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Implementing Health Reform: The Latest Affordable Care Act Coverage Numbers (Updated)

April 18th, 2014
by Timothy Jost

On February 17, 2014, the White House announced that 8 million Americans have signed up for private health insurance coverage through the health insurance marketplaces, or exchanges. This significantly exceeds the White House’s original goal of 7 million enrollees. It is far more than the Congressional Budget Office’s recent projections of 6 million.

The number of actual enrollees will be smaller than this number. The CBO’s projections are for the average number of those actually enrolled in coverage over the course of a calendar year. To calculate the average number of enrollees, one must subtract from the 8 million the number of individuals who fail to pay their premiums and thus are never actually enrolled in coverage, as well as those who will drop coverage at some later point during the year. To that reduced number, then, must be added back the number who become newly covered through special enrollment periods during the remainder of the year. In the end, 6 to 7 million average enrollees is probably a reasonable estimate.

This does not, however, exhaust the number of Americans who are now covered under the Affordable Care Act. The fact sheet states that 3 million young adults are covered under their parents’ plans because of the ACA. This number is probably high, but it is clear that the ACA has dramatically increased coverage of Americans between the age of 19 and 25 — the age group most likely to lack health insurance prior to the ACA (and still).

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Accelerating Medicines Partnership: A New Public-Private Collaboration For Drug Discovery

April 8th, 2014
by Aaron Kesselheim and Yongtian Tan

Editor’s note: This post is also coauthored by Yongtian Tan and is published in conjunction with the April issue of Health Affairs, which explores the many subjects raised by Alzheimer’s disease including a new public-private research collaboration designed to produce improved treatments.

Earlier this year, the National Institutes of Health joined forces with ten major pharmaceutical companies and several nonprofit disease interest groups to create the Accelerating Medicines Partnership (AMP). With an integrated governance structure consisting of representatives from all partners, the AMP venture aims to combine public-private expertise and pooled resources to reduce the time and cost of  developing biomarkers for therapeutic targets.

The initial capitalization is reported to be $230 million.  The AMP is the first national cross-sector partnership of its size and scale, and is the latest initiative in the drug development market to embrace open data exchange, encouraging collaboration over competition as pathways for promoting innovation.

The AMP management chose to focus on four diseases—Alzheimer’s disease, type 2 diabetes mellitus, rheumatoid arthritis, and systemic lupus erythematosus—in which there was solid knowledge about the underlying pathophysiology, a sufficient level of potential therapeutic targets open to pursuit, and a lack of substantial individual manufacturer commitment.  The latter criterion explains why more prevalent diseases such as cancer did not make the list.

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Clinical Nuance: Benefit Design Meets Behavioral Economics

April 3rd, 2014

On Capitol Hill, there’s a growing chorus of support from both sides of the aisle to move the focus of health care payment incentives from volume to value. Earlier this month, legislators introduced proposals that would have fixed the sustainable growth rate in Medicare, as well as made other changes, including allowing for clinical nuance in Medicare benefit designs. The Centers for Medicare and Medicaid Services, too, is embracing this trend, recently asking for partners in a demonstration project to used value-based arrangements in benefit design. These efforts of policymakers and agencies to innovate Medicare’s benefit design are crucial both for the health of seniors and to ensure value in the Medicare program.

The concept of clinical nuance, implemented using value-based insurance design (V-BID), is a key innovation already widely implemented in the private and public payers. It recognizes two important facts about the provision of medical care: 1) medical services differ in the amount of health produced, and 2) the clinical benefit derived from a medical service depends on who is using it, who is delivering the service, and where it is being delivered.

Today’s Medicare beneficiaries face little clinical nuance in their benefit structure. Medicare largely uses a “one-size-fits-all” structure that does not recognize that some treatments, drugs or tests are more important to health than others. Not only does it create inefficiencies in the health system, it can actually harm the health of beneficiaries.

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March Madness: Medicare Part D’s Persistent Challenge And Opportunity

March 24th, 2014
by N. Lee Rucker

March Madness came early for CMS, with more than 7,600 public comments received on their Medicare Part D proposed rules and technical changes for 2015.  Less than 72 hours after that docket closed, CMS unfurled their white flag via a March 10 letter to Congress, retracting certain highly-contentious provisions, as previewed in recent posts on Health Affairs Blog by Jack Hoadley and Ian Spatz.  However, CMS’ hasty retreat should not signal a relaxed advocacy in the coming weeks.  Like NCAA basketball’s March Madness, much remains in play, especially given Part D’s programmatic (and patient-level) complexity.

For example, in their March 14 report to Congress, the Medicare Payment Advisory Commission (MedPAC) expressed concern “about the quality of pharmaceutical care received by beneficiaries with multiple medications.”  MedPAC notes that Part D enrollees’ medical problems may be “caused or exacerbated by their heavy use of medications (polypharmacy), and they are at increased risk of adverse drug events, drug-drug interactions, and use of inappropriate medications.”

To help alleviate such potential risk, prescient policymakers required Part D plan sponsors to implement medication therapy management (MTM) programs, something that I examined closely during my tenure at AARP.  Within Part D, MTM’s experience to date represents a cautionary tale of missed opportunities to bring clinicians, patients, and drug plans together to achieve the Triple Aim.  This commentary reviews several challenges, and identifies new positive cues to better integrate systematic, patient-centered medication management across all of Medicare.

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Implementing Health Reform: Ryan White Third-Party Payments, 2015 Letter To Issuers, And Other ACA Developments

March 15th, 2014
by Timothy Jost

On March 14, 2014, the Department of Health and Human Services released a flood of regulations, proposed regulations, and guidance addressing a host of Affordable Care Act implementation issues. From all indications, HHS has cleared the decks of all the regulatory issuances it had under consideration– nothing involving ACA implementation remains pending at the Office of Management and Budget. Perhaps someone made a promise that all would be completed by the end of the winter (or by Saint Patrick’s Day). More likely the necessity of having the ground rules for 2015 in place so that insurers could proceed with their 2015 forms and rates, and states with approving them, drove the deluge. In any event, it will take several posts to cover it all.

Yesterday’s post covered a notice on extending the federal preexisting condition high risk pool and a frequently asked questions document on coverage of same-sex spouses. The Internal Revenue Service also released a set of general Tax Tips for Same-Sex Couples (which covers general tax information and will not be discussed here), while HHS issued a blog post summarizing its frequently asked questions document.

This post will cover several other issuances released late in the day on March 14, 2014. These include an interim final rule (with comment period) dealing with third party payments for qualified health plans (QHPs) and stand-alone dental plans (SADPs); the 2015 final annual letter to issuers in the federally facilitated marketplace; a set of frequently asked questions on retroactive coverage, and a set of frequently asked questions on the use of exchange grants and no-cost extensions.

A final post will examine a proposed rule on exchange and insurance standards for 2015 and beyond and an accompanying bulletin on product discontinuance.

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Medicare Part D Proposed Rule: Where Did Things Go Wrong?

March 6th, 2014
by Ian Spatz

It’s worth sitting up and taking notice when everyone seems to hate what you are doing. Last week, 20 of the 24 members of the sometimes fractious Senate Finance Committee wrote Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner about a Medicare Part D proposed rule CMS published on January 10. They told her that they were “perplexed as to why CMS would propose to fundamentally restructure Part D …” and urged her to scrap the plan.

The House Energy and Commerce Committee held a hearing, also last week, with the hardly neutral title of “Messing with Success: How CMS’ Attack on the Part D Program Will Increase Costs and Reduce Choices for Seniors.” At the hearing, Medicare Chief Jon Blum, one of the most well-liked federal health officials there is, was subjected to a bipartisan, first class, grilling.

These Congressional complaints followed on the heels of Feb. 28 letter slamming the proposed rule from 277 organizations (with more organizations continuing to sign on) including patient advocates, insurance companies, health plans, pharmacists, employers, and both brand and generic drug companies.

In fairness to CMS, this is only a proposed rule and comment is what they are seeking. Well, it is comment that they are getting. What has led to this firestorm of criticism?

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Financial Orphan Therapies Looking For Adoption

March 6th, 2014

There exist scientifically promising treatments not being tested further because of insufficient financial incentives. Many of these therapies involve off-label uses of drugs approved by the Food and Drug Administration that are readily available and often inexpensive. Pharmaceutical companies—largely responsible for clinical drug development—cannot justify investing in such clinical trials because they cannot recoup the costs of these studies.  However, without prospective data demonstrating efficacy, such treatments will never be adopted as standard of care.

In an era of increasing health care costs and the need for effective therapies in many diseases, it is essential that society finds ways to adopt these “financial orphans.” We propose several potential solutions for the non-profit sector, pharmaceutical companies, health insurers, patient driven research and others to accomplish this goal.

Drug Development Today

Under today’s drug development model, the vast majority of clinical trials are sponsored by pharmaceutical companies, and the process is lengthy, expensive, and, some have argued, inefficient. The cost of developing a new FDA approved drug is estimated to exceed $1.2 billion, the average time from lead to market is typically over 10 years, and only 1 in 10 drugs entering a phase I study is finally approved. Thus pharmaceutical companies, seeking to recoup this investment, conduct a return on investment (ROI) calculation with attention to both scientific and financial considerations such as the chances of success and whether the therapy will be sufficiently profitable to justify the high cost of clinical development.

These considerations sometimes lead to inefficient outcomes from society’s perspective in which promising and potentially transformative therapies are not pursued because of improperly designed financial incentives. We call such therapies “financial orphans.”

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Assessing A CMS Proposal To Improve Competition Among Medicare Part D Drug Plans

March 4th, 2014
by Jack Hoadley

In one provision of its January Notice of Proposed Rulemaking (NPRM), for Medicare Part D and Medicare Advantage, CMS proposed that it will accept no more than two stand-alone prescription drug plan (PDP) bids from each Part D plan sponsor, starting in coverage year 2016. The agency stated two reasons for this proposal. First, it would reduce beneficiary confusion in the Part D market by both lowering the number of choices that they face and ensuring that differences between competing options are clear and meaningful to them. Second, it would address the impact of one source of favorable selection that leads to higher costs for the government and the taxpayer. This note looks at evidence from Part D to help understand the context for this proposal.

Reducing the Number of Plan Offerings

The competitive market design of Part D requires that plan enrollees regularly evaluate their options. Our recent study shows that most Part D enrollees have not changed their plan selection from one year to the next, and seven of ten enrollees in stand-alone PDPs did not switch plans over a five-year period. Both the current CMS guidance and the new CMS proposal stem from the principle that available PDPs offered by a given plan sponsor should have “meaningful differences” to help ensure that beneficiaries are presented with a clear and understandable array of choices. The Part D program in 2014 offers the average beneficiary a choice of about 35 PDPs and 20 Medicare Advantage drug plans.

Currently, a plan sponsor may offer up to one plan with the basic Part D benefit as described in statute (or actuarially equivalent to the basic benefit) and two enhanced plans. If two enhanced plans are offered, a sponsor may enhance the benefit through lowering the deductible, cost sharing, or both. The second plan must add substantial coverage in the coverage gap (“doughnut hole”). Current CMS guidance further encourages plan sponsors to eliminate plans attracting few enrollees. Nevertheless, 330 of the 1,169 PDPs in 2014 have fewer than 1,000 enrollees (239 of them with fewer than 500 enrollees) – the level at which CMS encourages sponsors to consolidate smaller plans with another of the sponsor’s plan options.

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To Pay For Medicare SGR Repeal, Build On Bipartisan Health Care Policy

February 20th, 2014

Something unexpected is happening in Washington. As most eyes track partisan battles over immigration and the Affordable Care Act, key Congressional committees have been quietly advancing truly bipartisan legislation to strengthen Medicare.

Since 2002, an outdated Medicare cost control called the Sustainable Growth Rate (SGR) has repeatedly threatened drastic Medicare provider cuts. After a decade of temporary fixes, SGR repeal appears within reach. A bipartisan, bicameral agreement by key Congressional leaders announced on February 6, 2014 goes a step further by pairing repeal with bipartisan reforms that pay physicians for the quality and value of care they deliver, not the number of tests and procedures they order.

When one of every three health care dollars is wasted on care that does not improve patients’ health, transitioning away from volume-based reimbursement would be momentous. Few policy changes are more fundamental to containing health care costs and protecting the solvency of Medicare.

The challenge in Congress has shifted from getting a bipartisan agreement on new cost controls to paying for the repeal of the old one. The Congressional Budget Office (CBO) estimates the cost of the Senate version of the bipartisan repeal bill at $149 billion over 10 years.

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If A Drug Is Good Enough For Europeans, It’s Good Enough For Us

February 14th, 2014
by Paul Howard and Yevgeniy Feyman

Note: This post is coauthored by Paul Howard and Yevgeniy Feyman of the Manhattan Institute.

Meningitis is a terrible disease that can kill its victims in a single day. About 4,100 new cases are diagnosed annually in the U.S., with a mortality rate of more than 10 percent. Even with treatment, survivors are often left with serious side effects that can include brain damage and limb loss.

A recent meningitis outbreak at Princeton University was unique, however, because the vaccines typically required by universities don’t protect against the particular strain (serogroup B or “MenB”) of the outbreak. Luckily, Swiss drug manufacturer Novartis has developed a vaccine — Bexsero — that specifically targets this strain of meningitis; the drug has already been approved for use by the European Medicines Agency (EMA), the European Union’s equivalent of the Food and Drug Administration (FDA). And within about nine months the FDA allowed Princeton University to offer the vaccine on campus to its students.

Problem solved, right? Not so fast.

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Health Affairs Web First: Positive Results For Value-Based Insurance Design Plans

February 12th, 2014
by Tracy Gnadinger

One of the provisions of the Affordable Care Act calls for the creation of guidelines to facilitate the broader use of Value-Based Insurance Design (VBID) plans. Existing VBID plans have been structured in a variety of ways, and these variations could influence their effectiveness. A new study, “Five Features Of Value-Based Insurance Design Plans Were Associated With Higher Rates Of Medication Adherence,” being released today as a Web First by Health Affairs, evaluated seventy-six VBID plans introduced by a large pharmacy benefit manager (CVS Caremark) during 2007-2010.

Authors Niteesh Choudhry, Michael Fisher, Benjamin Smith, Gregory Brill, Charmaine Girdish, Olga Matlin, Troyen Brennan, Jerry Avorn, and William Shrank found that after adjusting for the other features and baseline trends, VBID plans that were more generous, targeted high-risk patients, offered wellness programs, did not offer disease management programs, and made the benefit available only for the medication ordered by mail had a significantly greater impact on adherence than plans without these features.

The study sample consisted of 274,554 patients provided by thirty-three unique plan sponsors. The majority of VBID plans did not have generous benefits, used copay tiers, and had a disease management program for the condition that the plan targeted. The authors noted that the positive association between wellness programs, patient targeting, and mail-order prescriptions was significant, considering that all these interventions are very low cost and easily implemented.

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Views From the Hospital Executive Suite Leads Health Affairs Blog December Top Ten

January 9th, 2014
by Tracy Gnadinger

Since the majority of Americans believe the Affordable Care Act will have a negative impact on the health care system, it’s no surprise Andrew Steinmetz, Ralph Muller, Steven Altschuler, and Ezekiel Emanuel‘s post about hospital executives’ largely positive view of health care reform was the most-read post on Health Affairs Blog in December. Next on the list, for the third month in a row, was James Rickert’s discussion of patient-centered care, followed by Timothy Jost‘s post on exemptions from the individual mandate and Mary Ersek and David Stevenson‘s post on challenges and opportunities of integrating palliative care into nursing homes, the first in a series on palliative care.

The full list appears below.

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Implementing Health Reform: Looking Ahead After A December Enrollment Jump

December 29th, 2013
by Timothy Jost

Although enrollment for January 1, 2014 began with a whimper in October, 2013, it ended with a bang on December 24, 2013. According to Julie Bataille, Director of CMS’s Office of Communications, had 2 million visits on Monday, December 23, and 880,000 visits on Christmas Eve. The Marketplace call center received more than 250,000 calls on December 23rd and 317,000 calls on the 24th.

After 27,000 enrolled qualified health plans through the federal exchange in October and 110,000 in November, 975,000 enrolled in qualified health plans in December, despite the fact that it was a short month. Enrollment nearly doubled in the last few days of the enrollment period compared to earlier in the month. Hundreds of thousands more have enrolled through the state exchanges as well: about 400,000 in California, more than 188,000 in New York, almost 60,000 in Connecticut. And many more have been signed up for Medicaid.

Some of this heavy traffic is the predicted last minute rush of people who wanted coverage by January 1, 2014, at which time qualified health plan coverage with premium tax credits begins. But it is also due to the fact that the websites are at last up and running. It is now finally possible for consumers to sign up relatively quickly most of the time and to find the coverage they are entitled to. Now the massive planned enrollment efforts that have been on hold for months as the websites struggled can begin. Between now and March 31 we will see a continued surge as American’s uninsured get the coverage long denied them.

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Slowed ACO Growth Leads Health Affairs Blog November Top Ten

December 24th, 2013
by Tracy Gnadinger

With the success or failure of Accountable Care Organizations (ACOs) having significant implications for the U.S. health care system, David Muhlestein‘s post on the slowed growth of ACOs was the most-read post on Health Affairs Blog in November. Next on the list is James Rickert‘s discussion of patient-centered care, followed by two posts by Timothy Jost on health insurance policy terminations and events in the individual market, including mental health and substance abuse parity.

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Managing Off-Label Drug Use

December 17th, 2013
by Marc Rodwin

The Food and Drug Administration (FDA) authorizes the marketing of drugs only for uses that the manufacturer has demonstrated to be safe and effective. However, the FDA does not regulate medical practice, so physicians may prescribe drugs in ways that deviate from the uses specified in the FDA-approved drug label and marketing authorization, a practice referred to as off-label prescribing. This practice includes prescribing for a different therapeutic purpose, using a different dose or a different duration of use, using a different mode of administration than the one indicated on the label, and prescribing the drug for patients in a different age cohort or gender than the population on which it was tested.

Off-label prescribing makes clinical sense only in exceptional circumstances. If reasonable evidence suggests that the benefit of off-label use will outweigh the risks, that declining to treat the condition poses even greater dangers than the off-label prescription does, and that there is no adequate alternative therapy, then off-label prescribing can benefit patients. However, physicians prescribe off-label much more frequently than is justifiable: seventy percent of off-label uses lack significant scientific support. They risk harming their patients without producing therapeutic benefit.

Physicians value the right to prescribe off-label. Insurers that reimburse such prescriptions make it feasible for patients to purchase the drugs. But it is the pharmaceutical firms’ incentive to increase sales that drives this practice. More sales increases profits, whether the drugs are used as approved or off-label, so manufacturers have powerful incentives to promote off-label use and none to discourage it. Their strategies to promote off-label use are often legal and recent court decisions have made it even easier for them by expanding the scope of activities deemed to be commercial speech protected by the First Amendment. But manufacturers also have incentives to engage in illegal promotion when the expected revenue exceeds any penalties.

Unmanaged off-label drug use compromises sound medical practice and undermines the FDA’s mission of protecting patients by regulating the drug market. Yet public policy fails to track, evaluate, or oversee off-label drug use. Typical reform proposals, such as increased sanctions for illegal off-label promotion, might reduce unjustified off-label use, but addressing the source of the problem would require the following steps. Prescriptions must be tracked to identify and oversee off-label prescribing. Reimbursement rules must change so that manufacturers cannot profit from off-label sales. Manufacturers must pay for independent evaluation of off-label uses when off-label sales pass a critical threshold.

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Implementing Health Reform: Extending Enrollment And Premium Deadlines; Easing Provider And Drug Transitions

December 13th, 2013
by Timothy Jost

On December 12, 2013, with twelve shopping days until Christmas and three shopping days left until exchange enrollment was supposed to close for 2013, HHS, citing “unforeseen barriers to enrollment in the Exchanges,” issued an interim-final rule entitled “Maximizing January 1, 2014 Coverage Opportunities.” The rule formally extends until December 23, 2013, the date by which individuals must enroll in the exchanges to ensure coverage for January 1, 2014, giving applicants eight additional shopping days. The rule also extends until December 31 the date by which enrollees must pay their premium to ensure coverage for January 1, while the preface encourages insurers to give enrollees even more time to pay, or to accept partial payments. The preface to the rule encourages insurers to help ensure continuity of provider coverage and availability of off-formulary drugs.

Finally, another notice, also released on December 12, extends coverage in the Pre-existing Condition Insurance Program (PCIP), which was supposed to expire on December 31, 2013, for one month.

The troubles that have afflicted the federal exchange website and many state exchanges are common knowledge. Although enrollment is going more smoothly now, millions of uninsured individuals who are eligible for advance premium tax credits that will largely cover the cost of their coverage have not yet been able to enroll. Millions of additional individuals have been unable to renew their current policies in the individual and small group market, as those policies do not meet 2014 market reform requirements. Although these individuals can purchase policies in the individual and small group market outside of the exchange, and most of them probably will, many would be able to find better deals in the exchange or qualify for premium tax credits but have not yet been able to do so.

In addition, 105,000 individuals are covered through the PCIP and a couple of hundred thousand more through state high risk pools, which were supposed to have closed at the end of 2013. These individuals desperately need coverage. The interim final rule attempts to extend the opportunities all of these individuals have to gain coverage.

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Why Are Cancer Drugs Commonly The Target Of Schemes To Extend Patent Exclusivity?

December 4th, 2013
by Rena Conti

The makers of branded pharmaceuticals have devised numerous ways to extend patent exclusivity for lucrative products in the United States. In June, the Supreme Court gave the Federal Trade Commission (FTC) clear authority to investigate and prosecute one of them, “pay-for-delay” agreements, but stopped short of making such deals presumptively unlawful restraints of trade. In the case the court decided, a manufacturer of a branded drug, a testosterone replacement patch, paid the maker of the generic to refrain from entering the domestic market with its product.

The more dramatic battles over the timing of a drug’s transition from branded to generic form are being fought in cancer. Cancer is the second-leading cause of death in the United States. Americans spent $157 Billion (B) on cancer care in 2010; $23B or 18 percent of total spending was devoted to oncologics, a 41 percent increase since 2006 and largely paid for by Medicare. Between 2006 and 2011, cancer drugs were the second most commonly litigated generic drug treatment class (70 unique cases), following cholesterol-lowering agents (123 unique cases).

Here, I argue that outsized potential profits, limited competition, and strong demand makes cancer drugs attractive for patent disputes. Several oncologics due for upcoming patent expiration illustrate important opportunities and caveats under current law. The outcomes of these and other cases will have significant consequences for cancer patients and their insurers.

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Recent Health Policy Briefs: Specialty Pharmaceuticals And Medicare Hospital Readmissions

November 25th, 2013
by Tracy Gnadinger

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation explains many of the current debates surrounding the use of specialty pharmaceuticals. Specialty pharmaceuticals—drugs and biologics used to treat chronic, serious, or life-threatening diseases—are complex to manufacture and distribute, often difficult to administer, and may require special patient monitoring. They are a rapidly growing share of the costs borne by both public and private health plans. A patient could pay a few thousand dollars a month to use them, and the annual total cost for some products could exceed $100,000. This policy brief discusses the potential impact of specialty pharmaceuticals on consumers and the health care industry and some of the key challenges for policy makers.

The immediately preceding Health Policy Brief describes the Medicare Hospital Readmissions Reduction Program (HRRP), established as part of the Affordable Care Act. This program imposes financial penalties on hospitals with higher than expected readmissions. The program aims to create an incentive for hospitals to reduce the number of patients who return to the hospital within 30 days for treatment of three key conditions: acute myocardial infarction (that is, heart attack), heart failure, or pneumonia. The HRRP, in operation for only two years, already has shown results. Despite this success, some policy makers fear unintended consequences for safety-net hospitals, potentially putting vulnerable populations at risk.

Health Policy Briefs are aimed at policy makers, congressional staffers, and others needing short, jargon-free explanations of health policy basics. Sign up for an e-mail alert about upcoming briefs. The briefs are also available from the Robert Wood Johnson Foundation’s website. Please feel free to forward the briefs to any of your colleagues who are tracking health issues. And after you’ve taken a look, we welcome your feedback at:

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Health Policy Brief: Biosimilars

October 10th, 2013
by Chris Fleming

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation explains key elements of the Biologics Price Competition and Innovation Act (BPCIA), a provision of the Affordable Care Act. The BPCIA authorizes the Food and Drug Administration (FDA) to develop an accelerated approval process for biosimilars. Biosimilars are follow-on versions of original therapies derived from a biological source, including vaccines, antitoxins, and blood products—commonly referred to as biologics.

The FDA released draft guidelines for an accelerated approval process for biosimilars in February 2012, but the widespread introduction of biosimilar drugs is likely several years away. This policy brief discusses the opportunities and challenges of producing and introducing biosimilars into the US marketplace.

Topics covered in this brief include:

What’s the background? The brief explains the evolution of the 1984 Hatch-Waxman Act, which provides the regulatory foundation for modern generic drugs. However, Hatch-Waxman does not apply to biosimilars, and, with demand for biologics expanding rapidly in the global marketplace, the Obama administration needed to establish a new regulatory review process in the United States for this type of drug. The United States can look to the work of the European Medicines Agency, which has an approval process in place. An article in the October 2013 issue of Health Affairs, by Francis Megerlin and colleagues, describes the European experience.

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Mapping The Trends In Employer-Sponsored Insurance

October 8th, 2013
by Carolina-Nicole Herrera and Stephen Parente

Editor’s note: Stephen Parente coauthored this post with Carolina-Nicole Herrera.

For the first time since the mid-1990s, the United States has seen significant reduction in the growth of health expenditures. A critical question for policy makers and the health industry is whether the slowdown is sustainable.

Our newly published Health Affairs article with Marty Gaynor, David Newman, and Robert Town puts the reduction into the context of a long arc of cost growth in employer-sponsored insurance (ESI), the largest source of coverage in the nation. Specifically, the article, “Trends Underlying Employer-Sponsored Health Insurance Growth for Americans Younger than Age 65”, provides a comparison of the recession to initial recovery numbers on medical and prescription trends for people with ESI. The data came from the Health Care Cost Institute (HCCI).

During and immediately after the recession, we found that ESI spending per person grew at an average annual rate of 4.9 percent, with spending growing slower in 2010 and 2011 than during the recession. We found the same pattern for medical and prescription spending, although medical spending grew faster than prescription spending in all years.

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