid Set for drugs for which the FDA has determined there are three or more therapeutically and pharmaceutically equivalent products. To be calculated as no less that 175 percent of the weighted average of the most recently reported average manufacturer prices (AMPs) for all therapeutically and pharmaceutically equivalent drug available to purchase to retail community pharmacies. Reimbursements are calculated in the aggregate. States may reimburse less for one drug, and pay more for others as long as in the aggregate, the FUL for all drugs is not exceeded. State - determined, and CMS approved, dispensing fees (reflective of pharmacy services related to dispensing the drug) are also added to this established drug reimbursement amount. National Average Drug Acquisition Costs (NADAC) NADAC is reflective of the average prices at which retail pharmacies purchase drugs Developed based on monthly surveys of acquisition costs on voluntarily submitted invoices from retail community pharmacies consistent with section 1927(k)(10) of the Social Security Act. Updated on a weekly basis to reflect compendia price changes and other factors including pharmacies contacting the NADAC contractor s help desk Adjusted when drug price changes have been substantiated Adjustments are reflected in the NADAC rate updates published on a weekly basis. Published on Medicaid.gov Medicaid State Plans Agreement between a state and the Federal government describing how that state administers its Medicaid and CHIP programs. Assures states will abide by Federal rules and may claim Federal matching funds for its program activities. The state plan sets out Groups of individuals to be covered Services to be provided Methodologies for providers to be reimbursed, etc. Why are Medicaid State Plan Amendments Needed? A state must submit a SPA to CMS for review and approval (or denial) when it is planning to make a change to its program policies or operational approach including its reimbursement methodology or excludable drug coverage. States also submit SPAs to request permissible program changes, make corrections, or update their Medicaid or CHIP state plan with new information. Key Points All drugs that meet the definition of a covered outpatient drug (COD) must be covered by state Medicaid programs Some drugs are excludable or may be otherwise restricted Reimbursements for CODs by states must not exceed the FUL in the aggregate States must submit state plan amendments to CMS for review and approval (or denial) when they plan to make changes to their programs policies or operational approaches. Question 1 What is the statutory basis of payment for covered outpatient drugs in Medicaid? A. Section 1903 of the Social Security Act B. Section 603 of the Veterans Health Care Act C. Section 1927 of the Social Security Act D. Section 340B of the Public Health Service Act 8

Question 2 Which drugs are excludable from coverage or may be otherwise restricted by state Medicaid agencies? (Circle all that apply) A. Onabotulinumtoxin-A for wrinkles B. Sofosbuvir for the treatment of Hepatitis-C C. Follitropin alfa for fertility D. Tadalafil for the treatment of Benign Prostatic Hyperplasia E. Tadalafil for the treatment of erectile dysfunction F. Nicotine replacement drugs for tobacco cessation G. Onabotulinumtoxin-A for overactive bladder or migraine prophylaxis H. Sildenafil for treatment of erectile dysfunction Question 3 Which drug reimbursement benchmark is fundamentally based on the average manufacturer prices of drugs? A. State-Based Actual Acquisition Costs AAC B. State Maximum Allowable Costs SMAC C. The Federal Upper Limit FUL D. The National Average Drug Acquisition Costs NADAC E. The Usual and Customary charges The World of Over-the-Counter (OTC) Drugs Marketed Without FDA Approval LT Emeka Egwim PharmD, RPh United States Public Health Service Centers for Medicare and Medicaid Services Emeka.egwim@cms.hhs.gov 410-786-1092 LCDRs Ayana Rowley and Tina Smith Food and Drug Administration - Center for Drug Evaluation and Research Office of Compliance - Office of Unapproved Drugs and Labeling Compliance OTC Drugs Branch Learning Objective Self-Assessment Question 1 Discuss how pharmacists can minimize the risk to consumers of over-the-counter unsafe and ineffective drugs. What are the two regulatory pathways of an OTC Drug? Option A: OTC Drug Review and NDA Option B: NDA and ANDA Option C: OTC Drug Review and ANDA Option D: OTC Drug Review and NDA/ANDA 9

Self-Assessment Question 2 Self-Assessment Question 3 How Does FDA achieve compliance of Unapproved New OTC Drugs? What Can You Do to Help Protect Consumers from Unapproved New OTC Drugs? Option A: Send letters to healthcare professionals Option B: Ask JFPS to take action Option C: Enforcement action, industry outreach and consumer education Option D: Call the local news station Option A: I can t help protect my patients Option B: Recommend patients to only take prescription drugs Option C: Report violative products and keep current on FDA drug communications Option D: Throw the drugs in the trash OTC Drugs Branch Public Health Impact What is an OTC Drug Product? Office of Unapproved Drugs and Labeling Compliance Mission To promote and protect public health through science driven, comprehensive, strategies and actions that communicate potential risks about drug products and minimize exposure to unsafe, ineffective, or poor quality unapproved or misbranded drugs Monitor the market through the timely and efficient removal of violative OTC drug products Strive to minimize risk to consumers from OTC drug products that are not generally recognized as safe and effective A drug that can be adequately labeled such that The consumer can self-diagnose, self-treat, and selfmanage the condition being treated Healthcare practitioner is not required for the safe and effective use of the product A drug has low potential for misuse and abuse A drug with a safety margin is such that the benefits of OTC availability outweigh the risks Fun Fact: OTC drug products are marketed under two primary regulatory pathways OTC Drugs Regulatory Pathways OTC NDA/ANDA or Monograph? FDA Approved Application Product-specific (including formulation) Clinical development required Comply with good manufacturing practices Pre-market control Approved Drugs GRAS/E Monograph Process Also known as the OTC Drug Review Ingredient- and category-specific No clinical development Comply with good manufacturing practices Little pre-market control Not FDA Reviewed Drugs GRAS/E 61 10

Key Responsibilities: The OTC Universe OTC Monograph Products FDA-Approved OTC Products (ex. NDA) Unapproved New OTC Drugs Products marketed with drug intended uses that may be positioned as devices, cosmetics, tobacco products, etc. DID YOU KNOW?: Over 240 million US consumers were estimated to use OTC drug products, spending $23 billion on OTC drug products in 2010 62 Unapproved New OTC Drugs What are New Drugs? A new drug is not generally recognized as safe and effective (GRAS/E) for use under the condition prescribed, recommended, or suggested in the labeling Any new drug requires FDA approval What are Unapproved New OTC Drugs? OTC Drugs that do not have an FDA approved application or are not marketed in accordance with the applicable OTC Monograph Remember: an OTC Drug marketed under an OTC Monograph is not reviewed but GRAS/E if it meets the conditions of the monograph How Does FDA Learn About Unapproved New OTC Drugs? Generally unless the product is being brought to market under an application, FDA will likely only learn about an Unapproved New OTC Drug post-marketing through: District inspections Trade Complaints Adverse Events and Consumer Complaints Surveillance edrls DailyMed (http://dailymed.nlm.nih.gov/dailymed/) Other Databases Achieving Compliance (Part 1) Enforcement Action Notification of Violations (ex. Warning Letter) Judicial Actions (ex. Injunction) Administrative Actions (ex. recalls) Industry Outreach CDERLearn Course: Bringing an Over-the- Counter (OTC) Drug to Market (http://www.accessdata.fda.gov/scripts/cder/t raining/otc/index.htm) Achieving Compliance (Part 2) How Can YOU Assist Guidance and other policy documents Organ Specific Warnings: Labeling for Products That Contain Acetaminophen Guidance Consumer/ Healthcare Professional Education Drug Safety Communication FDA Consumer Updates Social Media Increase awareness and understanding about Unapproved New OTC Drugs Inform us of potential violative products (both monograph and NDA) druginfo@fda.hhs.gov Keep in the loop on upcoming rulemakings, safety alerts, and other potential issues. http://www.fda.gov/drugs/default.htm Pharmacy business and management operations (formulary decisions) 11

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We are here to serve YOU! Question 1 CHPA Health Canada TGA DOJ External Stakeholders FTC U.S. Consumers Health Care Professionals Healthcare (Pharmacist) Professionals Manufactures ORA OCOMM DDI Internal Stakeholders CDRH OCC OMPQ ODSIR CFSAN OND ODEIV DNDP ORP CTP What are the two regulatory pathways of an OTC Drug? Option A: OTC Drug Review and NDA Option B: NDA and ANDA Option C: OTC Drug Review and ANDA Option D: OTC Drug Review and NDA/ANDA 68 Question 2 How Does FDA achieve compliance of Unapproved New OTC Drugs? Question 3 What Can You Do to Help Protect Consumers from Unapproved New OTC Drugs? Option A: Send letters to healthcare professionals Option B: Ask JFPS to take action Option C: Enforcement action, industry outreach and consumer education Option D: Call the local news station Option A: I can t help protect my patients Option B: Recommend patients to only take prescription drugs Option C: Report violative products and keep current on FDA drug communications Option D: Throw the drugs in the trash Closing Remarks LCDRs Ayana Rowley and Tina Smith U.S. Food and Drug Administration Office of Compliance OTC Drugs Branch Contact Us: ayana.rowley@fda.hhs.gov and tina.smith1@fda.hhs.gov 12