NCPA: U.S. Reps. contact Medicare in support of proposed changes for 2015 drug plans
ALEXANDRIA, Va. — Members of Congress are contacting the U.S. Centers for Medicare and Medicaid Services in support of pro-patient improvements the agency proposed for Medicare Part D prescription drug plans in 2015, a development applauded today by the National Community Pharmacists Association.
In response to problems with “preferred pharmacy” networks, CMS has proposed allowing any willing pharmacy to offer a plan’s lowest, or preferred, cost-sharing to give seniors more choice and to foster greater competition among pharmacies.
U.S. Representatives Mike Rogers, R-Ala., and Lynn Westmoreland, R-Ga., have written to CMS to back the change.
“I was encouraged to hear that the proposed rule for Part D dealt with many of the concerns that [community pharmacists] shared with me,” Rep. Rogers wrote. “Not only were these community pharmacies not allowed to even try and compete with lower co-pays that larger stores can offer, but many seniors signed up for these plans not realizing they would no longer be able to continue using their community pharmacy after signing up.”
Rep. Westmoreland wrote to CMS that, “Your agency’s recent release of its proposed rule on Part D has some very encouraging language that addresses” concerns raised by community pharmacists and patients, adding that “I believe the work is not yet complete and that it is crucial that Congress and the Executive Branch make sure small business pharmacies have the ability to compete on a level playing field with all the entities involved.”
Both lawmakers represent rural communities and noted that independent community pharmacies often serve such areas where national chain pharmacies may not exist.
“We commend these lawmakers for voicing their support on behalf of their constituents for the common-sense enhancements that Medicare has proposed for drug plans next year,” said NCPA CEO Douglas Hoey. “Patients will benefit from more choice and competition among pharmacies if CMS’ proposal is made final. Independent community pharmacies deserve the opportunity to match the contract terms and conditions, including pricing, of ‘preferred’ pharmacies. As Medicare officials have noted, this is ‘the best way to encourage price competition and lower costs in the Part D program.’”
In March 2013, 31 U.S. representatives sent a letter to CMS to express concerns over exclusionary preferred networks in Medicare Part D. In particular, the lawmakers said, “We fear these networks could lead to a decrease in access to quality care and threaten the survival of community pharmacies” and further demanded a response from CMS. Shortly thereafter, the agency received a similar letter from 16 U.S. senators. CMS subsequently issued the proposed rule open until March 7, 2014 for public comment.
While preferred pharmacy networks have been championed by pharmacy benefit managers as producing astronomical cost savings, a series of analyses of Medicare data have found repeated instances where preferred pharmacy plans and PBM-owned mail order are more expensive for Medicare.
Mallinckrodt to acquire Cadence Pharmaceuticals
DUBLIN — Mallinckrodt and Cadence Pharmaceuticals on Tuesday announced that they have entered into a definitive agreement under which a subsidiary of Mallinckrodt will commence a tender offer to acquire all outstanding shares of Cadence Pharmaceuticals for $14.00 per share in cash or approximately $1.3 billion on a fully diluted basis, which represents a 32% premium to the trailing 30-trading-day volume weighted average price of $10.62 per share for Cadence Pharmaceuticals.
Subject to customary terms and conditions, the parties expect the transaction to close in mid- to late-March.
Cadence Pharmaceuticals is a biopharmaceutical company focused on commercializing products principally for use in the hospital setting. The company’s product Ofirmev (acetaminophen injection) is a proprietary intravenous formulation of acetaminophen for the management of mild to moderate pain, the management of moderate to severe pain with adjunctive opioid analgesics and the reduction of fever. Since its introduction, Ofirmev has experienced strong growth. In a press release issued Jan. 13, Cadence reported that it expects net revenues of $110.5 million for Ofirmev in calendar year 2013, compared with 2012 reported net-product revenues of $50.1 million.
Ofirmev currently is on formulary in more than 2,350 U.S. hospitals and has been used to treat an estimated 6 million to 7 million patients since its launch in January 2011. A New Drug Submission for the product has been approved by Health Canada.
This transaction accelerates growth in Mallinckrodt’s Specialty Pharmaceuticals segment in key ways. First, the company adds another powerful growth product, Ofirmev, to the segment’s portfolio of core controlled substance generics and its growing roster of such brands as Exalgo, Gablofen, Pennsaid 2% and, if approved, Xartemis XR and longer term MNK-155. Additionally, with the strong presence Cadence has established in the adjacent hospital market, the acquisition adds another potential growth dimension for the segment, providing Mallinckrodt an opportunity to expand the company’s reach and penetration in this channel.
“The acquisition of Cadence Pharmaceuticals is consistent with our goal of becoming a leading global specialty pharmaceuticals company,” said Mark Trudeau, CEO and president of Mallinckrodt. “Ofirmev’s growth is driven by an expanding base of physicians who are prescribing the product for an increasing number of surgical patients, and we believe the product will be an outstanding addition to the brands component of Mallinckrodt’s Specialty Pharmaceutical segment. We have been impressed with the strong relationships that Cadence’s commercial organizations have established with customers in the hospital channel and are excited by the opportunity to build on these relationships to expand our platform in this area. We believe Mallinckrodt is well-positioned to further accelerate the trajectory of Ofirmev and realize the full value of this product in the marketplace.”
Avalere Health: Medicare proposed rule change could require 39% of all PDPs to be eliminated in 2016
WASHINGTON — A Medicare proposed rule change limiting the number of prescription drug plans that insurers may offer in the Part D market could require 39% of all enhanced plans to be eliminated in 2016, according to an analysis from Avalere Health that was released Wednesday. The change, which limits standalone PDP sponsors to one basic and one enhanced plan per region, was proposed by the Centers for Medicare and Medicaid Services in a January proposed regulation.
Avalere estimates that the change would require 214 of the current 552 enhanced PDPs to be terminated or consolidated with an existing plan. Those 214 plans represent products sold by nine carriers that currently offer two enhanced PDPs in the same region.
“Many health plans have designed low-premium, enhanced PDPs to attract cost-conscious enrollees and more comprehensive options for higher-need beneficiaries,” said Matt Eyles, EVP at Avalere Heath. “Plans are likely to respond to this change by rolling the more comprehensive PDP into the lower-cost plan, which could increase premiums for beneficiaries.”
The anticipated change in policy would impact 7.4 million of the 7.9 million (94%) Medicare beneficiaries who are currently enrolled in an enhanced plan — including both beneficiaries whose plan will be terminated or consolidated and those whose plan will remain but may see changes in benefits or premiums as plan options and enrollees are consolidated.