J&J must pay $8B in Risperdal case, jury says

Johnson & Johnson (NYSE:JNJ) -1.9% after-hours following a Philadelphia jury ruling that it must pay $8B billion in punitive damages to a man who previously won $680K over his claims that it failed to warn that men using its Risperdal anti-psychotic drug could grow breasts.

The Philadelphia verdict is the first case in which a Pennsylvania jury was able to consider awarding punitive damages in one of thousands of Risperdal cases pending in the state.

https://seekingalpha.com/news/3504615-j-and-j-must-pay-8b-risperdal-case-jury-says

Why drug prior authorization has made more progress toward automation

The healthcare industry has made quicker progress in automating prior authorization for prescription drugs than it has for medical services. That’s in large part because most electronic pharmacy prior authorizations are enabled by a transaction standard that works.
Officials for the National Council for Prescription Drug Programs realized in the early 2000s that the standard for electronic prior authorization that is mandated by the Health Insurance Portability and Accountability Act of 1996 didn’t adequately support pharmacy operations.

So it convened stakeholders to develop what is called the “Script” standard, which allows physicians to communicate certain information necessary to the authorization process that the HIPAA-mandated X12 278 regulation did not. Now 70% of pharmacy benefit managers have implemented the Script standard, despite HIPAA being the law of the land, according to Margaret Weiker, the National Council’s director of standards development.

HIPAA is still a hurdle to getting full adoption, she said. But a CMS proposal to require all Medicare Part D plans to use the Script standard for electronic prior authorization beginning in 2021 will help boost uptake, she said.

The Script standard supported Express Scripts in reaching the point where 55% to 60% of all of its prior authorizations are electronic, said Lynne Nowak, the PBM’s leader of the provider services group. But the process still sometimes requires physicians to answer questions to justify the prescription.
The ultimate goal, which Express Scripts is working toward, is to use its own data and connections into a physician’s electronic health record to extract information needed for prior authorization without ever having to bother the physician, Nowak said.
The company is also helping physicians avoid the need to jump through the prior authorization hoops by giving them more clarity about which drugs require pre-approval. Its real-time benefit tool tells the physician whether a drug is covered under the patient’s benefits, how much it costs, and if it requires authorization.
Physicians opt for a different drug that doesn’t require prior authorization about 40% of the time and avoid the hassle altogether, Nowak said. It took a huge investment to put the clinical criteria into an electronic format, and the standards helped enable that. “The lack of standards on the medical side make it a lot harder,” she said.
Electronic prior authorization for medical services is still done using the 278 standard, which experts say doesn’t meet the industry’s needs.
Kim Diehl-Boyd, senior director of industry relations and government affairs at CoverMyMeds, a software company that helps automate prior authorization, said innovations on the medical side of the industry, including industry experiments with FHIR standards, could help bring more efficiency on the pharmacy side as well.
That’s why while CoverMyMeds supports the National Council for Prescription Drug Programs’ Script standard, its executives worry that the CMS’ proposal to require all electronic prior authorizations to use that standard would limit future innovation.
“There’s the potential that you do lock the industry into using only one methodology,” Diehl-Boyd said. “Let’s say in five years there’s another methodology that works even better, but you’ve got regulation that calls for one standard. That can be problematic.”
https://www.modernhealthcare.com/insurance/why-drug-prior-authorization-has-made-more-progress-toward-automation

Medicaid mystery: Illinois sends lots of people to lowest-rated managed care plan

NextLevel Health gets 35 percent of new Medicaid enrollees despite poor quality grades and high rates of defection among its current members. Why?

Illinois is funneling more people into the Medicaid managed care plan with the highest turnover and lowest scores on state quality measures.

The Illinois Department of Healthcare & Family Services sends 35 percent of new Medicaid enrollees who didn’t request a particular plan to NextLevel Health. That ties CountyCare for the highest percentage assigned to any of the state’s Medicaid managed care providers.
NextLevel gets all those new customers despite poor quality grades and high rates of defection among its current members. The plan finished last in the state’s latest quality survey, which rated NextLevel “low” or “lowest” in five of six performance metrics. Meanwhile, NextLevel lost customers at twice the rate that patients left the program overall.

NextLevel is run by Dr. Cheryl Whitaker, a longtime health care executive whose husband, Dr. Eric Whitaker, is known for his friendship with former President Barack Obama. With 51,000 members and 2 percent of the market, it’s one of six private health insurers awarded state contracts to administer Medicaid benefits under a managed care program intended to improve care and save money. It’s one of two plans available only in Cook County.

Both Whitakers declined interview requests. HFS Director Theresa Eagleson says assigning large numbers of enrollees to NextLevel advances the administration’s goal of supporting minority-owned businesses that “reflect the diversity of our Medicaid membership,” adding, “We were trying to, because they got a late start, help make sure they had the ability to be successful.”

Medicaid beneficiaries in Illinois have 30 days to choose a plan. Those who don’t—about half—are automatically assigned to an insurer by the state using an algorithm that considers where enrollees live, if their primary care doctor is in network, whether family members are already assigned to a plan, and how much the state pays each plan to cover patients. Illinois’ auto-assignment algorithm doesn’t take insurers’ quality ratings into account.

Auto-assignments offer health plans a significant financial advantage, says Sara Rosenbaum, a health policy expert at George Washington University.
“Auto-assignment is very powerful. . . .It’s a huge cash infusion,” Rosenbaum says. “Especially because auto-assigned people tend to use less care.” A state might choose to send more enrollees to a newer plan that needs help getting off the ground, she adds, especially if that plan is serving a geographic area that doesn’t have enough capacity.
Eagleson’s agency revamped the auto-assignment algorithm in July, boosting NextLevel’s share of auto-assigned members to 35 percent from 22.5 percent in April and 12 percent before that. As NextLevel’s auto-assignments were increasing, only 3.3 percent of its new enrollees in July had specifically requested the plan. By comparison, 43.6 percent of July enrollees at CountyCare, the other provider confined to Cook County, requested that plan. CountyCare is run by public hospital network Cook County Health.
ENROLLMENT DOWN

Despite the boost in auto-assignments, NextLevel’s enrollment is down 11 percent from a year ago, while overall enrollment in Medicaid managed care is down just 4 percent.
Members sometimes leave a health plan if they’re unable to find a doctor in the insurer’s network, which means NextLevel’s turnover may be a function of the size of its network of primary care doctors. Eagleson says Medicaid application and renewal process delays could also be to blame, noting the state is hiring hundreds of front-line workers to address such issues.

While states need to consider which plans have the capacity to take on new members, they should also be factoring quality, access to care and consumer satisfaction into auto-assignment algorithms, Rosenbaum says. Quality measures are emphasized by “a fair number of states because everybody understands this is worth a lot of money” to insurers.
CHANGE PLANNED
Eagleson says she plans to add quality metrics to the HFS algorithm within the next year. She points out that assessing quality at smaller plans like NextLevel can be difficult because there isn’t always enough data to ensure statistical significance.
Since 2018, NextLevel has paid $600,000 in fines, penalties and sanctions for failing to submit complete and comprehensive records of health care services covered by the plan. No other current Illinois Medicaid managed care plan incurred more fines during that period, except a much larger Blue Cross & Blue Shield of Illinois plan that serves customers throughout the state.
NextLevel, like the state’s other Medicaid managed care plans, is accredited by the National Committee for Quality Assurance, a nonprofit organization that rates health plans based on consumer satisfaction and clinical quality. According to NCQA, NextLevel hasn’t reported enough data to receive an overall rating, but it has a mix of two and three stars out of four in a handful of accreditation categories.

The state’s latest health plan report card, from 2017, ranks NextLevel—the newest and smallest plan—last among its peers. Officials expect to release a performance ranking for 2018 soon.

“The 2018 data will show significant improvements,” Cheryl Whitaker says in an emailed statement provided by a spokeswoman.
Medicaid managed care covers roughly 2 million people and cost Illinois about $10.7 billion during fiscal year 2018. Private insurers in 2017 vied for state contracts in a competitive bidding process. Rejected initially, NextLevel appealed and won a four-year contract.
“Somebody who really understands the community where they’re serving members, that’s something we’re pushing all the plans to get better at,” says Eagleson, who joined the department after contracts were awarded. “I’m grateful that there are plans like NextLevel and CountyCare at the table.”
The Whitakers were fixtures on Chicago’s health care scene long before NextLevel launched in 2014. Cheryl Whitaker, NextLevel’s chair and CEO, was director of a state agency that facilitated adoption of electronic medical records. Eric Whitaker, who told Crain’s in August that he left NextLevel about five years ago, is a former University of Chicago Medical Center executive and Illinois Department of Public Health director.
In a separate emailed statement, Cheryl Whitaker says NextLevel works to “address those social determinants that affect the health and life expectancy of residents across Cook County, and we do that with an innovative community-based approach to health care,” adding the plan has “achieved (NCQA) accreditation for attention to quality practices and excellent service.”
As Cheryl Whitaker focuses on NextLevel, Eric Whitaker is teaming up with the American Medical Association’s innovation arm to launch Zing Health, a Medicare Advantage plan for Cook County residents. Medicare Advantage, in which private companies contract with the government to offer Medicare beneficiaries additional benefits, has been a lucrative business for insurance companies as the population ages.

Eric Whitaker in February joined Los Angeles-based Pipeline Health in the purchase of three Chicago-area hospitals—West Suburban Medical Center in Oak Park, Weiss Memorial Hospital in Uptown and Westlake Hospital in Melrose Park. The group sparked outrage when it moved to close Westlake just two weeks after buying it.

Eric Whitaker has said he hoped the $70 million deal would lead to a network of safety-net and community hospitals, many of which are struggling financially, and serve large numbers of Medicaid patients.

https://www.chicagobusiness.com/health-care/medicaid-mystery-state-sends-lots-people-lowest-rated-managed-care-plan

California lets pharmacists dispense HIV prevention meds without prescription

Pharmacists in California will be able to dispense HIV prevention pills to patients without a doctor’s prescription after Gov. Gavin Newsom signed legislation Monday that supporters say will greatly reduce the spread of infection.

Advocates of Senate Bill 159 say California is the first state to authorize pre-exposure prophylaxis, also called PrEP, and post-exposure prophylaxis, known as PEP, without prescriptions. California is already considered a leader in AIDS prevention, they say.

PrEP is a once-daily pill for HIV-negative people while PEP is a medication that people take to prevent the virus from taking hold. Supporters say PEP significantly reduces the risk of infection, but only if started within 72 hours of exposure to the virus.

Not everyone can get to a doctor in that time frame, says Rick Zbur, executive director of Equality California.

“The ability to go into a pharmacy to avail themselves of the medication is a huge improvement to removing a barrier,” he said.

He says the law will greatly improve access and help reduce the stigma around the drugs, especially in rural areas and among minorities.

Nearly 30,000 people in California use PrEP and 6,000 use PEP, according to the California Health Benefits Review Program, which provides analysis to the Legislature.

The California Medical Association was initially opposed to the legislation but became neutral on it after it was amended to limit the number of PrEP pills patients can get without a physician’s note to 60 days, said Anthony York, spokesman for the association.

The association was concerned about “long-term use without physician oversight,” he said.

The law also prohibits insurance companies from requiring patients to get prior authorization before using insurance to get the drugs, eliminating another obstacle.

The bill was co-authored by state Sen. Scott Wiener, D-San Francisco, who has publicly disclosed that he takes PrEP as an HIV prevention strategy.

“To end new HIV infections, we must dramatically expand access to PrEP and PEP, yet far too many Californians who need these drugs struggle to access them,” he said.

Pharmacists in California are already authorized to dispense emergency contraceptives and birth control without a prescription.

Newsom also signed legislation Monday aimed at lowering the cost of prescription drugs. The new law targets so-called “pay for delay” agreements, when makers of brand-name drugs pay for makers of similar generic drugs to delay putting the products on the market.

The new law presumes such arrangements are anti-competitive and steps up enforcement to stop them.

Drug companies argue the bill will cause more delays for generic drugs by ensuring lengthy legal battles over patents.

https://www.modernhealthcare.com/politics-policy/california-allows-pharmacists-dispense-hiv-prevention-meds-without-prescription

Michigan wants to save $40 million by cutting PBMs out of Medicaid

Michigan’s Medicaid program would like to stop using pharmacy benefit managers to oversee prescription drug claims and negotiate prices with drugmakers, according to a notice from the Michigan Department of Health and Human Services.

The state proposed that it would start managing drug coverage on its own beginning Dec. 21. Michigan hopes the move will save Medicaid money by increasing its portion of drug rebates and slashing administrative costs. The department expects the proposal will save the state about $40 million.

The state also thinks the move will streamline the administrative process for providers and ensure uniform drug coverage for Medicaid enrollees.

As drug costs continue to skyrocket, several states have stopped outsourcing prescription drug claims and negotiations to PBMs because they have failed to deliver the cost savings they promised. Recent studies have found that PBM prices often exceed Medicaid fee-for-service drug prices, which has prompted states to break off their relationships with the PBMs.

Instead of easing drug benefit administration and negotiating better prices, many state Medicaid programs think PBMs are unnecessary middlemen that use tactics like spread pricing to grow their profits without delivering real benefits to taxpayers or beneficiaries.

But PBMs say this view is misguided and that they’re experienced negotiators who help states control drug costs by negotiating payment rates with drugmakers using formularies and utilization management tools that states can’t develop or leverage on their own.

Drugmakers pay PBMs rebates after the point of sale and can add up to 40% or more of a drug’s list price. PBMs usually try to address high drug prices by negotiating bigger rebates from pharmaceutical manufacturers, especially for brand-name drugs.

Critics, including public officials and patient advocacy groups, argue that PBMs have an incentive to prioritize high-priced drugs over more cost-effective medications because they’re partially reimbursed based on the size of the rebates they get from the manufacturers. There have been a number of reports of PBMs using tiering or other strategies to favor on-patent drugs over less expensive drugs that are just as beneficial, which could cost governments and patients more money.

PBMs are facing increasing scrutiny from lawmakers as they take aim at prescription drug prices. Some PBMs have responded by merging with other healthcare organizations, which can obscure the accounting of their PBM practices inside a larger company.

https://www.modernhealthcare.com/medicaid/michigan-wants-save-40-million-cutting-pbms-out-medicaid

Activist investor withdraws nomination for Brookdale board

Activist investor Land & Buildings Investment Management withdraws its nomination of James Flaherty III for Brookdale Senior Living’s (NYSE:BKD) board after talking with other Brookdale investors.

“While we view the conditional nature of the board chairmanship transition as the epitome of bad corporate governance, we support Guy Sansone ultimately becoming chairman of the board,” said Land & Building’s Jonathan Litt in a statement.

Litt said the firm will continue to monitor the situation at Brookdale and “take appropriate action as necessary.”

Previously: Brookdale calls activist investor’s nominee ‘unfit’ for board (Oct. 3)

https://seekingalpha.com/news/3504608-activist-investor-withdraws-nomination-brookdale-board

GSK recalls popular heartburn drug Zantac globally after cancer scare

GlaxoSmithKline (GSK.L) on Tuesday said it is recalling the popular heartburn medicine Zantac in all markets as a “precaution”, days after the U.S. Food and Drug Administration found “unacceptable” levels of probable cancer-causing impurity in the drug.

Zantac, also sold generically as ranitidine, is the latest drug in which cancer-causing impurities have been found. Regulators have been recalling some blood pressure and heart failure medicines since last year.
Britain’s medicines watchdog said GlaxoSmithKline (GSK) was recalling four prescription-only Zantac medicines: a syrup, an injection and tablets of 150 and 300 milligram (mg) dosages. (bit.ly/2IATooO)
Over-the-counter 75 mg dosage Zantac products are produced by a different company and are not affected by the recall, it added.
“GSK informed the MHRA of our decision to suspend the release, distribution and supply of all dose forms of Zantac products,” a company spokesman confirmed to Reuters.

“GSK is continuing with investigations into the potential source of the NDMA,” he said, adding that the investigations include continued engagement with its suppliers and with external laboratories to conduct tests on finished product batches of Zantac.
The Medicines and Healthcare products Regulatory Agency (MHRA) said healthcare professionals were told on Monday to “stop supplying the products immediately, quarantine all remaining stock and return it to their supplier”.
“We are advising that patients should not to stop taking their medication, and do not need to see their doctor until their next routine appointment but should seek their doctor’s advice if they have any concerns,” the MHRA said.

GLOBAL STOPPAGE

U.S. and European health regulators said last month they were reviewing the safety of ranitidine, after online pharmacy Valisure flagged the impurities.

The FDA said Valisure’s higher-temperature testing method generated very high levels of NDMA from the ranitidine drugs.
NDMA had previously been found in some blood pressure medicines from a class of drugs known as angiotensin II receptor blockers, or ARBs.
After checking the over-the-counter drugs using a low-heat method of testing, the FDA said it found much lower levels of NDMA than was discovered with a higher temperature test employed by Valisure.
The U.S. regulator has asked ranitidine makers to conduct their own testing to assess levels of the impurity and to send samples of their products for testing by the agency.
Swiss drugmaker Novartis (NOVN.S) halted global distribution of its ranitidine drugs last month.
Last week, Walmart Inc (WMT.N) joined pharmacy chains CVS Health Corp (CVS.N), Walgreens Boots Alliance Inc (WBA.O) and Rite Aid Corp (RAD.N) in suspending the sale of over-the-counter heartburn drugs containing ranitidine.

Canada’s health authorities have asked makers of the drugs to halt distribution as they gather more information. Last month, regulators in Hong Kong pulled four products, while in Ireland 13 products containing ranitidine were recalled.
The impurity was believed to have been introduced by changes in the manufacturing process.
https://www.reuters.com/article/us-gsk-heartburn-zantac/gsk-recalls-popular-heartburn-drug-zantac-globally-after-cancer-scare-idUSKBN1WN1SL