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Biden Plan to Save Medicare Patients Money on Drugs Risks Empty Shelves, Pharmacists Say

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Susan Jaffe
Tue, 11 Jun 2024 09:00:00 +0000

Months into a new Biden administration policy intended to lower drug costs for Medicare patients, independent pharmacists say they're struggling to afford to keep some prescription drugs in stock.

“It would not matter if the governor himself walked in and said, ‘I need to get this prescription filled,'” said Clint Hopkins, a pharmacist and co-owner of Pucci's Pharmacy in Sacramento, California. “If I'm losing money on it, it's a no.”

A regulation that took effect in January changes prescription prices for Medicare beneficiaries. For years, prices included pharmacy performance incentives, possible rebates, and other adjustments made after the prescription was filled. Now the adjustments are made first, at the pharmacy counter, reducing the overall cost for patients and the government. But the new system means less money for pharmacies that acquire and stock medications, pharmacists say.

Pharmacies are already struggling with staff shortages, drug shortages, fallout from opioid lawsuits, and rising operating costs. While independent pharmacies are most vulnerable, some big chain pharmacies are also feeling a cash crunch — particularly those whose parent firms don't own a pharmacy benefit manager, companies that negotiate drug prices between insurers, drug manufacturers, and pharmacies.

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A top official at the Centers for Medicare & Medicaid Services said it's a matter for pharmacies, Medicare insurance plans, and PBMs to resolve.

“We cannot interfere in the negotiations that occur between the plans and pharmacy benefits managers,” Meena Seshamani, director of the Center for Medicare, said at a conference on June 7. “We cannot tell a plan how much to pay a pharmacy or a PBM.”

Nevertheless, CMS has reminded insurers and PBMs in several letters that they are required to provide the drugs and other benefits promised to beneficiaries.

Several independent pharmacists told KFF they'll soon cut back on the number of medications they keep on shelves, particularly brand-name drugs. Some have even decided to stop accepting certain Medicare drug plans, they said.

As he campaigns for reelection, President Joe Biden has touted his administration's moves to make prescription drugs more affordable for Medicare patients, hoping to appeal to voters troubled by rising care costs. His achievements include a law, the Inflation Reduction Act, that caps the price of insulin at $35 a month for Medicare patients; caps Medicare patients' drug spending at $2,000 a year, beginning next year; and allows the program to bargain down drug prices with manufacturers.

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More than 51 million people have Medicare drug coverage. CMS officials estimated the new rule reducing pharmacy costs would save beneficiaries $26.5 billion from 2024 through 2032.

Medicare patients' prescriptions can account for at least 40% of pharmacy business, according to a February survey by the National Community Pharmacists Association.

Independent pharmacists say the new rule is causing them financial trouble and hardship for some Medicare patients. Hopkins, in Sacramento, said that some of his newer customers used to rely on a local grocery pharmacy but came to his store after they could no longer get their medications there.

The crux of the problem is cash flow, the pharmacists say. Under the old system, pharmacies and PBMs reconciled rebates and other behind-the-scenes transactions a few times a year, resulting in pharmacies refunding any overpayments.

Now, PBM clawbacks happen immediately, with every filled prescription, reducing pharmacies' cash on hand. That has made it particularly difficult, pharmacists say, to stock brand-name drugs that can cost hundreds or thousands of dollars for a month's supply.

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Some patients have been forced to choose between their pharmacy and their drug plan. Kavanaugh Pharmacy in Little Rock, Arkansas, no longer accepts Cigna and Wellcare Medicare drug plans, said co-owner and pharmacist Scott Pace. He said the pharmacy made the change because the companies use Express Scripts, a PBM that has cut its reimbursements to pharmacies.

“We had a lot of Wellcare patients in 2023 that either had to switch plans to remain with us, or they had to find a new provider,” Pace said.

Pace said one patient's drug plan recently reimbursed him for a fentanyl patch $40 less than his cost to acquire the drug. “Because we've had a long-standing relationship with this particular patient, and they're dying, we took a $40 loss to take care of the patient,” he said.

Conceding that some pharmacies face cash-flow problems, Express Scripts recently decided to accelerate payment of bonuses for meeting the company's performance measures, said spokesperson Justine Sessions. She declined to answer questions about cuts in pharmacy payments.

Express Scripts, which is owned by The Cigna Group, managed 23% of prescription claims last year, second to CVS Health, which had 34% of the market.

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In North Carolina, pharmacist Brent Talley said he recently lost $31 filling a prescription for a month's supply of a weight control and diabetes drug.

To try to cushion such losses, Talley's Hayes Barton Pharmacy sells CBD products and specialty items like reading glasses, bath products, and books about local history. “But that's not going to come close to making up the loss generated by the prescription sale,” Talley said.

His pharmacy also delivers medicines packaged by the dose to Medicare patients at assisted living facilities and nursing homes. Reimbursement arrangements with PBMs for that business are more favorable than for filling prescriptions in person, he said.

When Congress added drug coverage to Medicare in 2003, lawmakers privatized the benefit by requiring the government to contract with commercial insurance companies to manage the program.

Insurers offer two options: Medicare Advantage plans, which usually cover medications, in addition to hospital care, doctor visits, and other services; as well as stand-alone drug plans for people with traditional Medicare. The insurers then contract with PBMs to negotiate drug prices and pharmacy costs with drug manufacturers and pharmacies.

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The terms of PBM contracts are generally secret and restrict what pharmacists can tell patients — for example, if they're asked why a drug is out of stock. (It took an act of Congress in 2018 to eliminate restrictions on disclosing a drug's cash price, which can sometimes be less than an insurance plan's copayment.)

The Pharmaceutical Care Management Association, a trade group representing PBMs, warned CMS repeatedly “that pharmacies would likely receive lower payments under the new Medicare Part D rule,” spokesperson Greg Lopes said. His group opposes the change.

Recognizing the new policy could cause cash-flow problems for pharmacies, Medicare officials had delayed implementation for a year before the rule took effect, giving them more time to adjust.

“We have heard pharmacies saying that they have concerns with their reimbursement,” Seshamani said.

But the agency isn't doing enough to help now, said Ronna Hauser, senior vice president of policy and pharmacy affairs at the National Community Pharmacists Association. “They haven't taken any action even after we brought potential violations to their attention,” she said.

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By: Susan Jaffe
Title: Biden Plan to Save Medicare Patients Money on Drugs Risks Empty Shelves, Pharmacists Say
Sourced From: kffhealthnews.org//article/biden-medicare-dir-fees-reform-pharmacy-cash-flow/
Published Date: Tue, 11 Jun 2024 09:00:00 +0000

Kaiser Health News

Union With Labor Dispute of Its Own Threatens to Cut Off Workers’ Health Benefits

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Phil Galewitz, KFF
Fri, 26 Jul 2024 09:00:00 +0000

The National Education Association, the nation's largest union, is threatening to cut off health insurance to about 300 Washington, D.C.-based workers on Aug. 1 in an effort to end a bitter contract dispute.

It's a tactic some private employers have used as leverage against unionized workers that has drawn scrutiny from congressional Democrats and is prohibited for state employers in California. Experts on labor law say they've never seen a union make the move against its own workers.

“This is like a man-bites-dog situation where the union is now in a position as the employer,” said Paul Clark, a professor of labor and employment relations at Penn State University. “It's not a good look for a union.”

NEA workers with pressing health needs are worried but say they won't fold. Joye Mercer Barksdale, a writer on the NEA's government relations team, said she needs coverage for a medical procedure to address atrial fibrillation, a cardiac disorder. “This is insane for the NEA to use our health benefits as a bargaining chip,” she said.

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But Barksdale said the threat isn't enough to force her to agree to an unacceptable contract. “I am not ready to give in,” she said.

The NEA Staff Organization, the union representing workers at the NEA's headquarters, launched a strike on July 5 in Philadelphia, during the union's annual delegate assembly. It was its second walkout this summer as the two parties negotiate a new contract, navigating sticking points such as wages and remote work.

In response, the NEA ended the conference early. President Joe Biden was supposed to speak at the event but withdrew, refusing to cross the picket line. The NEA on July 24 endorsed Kamala Harris for president.

On July 8, the day after the conference had been scheduled to end, the NEA locked out workers. In a letter the day before, the NEA informed its unionized workers that they would not be paid, effective immediately, and their health benefits would expire at the end of July unless a new deal were reached.

“NEA cannot allow NEASO to act again in a way that will bring such lasting harm to our members and our organization,” Kim Anderson, the NEA's executive director, wrote in the letter, obtained by KFF Health News. “We are, and have always been, committed both to our union values and to the importance of conducting ourselves as a model employer.”

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Democrats in Congress, including Sens. Sherrod Brown of Ohio and Bob Casey of Pennsylvania, introduced legislation last year to protect striking workers from losing their health benefits, after several large companies, including General Motors, John Deere, RTX (formerly Raytheon Technologies), and the maker of Kellogg's cereals, threatened to or did cut off coverage during labor disputes.

“Workers shouldn't have to choose between their family's health and a fair contract,” Brown said in a statement to KFF .

The legislation was endorsed by large labor unions including the Service Employees International Union and United Steelworkers, according to a press release from Brown's office. The NEA wasn't among them.

“This tactic is immoral, and it should be illegal,” United Steelworkers' president at the time, Thomas Conway, said in the release.

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Officials at the NEA, which represents teachers and other administrators, declined an interview request. In a statement, the organization's president, Becky Pringle, said “we are making every effort to reach an agreement as quickly as possible” with its staff union.

“As union leaders who have been on strike, we recognize the significance and impact of these important decisions on a personal and family level. We truly value our employees and look forward to continued collaboration with NEASO to develop a new contract that benefits us all,” she said.

Kate Hilts, a digital strategist who works for the NEA, said she fears losing her coverage will leave her unable to afford treatment for a rare autoimmune disease that attacks her kidneys. Her next treatment was slated for August.

“I wake up every day and can't believe this is happening,” she said. “You would expect this from an employer that is antiworker or has a terrible labor record, but I am totally flabbergasted that a labor union would do this that bills itself as pro-worker, pro-family, pro-education, and pro-children.”

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The NEA staff union has filed multiple charges with the National Labor Relations Board this year, including allegations that the NEA withheld holiday overtime pay and failed to provide information on the outsourcing of millions of dollars in bargaining unit work.

California is one of the only states that protect striking workers from losing health coverage. The state legislature passed a law in 2021 that blocks the tactic from being used against public employees and another law in 2022 that allows any striking workers who lose their insurance to immediately get heavily discounted coverage through the state's Affordable Care Act marketplace.

If they remain locked out, the NEA workers would be eligible for coverage under COBRA, a federal program that allows people who are fired or laid off to maintain their employer-sponsored insurance for 18 months.

But the coverage can be a financial hardship, as individuals often must pay the entire cost of their insurance premiums, plus a 2% administrative fee.

Another option for workers would be coverage through the Affordable Care Act marketplace, though that also could be costly. And it may be unclear how soon that coverage would begin or whether insurers would cover their existing doctors.

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“I'm hoping the NEA will be so ashamed of what they are doing that, at the very least, they will not take away our health benefits,” Barksdale said.

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By: Phil Galewitz, KFF Health News
Title: Union With Labor Dispute of Its Own Threatens to Cut Off Workers' Health Benefits
Sourced From: kffhealthnews.org/news/article/nea-national-education-association-union-threatens-health-insurance-benefit-lockout/
Published Date: Fri, 26 Jul 2024 09:00:00 +0000

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Kaiser Health News

The CDC’s Test for Bird Flu Works, but It Has Issues

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Arthur Allen and Amy Maxmen
Fri, 26 Jul 2024 09:00:00 +0000

The Centers for Disease Control and Prevention says a glitch in its bird flu test hasn't harmed the agency's outbreak response. But it has ignited scrutiny of its go-it-alone approach in testing for emerging pathogens.

The agency has quietly worked since April to resolve a nagging issue with the test it developed, even as the virus swept through dairy farms and chicken houses across the country and infected at least 13 farmworkers this year.

At a congressional hearing July 23, Rep. Brett Guthrie (R-Ky.) asked about the issue. “Boy, that rings of 2020,” he said, referring to when the nation was caught off guard by the covid-19 pandemic, in part because of dysfunctional tests made by the CDC. Demetre Daskalakis, director of the CDC's National Center for Immunization and Respiratory Diseases, responded that the agency rapidly developed a workaround that makes its bird flu test reliable.

“The tests are 100% usable,” he later told KFF , adding that the FDA studied the tests and came to the same conclusion. The imperfect tests, which have a faulty element that sometimes requires testing a sample again, will be replaced soon. He added, “We have made sure that we're offering a high-quality product.”

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Still, some researchers were unnerved by the coming four months after the government declared a worrisome bird flu outbreak among cattle. The CDC's test is the only one available for clinical use. Some researchers say its flaws, though manageable, underscore the risk of relying on a single entity for testing.

The problem came to light in April as the agency prepared to distribute its test to about 100 public labs around the country. CDC officials detected the issue through a quality control system put in place after the covid test catastrophe of 2020.

Daskalakis said the CDC's original test design was fine, but a flaw emerged when a company contracted by the agency manufactured the tests in bulk. In these tests, one of two components that recognize proteins called H5 in the H5N1 bird flu virus was unreliable, eliminating an important safeguard. By targeting the same protein twice, tests have a built-in backup in case one part fails.

The agency developed a fix to ensure a reliable result: If only one of the two parts detected H5, the test was considered inconclusive and would be run again. With the FDA's blessing, the CDC distributed the tests — with workaround instructions — to public health labs.

Kelly Wroblewski, director of infectious diseases at the Association of Public Health Laboratories, said the results of the tests have not been ambiguous, and there is no need to discard the tests.

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Still, the agency has asked a different manufacturer to remake the faulty component so that 1.2 million improved tests will be available soon, Daskalakis said. Some of the updated tests are already in stock at the CDC, but the FDA hasn't yet signed off on their use. Daskalakis declined to name the manufacturers.

Meanwhile, the outbreak has grown. Farmworkers continue to lack information about the virus and gear to protect them from it. Rural clinics may miss cases if they don't catch a person's connection to a farm and notify health officials rather than their usual diagnostic testing laboratories.

Those clinical labs remain unauthorized to test for the bird flu. Several of those labs have spent months working through analyses and red tape so that they can run the CDC's tests. As part of the licensing process, the CDC alerted them to the workaround with the current test, too.

But outside select circles, the news was largely overlooked. “I'm totally surprised by this,” Alex Greninger, assistant director of the University of Washington Clinical Virology Laboratory, told KFF Health News this week. Greninger's lab is developing its own test and has been trying to obtain CDC test kits to evaluate.

“It's not a red alarm,” he said, but he's worried that as the CDC and the FDA spend months developing and evaluating an updated test, the only one available relies on a single component. If the genetic code underlying that fragment of the H5 protein mutates, the test could give false results.

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It's not uncommon for academic and commercial diagnostic labs to make mistakes and catch them during quality control checks, as the CDC did. Still, this isn't the agency's first mishap. In 2016, well before the covid debacle, CDC officials for months directed public health labs to use a Zika test that failed about a third of the time.

The CDC caught and worked to remediate the situation far more quickly and effectively in this case. Nonetheless, the mishap raises concern. Michael Mina, chief science officer of the telemedicine company eMed.com, said diagnostic companies may be better suited to the task.

“It's a reminder that CDC is not a robust manufacturer of tests” and lacks the resources that industry can marshal for their production, Mina said. “We do not ask CDC to make vaccines and pharmaceuticals, and we do not ask the Pentagon to manufacture missiles.”

The CDC has licensed its updated test design to at least seven clinical diagnostic labs. Such labs are the foundation of testing in the U.S. But none have FDA clearance to use them.

Diagnostic labs are developing their own tests, too. But that has been slow-going. One reason is the lack of guaranteed sales. Another is regulatory uncertainty. Recent FDA guidance could make it harder for nongovernmental laboratories to issue new tests in the early phase of pandemics, said Susan Van Meter, president of the American Clinical Laboratory Association, in a July 1 letter to the FDA.

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Transparency is also critical, scientists said. Benjamin Pinsky, medical director of the clinical virology laboratory at Stanford University, said as a public agency the CDC should make its protocol — its recipe for making the test — easily accessible online.

The World Health Organization does so for its bird flu tests, and with that information in hand, Pinsky's lab has developed an H5 bird flu test suited to the strain circulating this year in the U.S. The lab published its approach this month but doesn't have FDA authorization for its broad use.

The CDC's test recipe is available in a published patent, Daskalakis said.

“We have made sure that tests are out there, and that they work,” he added.

As the CDC came under fire at the July 23 congressional hearing, Daniel Jernigan, director of the CDC's National Center for Emerging and Zoonotic Infectious Diseases, noted that testing is just one tool. The agency needs money for another promising area — looking for the virus in wastewater. Its current program uses supplemental funds, he said: “It is not in the current budget and will go away without additional funding.”

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——————————
By: Arthur Allen and Amy Maxmen
Title: The CDC's Test for Bird Flu Works, but It Has Issues
Sourced From: kffhealthnews.org/news/article/bird-flu-test-cdc-flaws/
Published Date: Fri, 26 Jul 2024 09:00:00 +0000

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KFF Health News’ ‘What the Health?’: Harris in the Spotlight

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Thu, 25 Jul 2024 18:45:00 +0000

The Host

Julie Rovner
KFF


@jrovner


Read Julie's stories.

Julie Rovner is chief Washington correspondent and host of KFF ' weekly health policy news , “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “Health Care Politics and Policy A to Z,” now in its third edition.

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As Vice President Kamala Harris appears poised to become the Democratic Party's presidential nominee, health policy in general and reproductive health issues in particular are likely to have a higher profile. Harris has long been the Biden administration's point person on abortion rights and reproductive health and was active on other health issues while serving as California's attorney general.

Meanwhile, Congress is back for a brief session between presidential conventions, but efforts in the GOP-led House to pass the annual spending bills, due by Oct. 1, have run into the usual roadblocks over abortion-related issues.

This week's panelists are Julie Rovner of KFF Health News, Stephanie Armour of KFF Health News, Rachel Cohrs Zhang of Stat, and Alice Miranda Ollstein of Politico.

Panelists

Stephanie Armour
KFF Health News


@StephArmour1

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Read Stephanie's stories.

Rachel Cohrs Zhang
Stat News


@rachelcohrs


Read Rachel's stories.

Alice Miranda Ollstein
Politico

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@AliceOllstein


Read Alice's stories.

Among the takeaways from this week's episode:

  • President Joe Biden's decision to drop out of the presidential race has turned attention to his likely successor on the Democratic ticket, Vice President Kamala Harris. At this late hour in the campaign, she is expected to adopt Biden's health policies, though many anticipate she'll take a firmer stance on restoring Roe v. Wade. And while abortion rights supporters are enthusiastic about Harris' candidacy, opponents are eager to frame her views as extreme.
  • As he transitions from incumbent candidate to outgoing president, Biden is working to frame his legacy, including on health policy. The president has expressed pride that his signature domestic achievement, the Inflation Reduction Act, took on the pharmaceutical industry, including by forcing the makers of the most expensive drugs into negotiations with Medicare. Yet, as with the Affordable Care Act's delayed implementation and results, most Americans have yet to see the IRA's potential effect on drug prices.
  • Lawmakers continue to be hung up on federal government spending, leaving appropriations work undone as they prepare to leave for summer recess. Fights over abortion are, once again, gumming up the works.
  • In abortion news, Iowa's six-week limit is scheduled to take effect next week, causing rippling problems of abortion access throughout the region. In Louisiana, which added the two drugs used in medication abortions to its list of controlled substances, doctors are having difficulty using the pills for other indications. And doctors who oppose abortion are pushing higher-risk procedures, like cesarean sections, in lieu of pregnancy termination when the mother's life is in danger — as states with strict bans, like Texas and Louisiana, are reporting a rise in the use of surgeries, including hysterectomies, to end pregnancies.
  • The Government Accountability Office reports that many states incorrectly removed hundreds of thousands of eligible people from the Medicaid rolls during the “unwinding” of the covid-19 public health emergency's coverage protections. The Biden administration has been reluctant to call out those states publicly in an attempt to keep the process as apolitical as possible.

Also this week, Rovner interviews Anthony Wright, the new executive director of the consumer health advocacy group Families USA. Wright spent the past two decades in California, working with, among others, now-Vice President Kamala Harris on various health issues.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week that they think you should read, too: 

Julie Rovner: NPR's “A Study Finds That Dogs Can Smell Your Stress — And Make Decisions Accordingly,” by Rachel Treisman.  

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Alice Miranda Ollstein: Stat's “A Pricey Gilead HIV Drug Could Be Made for Dramatically Less Than the Company Charges,” by Ed Silverman, and Politico's “Federal HIV Program Set To Wind Down,” by Alice Miranda Ollstein and David Lim. 

Stephanie Armour: Vox's “Free Medical School Won't Solve the Doctor Shortage,” by Dylan Scott.  

Rachel Cohrs Zhang: Stat's “How UnitedHealth Harnesses Its Physician Empire To Squeeze Profits out of Patients,” by Bob Herman, Tara Bannow, Casey Ross, and Lizzy Lawrence. 

Also mentioned on this week's podcast:

Credits

Francis Ying
Audio producer

Emmarie Huetteman
Editor

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To hear all our click here.

And subscribe to KFF Health News' “What the Health?” on SpotifyApple PodcastsPocket Casts, or wherever you listen to podcasts.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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Title: KFF Health News' ‘What the Health?': Harris in the Spotlight
Sourced From: kffhealthnews.org/news/podcast/what-the-health-357-kamala-harris-campaign-health-policy-july-25-2024/
Published Date: Thu, 25 Jul 2024 18:45:00 +0000

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