Inflation Reduction Act, EOM, PBM Reform Remain Hot Topics on Capitol Hill

The message from Capitol Hill with the Inflation Reduction Act (IRA) is that they’ve got their pound of flesh from the pharma industry in their pursuit of negotiating drug pricing, explained Nick Ferreyros, managing director of policy, advocacy, and communications at the Community Oncology Alliance, during a panel discussion at the 2023 Advanced Topics for Oncology Pharmacy Professionals (ATOPP) Summit in New Orleans, Louisiana. Ferreyros explained further that, depending on how the implementation of the IRA goes, Congress is likely going to shift their attention to other topics they’d like to have an impact on, such as pharmacy benefit managers (PBMs).

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“I don’t know about y’all, but one of the things that keeps me up at night, as someone who has many years ahead of him getting into the cancer era, is the impact this will have on new drug development,” Ferreyros said during the panel. “Because the impact is going to [be in] the long-term in investment in drug development and discovery.”

Panelist Lalan Wilfong, MD, senior vice president of Payer and Care Transformation for The US Oncology Network, noted that this is a challenging topic because there are mixed responses to the IRA among the public, as well as within industry and pharmacy. Because cancer predominantly affects the elderly (age 65 and older) than other demographics, the high price of oral drugs result in significant financial toxicity and even bankruptcy.

“A lot of our seniors can’t afford these drugs,” Wilfong said. “I just had a patient in the past couple of weeks who told me they weren’t going to take a therapy because they didn’t want to spend the money. We all know the shenanigans that PBMs are doing that are cutting into patient assistance programs, but to seniors, [the IRA] capping out-of-pocket costs at $2000 is a pretty big deal, and they’re feeling pretty good about that.”

Additionally, Wilfong noted that employers are also responding positively to the changes enacted by the IRA.

“Employers are fed up with drug prices,” Wilfong said. “Employers are saying, ‘We like this. We want the drug prices to be lower.’ So, I think this is a challenge because most of the people in the United States outside of our industry think this is a huge win.”

However, Ferreyros noted that the IRA will have a significant impact on Medicare Part B add-on payments when negotiations actually begin in 2028. Although the negotiation phase will start in October 2023—at which point manufacturers will need to start disclosing details about pricing to the government to begin the process—the negotiation process won’t officially start until 5 years following this disclosure requirement.

Additionally, Wilfong explained that another hot topic on the Hill will continue to be the Enhancing Oncology Model (EOM). The Oncology Care Model (OCM) was the government’s alternative payment model for oncology from 2016 through 2021. It ran for 6 years, with approximately 180 practices in the model at the start and 120 at the end—some dropped out and others consolidated. According to Wilfong, there are a lot of reasons why those numbers changed over the years, but it was a fairly successful model overall, at least in the eyes of oncology stakeholders.

“Prior to the [OCM], we had a very loose coalition of how we managed our patients [with cancer], but post-OCM, it was much more formalized. And when I say ‘how we manage our cancer patients,’ it was whether you did patient education, prior to the OCM, that was kind of at the discretion of the physician and their team,” Wilfong said. “Post-OCM, we have a very formal way of talking to patients about their cancer diagnosis and their treatment options, reporting to the Institute of Medicine the care management plan and the different components of that around the patients’ diagnosis, their biomarkers, their prognosis, what treatment is expected, the side effects—so things like that.”

According to Wilfong, the OCM gave oncology professionals a much more prescriptive way of thinking about their patient population, pushing oncology professionals to consider their patients more holistically. Wilfong explained that with the advent of the OCM, he needed to start thinking differently about how his patients were doing while they were outside of his office and not just while they’re sitting in his office in front of him.

“You had to start thinking about that a lot more, and how you help meet your patients where they need to improve their outcomes. It really was a radical shift,” Wilfong said. “It was one of those things where, if you wanted to be a good physician, and that was important to you, then now you're required to do those things.”

Wilfong explained that a consensus across the oncology community was that post-OCM, there was a greater focus on patients more holistically than pre-OCM. However, the CMS found that the OCM was not a successful model because it didn't really improve quality of care and save costs in a general sense.

The EOM, which started July 1, is different from the OCM in that the latter was a broad model—it incorporated every patient with cancer that was on any sort of therapy for cancer. On the other hand, the EOM now only focuses on the 7 most common cancers—breast cancer, lung cancer, small intestine/colorectal cancer, lymphoma, chronic leukemia, multiple myeloma, and prostate cancer—in the 65 years of age and older population.

However, according to Wilfong, only 44 practices have signed up to participate in the EOM, which is significantly smaller than the number who had signed up for the OCM.

“The reasons why are multiple, but the big one is that it's a risk model from the get-go, meaning that as a practice participating in EOM, we are at risk for total cost of care. If we spend more than our target price, which is 2% less than benchmark, we have to pay back Medicare, and nobody likes to give the government more money,” Wilfong said. “There are some nuances to the model that make it more challenging to perform well, depending on practice dynamics and practice culture. The amount of care management money that we're getting is much less in the model, and there's some extra requirements around helping people with social determinants of health [SDOH] and electronic patient reported outcomes. So, it is a much more challenging model.”

For those practices with a culture focused on value-based care, the EOM may more easily fit into the objectives and strategies of that practice, according to Wilfong. Regardless, he noted that it will be interesting to see what happens with the EOM due to the challenges it presents for oncology practices.

Additionally, Ferreyros noted that most of the 44 practices participating in the EOM are larger multisite practices. This trend suggests that in order to participate in the EOM with a greater potential for success, a significant investment and team are necessary, which perhaps only larger practices are able to handle.

Wilfong responded, noting that in his experience with the OCM at his practice, the significant investment in technology alone for documentation purposes was challenging for practices.

“I've spent a year working with our team in adjusting our EMR to be able to just document SDOH,” Wilfong said. “There's a lot that goes into participation in these models.”

For those practices that did participate in the OCM, they've now done a lot of the work required to then reinvest in the EOM, according to Wilfong. However, of the 44, there were a couple that weren't participating in the OCM that joined the EOM.

“But I haven't seen the list yet and haven't actually done the comparison to see who of the 44 were in OCM versus not,” Wilfong said.

However, with only 44 practices participating in the EOM, Wilfong postulated that CMS will likely not be able to hit the mark of the statistical significance required to obtain sufficient statistical data to demonstrate a meaningful impact from the model.

“I think if you look at some of the other models, [CMS] had that had smaller participation, they had to change the model and encourage more participation, and then ultimately had to close the model,” Wilfong said.

Moving to the discussion of PBMs, Ferreyros asked Jonathan E. Levitt, Esq, to introduce himself.

“So, my name is John. I sue PBMs,” Levitt said.

As the room erupted in laughter and applause, he moved onto explain that he’s been suing PBMs for the past 2 or 3 years and developed a subspecialty in direct and indirect remuneration (DIR) fees. “I’m going to guess in this room, collectively you’ve paid probably $300, maybe $400 million in [direct and indirect remuneration (DIR)] fees.”

Specifically, PBMs do not make clear to practices the metrics by which they are judging their performance in areas such as adherence, according to Levitt.

“Do you know how PBMs are judging you on your adherence? The answer is no, no one does, because the contracts don't tell you,” he said. “We file these arbitrations, and we find out. When the PBM says, ‘We're not going to give you data, we're not going to tell you how we judge adherence,’ which is ridiculous, and an arbitrator says, ‘Okay, you have to give these data to the law firm.’ The first time we discovered how a PBM was actually judging adherence, we just couldn't believe it. And you won't believe it either. [However,] I've been told by this PBM that it's not public information, and if I disclose it, they will sue me; they said it's their secret sauce.”

Levitt explained further that DIR fees are only in the Medicare Part D program, and PBMs only charge DIR fees on Medicare Part D claims. One PBM makes their reimbursement rate contingent on performance, which is based on medication adherence.

“So the worse your score, the higher your DIR fee,” Levitt said.

Additionally, these scores do not necessarily take into account a patient’s need to discontinue a medication based on the presentation of toxicity while on the treatment. For such cases, the rate can simply show a low score for adherence rather than acknowledging the need for discontinuation.

“I'm here to tell you that under Medicare, there's a federal law that applies to this, it's called the Any Willing Provider law, and it's very, very simple—it's much more simple than cancer care. It says the terms and conditions in the Medicare part D program have to be reasonable and relevant,” Levitt said.

Levitt explained that when suing PBMs, their goal is to assess whether a fee is reasonable and relevant, as required by federal law.

“And PBMs, they say, ‘That law doesn't apply to us.’ I can tell you, in my job, I get to look at contracts between these big prescription drug plans and CMS, and it says, ‘This law applies.’ It refers to the Any Willing Provider law,” Levitt said. “You all have rights here, in this room, and you're all overpaying on DIR fees, and you have the right to challenge it. We've had a lot of success in these cases. We've collected $100 million for oncology hospitals and oncology practices.”

Reference

Ferreyros N, Wilfong L, Levitt J. General Session: Hot Topics on The Hill. 2023 ATOPP Summit in New Orleans, LA; July 13, 2023.