Legislative and Regulatory Update: DC Perspective Montana Pharmacy Association Winter CE & Ski Big Sky, MT • Jan

1. Legislative and Regulatory Update: DC Perspective Montana Pharmacy Association Winter CE & Ski Big Sky, MT • January 11, 2013 Marcie Bough, PharmD Senior Director, Government Affairs American Pharmacists Association

2. Learning Objectives Professional Resources & Business Development At the completion of this knowledge-based activity, pharmacists will be able to: • Describe new federal legislative activity that will impact the practice of pharmacy. • Describe new federal regulations that will affect the practice of pharmacy. • Highlight activities of the Center for Medicare and Medicaid Innovation.

3. American Pharmacists Association (APhA) • Largest and oldest national professional society for pharmacists • Represents over 62,000 pharmacists, student pharmacists, pharmaceutical scientists and pharmacy technicians • APhA members provide care in all practice settings, including: community pharmacies, hospitals, long-term care facilities, community health centers, managed care organizations, hospice settings and the uniformed services

4. Legislative Update

5. Overview • Election Impact • Federal Budget and Debt Debate • Congressional Activity • Senate Community Pharmacy Caucus • Prescription Drug User Fee Reauthorization Act (PDUFA) • Safe Doses Act • Medication Therapy Management (MTM) • Other Hot Topics

6. 2012 Election Impact • Pharmacy • Not much change but some losses/retirees • New members of key Senate and House Committees to be determined • Health care issues – the Affordable Care Act • Health care reform survived two near-death experiences • Supreme Court • Election • House Republicans may still try to repeal parts of the law but Senate Democrats would not let such bills go through Senate • By 2014 • States to implement insurance exchanges and need to discuss Medicaid expansions • Most people will have to be insured, subsidies should help

7. Federal Debt Debate

8. Federal Budget and Debt • “Fiscal Cliff” and debt ceiling discussions ongoing • Year-end budget deal delayed cut by 2 months • Sequestration and debt debate to be determined… • $1.2 trillion in defense and non-defense budget cuts if no fix • Potential cuts: Medicare providers $11 billion, NIH $2.5 billion, and FDA $320 million • Multiple bipartisan “debt commissions” discussed potential solutions in the past • Generally recommended combination of new revenues and spending cuts • Entitlement programs linked to debt discussion

9. Budget, Debt and Health Costs • Health care entitlement programs are a significant portion of the federal budget • In 2011 budget terms, generally 21% of budget is Medicare, Medicaid, and Children’s Health Insurance Program • Sustainable Growth Rate (SGR) – “Doc Fix” • Formula for Medicare payment to physicians • 2013 significant cuts delayed by 1 year in budget deal, still need to fix SGR • Expect an extension with the goal of more hearings and discussions on a new Medicare payment model • Overall Medicare payment reform discussions ongoing

10. Congressional Activity

11. U.S. Senate Community Pharmacy Caucus • Formed in 2011 • Caucus co-chairs, Senators Jon Tester (D-MT) and Jerry Moran (R-KS), held an educational briefing March 28, 2012 • “The Role of Pharmacists in Rural America” • MPA’s Eric Beyer presented • Focus: • Role of pharmacists on the health care team and in providing patient care • How pharmacists are key to proving accessible health care in rural communities • How pharmacists are utilizing technology, such as telepharmacy, to increase access to services

12. Prescription Drug User Fee Act (PDUFA) Reauthorization • Reauthorization required every 5 years of the Prescription Drug User Fee Act – PDUFA V • The Food and Drug Administration Safety and Innovation Act (FDASIA; P.L. 112-144) signed into law July 2012 • User fees from manufacturers provide resources for FDA’s drug review process, in addition to Congressional appropriations • PDUFA IV was included as part of the FDA Amendments Act of 2007 (FDAAA) • FDA held ongoing meetings with industry and stakeholders to gather input • FDA submitted proposal to Congress in January 2012 • Included FDA and manufacturer agreement

13. PDUFA Reauthorization Provisions • Law also includes manufacturer user fees for generics, biologics and medical devices • Law addresses: • General program improvements • Increased communication between FDA and manufactures during review process • Authorization to develop guidance on standards for interoperability of prescription drug monitoring programs • Authorization to study drug labeling by electronic means • Increased manufacturer-level track-and-trace provisions • Requirements related to drug shortages • Early notification by manufacturers to FDA of potential shortages • HHS-maintained public list of all drugs experiencing shortages

14. PDUFA Agreement • PDUFA agreement between FDA and manufacturers outlines how user fees are intended to be spent, including: • Improvements to risk evaluation and mitigation strategies (REMS) • Improved programs for post-market surveillance and adverse event tracking (Sentinel Initiative) • Enhanced management of biomarker and pharmacogenomicdetails • Improvements to REMS reflects APhA’s advocacy efforts

15. PDUFA and REMS Improvements • REMS improvements include: • Earlier dialogue about REMS in drug review process • Improved standardization and integration into existing and evolving medical and pharmacy practice technologies and workflows • Examples: Use of electronic health records, pharmacy operating systems, etc. • Continued strategy/timeframe for FDA to gather public inputand host stakeholder meetings • Develop guidance on: • Assessing REMS effectiveness, impact on patient access, and burden on the health care system • Applying statutory criteria for when a REMS is required

16. PDUFA Related Dialogue • Remaining PDUFA provisions not included in final law that continue to have Congressional discussion • Track and trace requirements to pharmacy and patient level (pedigree) • Addressing prescription drug abuse/diversion through reclassification of hydrocodone from Schedule III to II • FDA Advisory Committee hearing on January 24-25, 2013 to discuss rescheduling of hydrocodone containing products • APhA on health professionals panel to present pharmacy issues for Committee members to consider related to impact, logistics, state issues, and pharmacists role in working with pain patients • FDA will consider recommendation from the Committee; FDA to make final recommendation to DEA

17. Safe Doses Act • The Safe Doses Act became law in October (P.L. 112-186) • Provisions include: • Fight medical theft and distinguish from theft of other products • Increases medical theft sentences and penalties • Protect patients from receiving stolen and mishandled medical products resold in marketplace (often gray- or black-market channels) • Increases restitution to victims injured by stolen medical products • Provide resources/tools to law enforcement

18. Medication Therapy Management (MTM) Improvement Legislation • Bills introduced in Senate (S. 274) and House (H.R. 891) • Sen. Hagan (D-NC) bill in the Senate and Rep. McMorris-Rodgers (R-WA) bill in the House • Positioned as “common sense” reform with broad bipartisan support • Provisions: • Broadens Medicare Part D MTM eligibility • Requires MTM for Dual Eligibles • Appropriate reimbursement • Pay for performance incentives • Data collections and performance measures • Continue discussion with Congressional staff and pharmacy organizations • Consider revisions to bills if reintroduced in 2013

19. Compounding Activity • Ongoing investigation of fungal meningitis tragedy in October 2012 • Rep. Markey (D-MA) issued report October 2012 • Compounding Pharmacies Compounding Risk • Senate and House held hearings • Discussion focus on defining compounding versus manufacturing and regulatory authority between states and FDA • Senate Health, Education, Labor & Pension (HELP) Committee requested comments from stakeholders twice • Questions on compounding prior to hearing • Response to FDA’s testimony at hearing • In November, 11 pharmacy organizations released a joint statement in support of compounding

20. Compounding Continued… • Legislation introduced • Verifying Authority and Legality in Drug Compounding (VALID) Act of 2012 (H.R. 6584) by Rep. Markey (D-MA) • Support Access to Formulated and Effective (SAFE) Compounded Drugs Act of 2012 (H.R. 6638) by Rep. DeLauro (D-CT) • HELP Committee and House Energy & Commerce Committee staff are meeting with stakeholders, including pharmacy • FDA held stakeholder meetings with pharmacy and others in December • FDA held public hearing with the states on December 19 • Expect continued activity and focus on compounding regulations and better defining compounding versus manufacturing • FDA continues to support traditional compounding and is seeking to better regulate manufacturing

21. Other Legislative Hot Topics • Including pharmacists in Congressional discussions on Medicare provider payment reform and evolving payment models • Moving away from fee-for-service and toward pay-for-performance (quality and outcomes) • Payment models for integrated care and risk sharing models • Pursuing and obtaining Medicare Part B provider status for pharmacists • Pharmacy organization discussions and initiatives • APhA, ASHP, ACCP, NCPA, and others • Pharmacy Stakeholders group (14 national organizations)

22. Regulatory Update

23. Overview • Center for Medicare and Medicaid Services (CMS) • Health care reform implementation, state focus areas, Medicare Part D, other hot topics • White House Office of National Drug Control Policy (ONDCP) • Drug abuse/diversion policy • Food and Drug Administration (FDA) • Risk evaluation and mitigation strategies (REMS), potential revisions to the drug paradigm, other hot topics • Drug Enforcement Administration (DEA) • Disposal and enforcement issues • Public Health Service (PHS) • Report to Surgeon General

24. Centers for Medicare and Medicaid Services (CMS)

25. CMS: Health Care Reform Implementation

26. Health Care Reform Implementation • The Affordable Care Act (ACA; P.L. 111-148) also referenced as health care reform • APhA’s Goals: • Influence stakeholders on role of pharmacists on the health care team • Advance the profession by making meaningful strides to scale-up patient care services • Explore all opportunities for pharmacists to be recognized, utilized and compensated • Utilize APhA’s MTM Resources • Continue to lead the Pharmacy Stakeholder group • Focus on CMS Innovation Center activities

27. CMS Innovation Center (CMMI) • CMMI is part of the Centers for Medicare and Medicaid Services (CMS) • Focusing in readmissions and transitions of care • Community Based Care Transitions Program • Tests models for improving care transitions from the hospital to other settings and reducing readmissions for high-risk Medicare beneficiaries • Partnership for Patients Initiative • Tests models for improving care transitions in order to reduce hospital readmissions • Formation of Affinity Groups focused on sharing successful program information, networking, and utilizing Hospital Engagement Networks (HENS) • Pharmacists playing a key role in Medication Affinity Group

28. Medication Reconciliation Resources • APhA and the American Society of Health-System Pharmacists (ASHP) collaborating to improve transitions of care resources • March 2012 White Paper available online • October 2012 survey of transitions of care announced 8 best practice profiles • Other submissions (nearly 80) will also be highlighted in future publication

29. CMMI Activities Continued… • Accountable Care Organization (ACO) Initiatives • Shared Savings Program, Pioneer ACOs, Advance Payment, Learning Sessions • Expect to see expansion of CMMI funded programs through initiative in 2013 • Million Hearts Initiative • Lead by Department of Health and Human Services (HHS) • Goal: Prevent 1 million heart attacks and strokes over the next five years

30. Accountable Care Organizations (ACOs) • November 2, 2011 CMS released final rule • Shared savings program payment model • Eligible programs continue to receive fee-for-service payment through Medicare Parts A & B • Also eligible for additional Medicare payments if meet specific quality and savings requirements (shared percentage of savings generated) on A & B but not D • Opportunities for pharmacists working in health-systems forming ACOs • Challenges remain with linking to community pharmacy

31. HCR Implementation and the States • Medicaid and Maintenance of Effort • On January 1, 2014, states will be required to provide Medicaid coverage to all individuals with income below 133% of the federal poverty level who are not eligible for Medicare • 16 Million new enrollees in 2014 • Opportunity for pharmacists to help care for new patients as part of the evolving health care model • Essential Health Benefits (EHB) • Health insurance exchanges (HIEs) • State Exchanges must implement a payment structure that provides incentives for medication and care compliance activities • Providing a meaningful set of benefits that are also affordable • CMS Released guidance notice of its plan to implement EHB that delegated EHB to States

32. EHB Continued… • Required categories to cover in states plans: • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment • Prescription drugs • Rehabilitative and habilitative services and devices; • Laboratory services • Preventive and wellness services and chronic disease management, and • Pediatric services, including oral and vision care • Work with states to see if benchmark plan covers pharmacists services • CMS working on more regulations

33. HCR Take Away Points • Pharmacy needs to be proactive and advocate for role in evolving health care system • The number of issues affecting the practice of pharmacy is increasing (HCR and other regulations) • HCR is an opportunity but implementation is key • Transitions of care and medication reconciliation are focus areas to pharmacists • Federal and state programs are targeted to find savings and improve care • Payment for services is moving away from fee for service: • Pay for performance • Risk sharing and shared savings in ACO’s or other integrated care models • Public/private payment models are being referenced

34. CMS: Medicare Part D

35. Medicare Part D • Medicare Part D MTM Improvements • Effective 2013 • Requires Part D plans to offer MTM services to targeted beneficiaries that include, at a minimum, services to improve adherence: • Annual comprehensive medication review (CMR), person-to-person or using telehealth technologies • Provided by licensed pharmacist or other qualified provider  • CMR to result in recommended medication action plan (MAP), written/printed summary, and personalized medication record

36. Medicare Part D • Part D MTM (continued) • PDP sponsor must have a process to • Assess, at least quarterly, the medication use of individuals who are at risk but not enrolled in the MTM program, including individuals who have experienced a transition in care • Automatically enroll targeted beneficiaries, including those identified a chronic care improvement program • Enrollment criteria for targeted beneficiaries • Review of outcome and quality measures: • Medication adherence, diabetes treatment, and high risk medication measures

37. Medicare Part D • Additional program revisions in 2013 • Improve transparency of preferred or non-preferred pharmacy networks • Short-cycle dispensing in long-term care facilities • 14 day or less dispensing with some drugs excluded • Aims to reduce waste • Effective 2013 • Continued concerns over costs related to implementation, dispensing fees, technology, delivery, etc. • CMS considering independence of consultant pharmacists working in long-term care facilities

38. Medicare Part D Communications • Standardized pharmacy notice of prescription coverage denial • Dispense written notice to beneficiary versus use of poster in pharmacy • Increasing MTM awareness • CMS included MTM reference in the 2012 and 2013 Medicare and You Handbook, CMS’ annual official guide to Medicare mailed to all beneficiaries and posted online • Reference to MTM also appears online in the Part D Section of the Medicare Web site www.Medicare.gov • Plan ratings to include MTM program information in 2014 • Additional information of interest on Medicare.gov • Ask Medicare initiative which provides information helpful to caregivers • Focus on access to local services and resources related to Medicare

39. Other CMS Hot Topics • Electronic health records • Stage 2 meaningful use criteria for incentive payments • Stage 3 meaningful use criteria being drafted • Pharmacy e-HIT Collaborative leads efforts to integrate pharmacy into EHRs • Durable medical equipment requirements • Fraud, waste and abuse • Audits • Immunizations

40. White House Office of National Drug Control Policy(ONDCP)

41. ONDCPFocus Areas • 2011 Prescription Drug Abuse Action Plan • Education of prescribers and patients • Tied to FDA Opioid REMS prescriber education • Support for required prescriber education for DEA registration • Prescription Drug Monitoring Programs (PDMPs) • Expand to all states, ensure interconnectivity between states • Medication disposal • Tied to DEA improving options for disposal of controlled substances (DEA regulations being drafted) • Enforcement • Focus on pill mills and doctor shopping • 2012 National Drug Control Strategy • Strengthens efforts to prevent drug abuse • Reinforces efforts on PDMPs and prescription return/take-back and disposal programs

42. Food and Drug Administration (FDA)

43. Risk Evaluation and Mitigation Strategies (REMS) • Why are REMS programs important? • REMS are intended to mitigate risks to improve patient safety • Example: iPLEDGE program for isotretinoin products • Allows access to drugs that would otherwise not be approved or remain on the market • FDA does not have the authority to regulate the practice of medicine or pharmacy but FDA’s decisions and actions impact these practices every day • Pharmacists and prescribers are responsible for implementing REMS in their practices • REMS could impact patient access • The number of REMS continues to increase • Opioid REMS has driven dialogue with FDA and other stakeholders and increased awareness • Approved REMS listed online at:www.FDA.gov

44. REMS: Beneficial Contribution to Prescription Drug Safety Continuum REMS Drugs that would not receive FDA approval or be allowed to remain on the market because therisk outweighs the benefit Approved drugs for which a REMS is unnecessary Average Risk of Drug Prescription drugs that would not be FDA approved or remain on the market without a REMS Source: APhA 2011 REMS White Paper

45. REMS: Effective Provider Interventions REMS Burden Too Excessive AverageBurdenofIntervention TargetREMSActivity Ideal REMS Activity Average Effectiveness of Intervention Source: APhA 2011 REMS White Paper

46. Ongoing REMS Activity • PDUFA V reauthorization includes improvements to REMS programs • Class-wide REMS continue to drive dialogue to improve standardization, integration and efficiency into workflow, and use of single-shared systems • Extended-Release and Long-Acting and Extended Release (ER/LA) Opioid products • Transmucosal Immediate-Release Fentanyl (TIRF) products • Education and CE credit part of ER/LA REMS • November 2011 final MedGuide/REMS guidance clarifies distribution and inclusion in REMS • White House efforts to address prescription drug abuse helping to drive REMS discussions

47. APhA’s REMS Resources

48. FDA: Nonprescription Safe Use Regulatory Expansion (NSURE) Initiative

49. FDA Nonprescription Safe Use Regulatory Expansion (NSURE) Initiative • February 2012 FDA announced it is considering ways to improve public health and patient access to certain medications • Potential revisions to the drug classification paradigm • Generally, FDA looking to make definitions of prescription and OTC less rigid so that certain nonprescription medications could be available through “conditions of safe use” • March 22-23, 2012 – FDA hosted public hearing • “Using Innovative Technologies and Other Conditions of Save Use to Expand Which Drug Products Can Be Considered Nonprescription” • FDA Web page: www.fda.gov/drugs/newsevents/ucm/289240

50. NSURE Initiative: Conditions of Safe Use • Conditions of safe use could include: • Intervention by a pharmacist or other health care provider • Use of innovative technologies prior to the purchase of the product • Potential label/approval as prescription and non-prescription with conditions of safe use in place • Process would be driven by a manufacturer’s interest in pursuing use of conditions of safe use • Manufacturer would submit application to FDA for review through FDA’s nonprescription regulatory pathway