CMS DATA AND PRICE CMS DATA AND PRICE INFORMATION INFORMATION COLLECTION:COLLECTION:

What are the Implications?What are the Implications?

The Second Annual FDA The Second Annual FDA Regulatory Regulatory

and Compliance Symposiumand Compliance SymposiumAugust 24, 2006August 24, 2006Ann Leopold Kaplan

Assistant General CounselPharmaceutical Research and Manufacturers of America950 F Street, NW Suite 300, Washington, D.C. 20004Phone: (202) 835-3569Email: akaplan@phrma.org

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CMS’ GOALSCMS’ GOALS(as stated on website)(as stated on website)

Protect and improve beneficiary health and Protect and improve beneficiary health and satisfaction.satisfaction.

Foster appropriate and predictable payments and Foster appropriate and predictable payments and high quality care.high quality care.

Promote understanding of CMS programs among Promote understanding of CMS programs among beneficiaries, the health care community, and the beneficiaries, the health care community, and the public.public.

Promote the fiscal integrity of CMS programs and Promote the fiscal integrity of CMS programs and be an accountable steward of public funds.be an accountable steward of public funds.

Foster excellence in the design and Foster excellence in the design and administration of CMS programs.administration of CMS programs.

Provide leadership in the broader health care Provide leadership in the broader health care marketplace to improve health.marketplace to improve health.

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CMS as “Public Health CMS as “Public Health Agency”Agency”

CMS Quality Improvement RoadmapCMS Quality Improvement Roadmap ““CMS is focusing on these CMS is focusing on these

opportunities because its size and opportunities because its size and broad impact make it a public health broad impact make it a public health agency”agency”

Various initiatives on evidence reflect Various initiatives on evidence reflect this transformationthis transformation• Examples include Coverage with Evidence Examples include Coverage with Evidence

Development, Integrated Data StrategyDevelopment, Integrated Data Strategy

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NEW OPPORTUNITIES FOR NEW OPPORTUNITIES FOR DRUG INFORMATION DRUG INFORMATION

COLLECTIONCOLLECTION Expansion of Medicare Coverage Expansion of Medicare Coverage

Part D – 2006Part D – 2006 Coverage with Evidence Coverage with Evidence

Development (CED)Development (CED)

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PART D – A New Program PART D – A New Program and a New Modeland a New Model

Basics on Part D and Data Information FlowBasics on Part D and Data Information Flow• Part D is administered by private plansPart D is administered by private plans• Part D plans arrange pharmacy networks, Part D plans arrange pharmacy networks,

develop formularies, enroll beneficiaries, pay develop formularies, enroll beneficiaries, pay claimsclaims

• Plans bid each year and bid includes Plans bid each year and bid includes premium amount, benefit design, formularypremium amount, benefit design, formulary

• Plans submit data in order to obtain payment Plans submit data in order to obtain payment and for general oversightand for general oversight

• Plans are at financial risk for the benefit, but Plans are at financial risk for the benefit, but not full risknot full risk

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PART D: BASIC BENEFIT PART D: BASIC BENEFIT DESIGNDESIGN

$250 Deductible$250 Deductible 25% cost sharing up initial coverage 25% cost sharing up initial coverage

limitlimit 100% cost sharing in coverage gap 100% cost sharing in coverage gap

until spending reaches catastrophic until spending reaches catastrophic coverage threshold coverage threshold

Catastrophic Coverage – greater of Catastrophic Coverage – greater of $2/$5 copay or 5% coinsurance$2/$5 copay or 5% coinsurance

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PART D – Government PART D – Government PaymentsPayments

Premium subsidy payment - Premium subsidy payment - 74.5% subsidy74.5% subsidy

Reinsurance – 80% of Reinsurance – 80% of allowable reinsurance costs allowable reinsurance costs after catastrophic coverage after catastrophic coverage threshold triggeredthreshold triggered

Risk Corridor PaymentRisk Corridor Payment Low income subsidyLow income subsidy

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INFORMATION INFORMATION REQUESTED FROM PLANSREQUESTED FROM PLANS

Prescription Drug Event Data – Prescription Drug Event Data – Specific information, including Specific information, including claims dataclaims data

Part D Plan Reporting Part D Plan Reporting Requirements – Statistical Requirements – Statistical information and specific information and specific information, including specific information, including specific rebate reportingrebate reporting

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PART D PLANS – PART D PLANS – Prescription Drug Event Prescription Drug Event

(PDE) Data – April 12, 2005 (PDE) Data – April 12, 2005 As a condition of payment, plans must submit As a condition of payment, plans must submit

data and information. CMS uses the data: data and information. CMS uses the data: • To reconcile low income cost sharing subsidy and To reconcile low income cost sharing subsidy and

reinsurancereinsurance• To implement risk sharing through risk corridor To implement risk sharing through risk corridor

paymentspayments• So drug utilization data may be added to risk So drug utilization data may be added to risk

adjustment model for direct subsidyadjustment model for direct subsidy• To verify plan administration of True Out of Pocket To verify plan administration of True Out of Pocket

(TrOOP) Expenses – (expenses incurred by or on (TrOOP) Expenses – (expenses incurred by or on behalf of enrollees in cost sharing and coverage behalf of enrollees in cost sharing and coverage gap in order to reach catastrophic coverage)gap in order to reach catastrophic coverage)

• Program oversight and program integrityProgram oversight and program integrity

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PDE INFORMATION - Key PDE INFORMATION - Key Fields to Uniquely Identify Fields to Uniquely Identify

PDE RecordPDE Record Health insurance claim number (HICN) Health insurance claim number (HICN)

– basic beneficiary identifier in – basic beneficiary identifier in Medicare ProgramMedicare Program

Service Provider identifierService Provider identifier Prescription/Service reference number Prescription/Service reference number Date of Service (when prescription is Date of Service (when prescription is

filled)filled) Fill Number – original vs. refill Fill Number – original vs. refill

prescriptionprescription

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PDE INFORMATION - Other PDE INFORMATION - Other Prescription Related Prescription Related

InformationInformation Patient date of birth and genderPatient date of birth and gender Paid DatePaid Date Product/Service ID-NDC codeProduct/Service ID-NDC code Compounding codeCompounding code DAW/Product selection code – generic DAW/Product selection code – generic

substitution instructions or dispense as writtensubstitution instructions or dispense as written Quantity dispensedQuantity dispensed Day supplyDay supply Drug Coverage Status Code (whether covered Drug Coverage Status Code (whether covered

under Part D or not or by PDP)under Part D or not or by PDP) Out of Network codeOut of Network code Catastrophic Coverage CodeCatastrophic Coverage Code

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PDE INFORMATION – Costs PDE INFORMATION – Costs that Qualify for Paymentthat Qualify for Payment

Ingredient Cost Paid – the amount the plan Ingredient Cost Paid – the amount the plan paid the pharmacy for the drugpaid the pharmacy for the drug

Dispensing fee paidDispensing fee paid Amount attributed to sales taxAmount attributed to sales tax Gross drug costs below out of pocket thresholdGross drug costs below out of pocket threshold Gross drug costs above out of pocket thresholdGross drug costs above out of pocket threshold Patient pay amount (not reimbursed by third Patient pay amount (not reimbursed by third

party)party) Other TrOOP amount (qualified payments by Other TrOOP amount (qualified payments by

third parties that count toward TrOOP)third parties that count toward TrOOP)

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PDE – OTHER PDE – OTHER INFORMATION INFORMATION

Low Income cost sharing subsidy Low Income cost sharing subsidy amountamount

Patient liability reduction due to Patient liability reduction due to other Payor Amountother Payor Amount

Covered plan paid amountCovered plan paid amount Non-covered plan paid amountNon-covered plan paid amount

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PART D PLAN REPORTING PART D PLAN REPORTING REQUIREMENTSREQUIREMENTS

Rebate reporting requirementRebate reporting requirement Rebates summarized for each drug, rolled up to Rebates summarized for each drug, rolled up to

include multiple strengths, package sizes, dosage include multiple strengths, package sizes, dosage formulations or combinationsformulations or combinations

All other price concessions, including discounts, All other price concessions, including discounts, value adds such as gift-in kind or other programs value adds such as gift-in kind or other programs (e.g., coupon or disease management programs (e.g., coupon or disease management programs specific to a Part D sponsor) are reported specific to a Part D sponsor) are reported separatelyseparately

Note: Negotiated Prices available to enrollee are Note: Negotiated Prices available to enrollee are required to take into account rebates, discounts required to take into account rebates, discounts and other price concessions but do not necessarily and other price concessions but do not necessarily have to reflect all manufacturer price concessionshave to reflect all manufacturer price concessions

According to CMS, manufacturer rebate may be According to CMS, manufacturer rebate may be used in negotiated prices, to lower premiums or used in negotiated prices, to lower premiums or deductibles or fill in the gapdeductibles or fill in the gap

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OTHER PART D OTHER PART D REPORTING REPORTING

REQUIREMENTSREQUIREMENTS Enrollment/Enrollment/

DisenrollmentDisenrollment ReversalsReversals Medication Therapy Medication Therapy

Management ProgramsManagement Programs Generic Dispensing Generic Dispensing

RateRate GrievancesGrievances P&T committeeP&T committee Transition Transition Prior Authorization, Prior Authorization,

Step Audits, Non-Step Audits, Non-Formulary exceptionsFormulary exceptions

Tier ExceptionsTier Exceptions

AppealsAppeals Call Center MeasuresCall Center Measures OverpaymentsOverpayments Pharmaceutical Pharmaceutical

Manufacturer rebates, Manufacturer rebates, discounts, and other discounts, and other price concessionsprice concessions

Pharmaceutical Pharmaceutical Manufacturer Manufacturer Access/Performance Access/Performance Rebates Received by Rebates Received by PharmaciesPharmacies

Licensure & Solvency, Licensure & Solvency, Business transactions, Business transactions, financial requirementsfinancial requirements

Drug Benefit AnalysisDrug Benefit Analysis

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HHS MOVING MEDICAL HHS MOVING MEDICAL INNOVATIONS FORWARD – INNOVATIONS FORWARD – New Initiatives from HHS New Initiatives from HHS

(January 2005)(January 2005) Collaboration between FDA and CMS includes Collaboration between FDA and CMS includes

• Parallel Review at the request of the applicantParallel Review at the request of the applicant• Humanitarian device exemptionsHumanitarian device exemptions• Summaries of Safety and EffectivenessSummaries of Safety and Effectiveness• Post market surveillance data-collection of new Post market surveillance data-collection of new

Part D information could provide FDA, CMS, Part D information could provide FDA, CMS, industry and the public with invaluable information industry and the public with invaluable information regarding the use of medical products and safety, regarding the use of medical products and safety, effectiveness and the safety and effectiveness of effectiveness and the safety and effectiveness of off-label use.off-label use.

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CMS MEDICARE CMS MEDICARE PRESCRIPTION DRUG PRESCRIPTION DRUG

DATA STRATEGYDATA STRATEGY Announced in April 2005Announced in April 2005 Improving Evidence for Patient Care Improving Evidence for Patient Care

Through the Medicare Prescription Through the Medicare Prescription Drug BenefitDrug Benefit

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CMS MEDICARE CMS MEDICARE PRESCRIPTION DRUG PRESCRIPTION DRUG

DATA STRATEGYDATA STRATEGYPart D electronic systems will help provide:Part D electronic systems will help provide:

““better evidence on the experience of people better evidence on the experience of people with Medicare in using medications, with Medicare in using medications, including better information on unusual including better information on unusual events and on the impact of drugs on events and on the impact of drugs on avoiding disease complications and their avoiding disease complications and their associated cost. With better evidence, associated cost. With better evidence, doctors and patients can get greater benefits doctors and patients can get greater benefits from Medicare drug coverage, while from Medicare drug coverage, while reducing the overall costs on health care.”reducing the overall costs on health care.”

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CMS MEDICARE CMS MEDICARE PRESCRIPTION DRUG PRESCRIPTION DRUG

DATA STRATEGYDATA STRATEGY New opportunities for CMS to learnNew opportunities for CMS to learn

• Drug utilization patterns and adverse eventsDrug utilization patterns and adverse events• Avoidance of disease complicationsAvoidance of disease complications• Consequences for other Medicare costs that are Consequences for other Medicare costs that are

associated with different ways drug might be used associated with different ways drug might be used by Medicare beneficiariesby Medicare beneficiaries

Information could add to evidence developed Information could add to evidence developed through existing prospective research through existing prospective research studies, including randomized controlled studies, including randomized controlled trials, registries and other clinical studies.trials, registries and other clinical studies.

Acknowledges limitations and opportunities.Acknowledges limitations and opportunities.

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CMS MEDICARE CMS MEDICARE PRESCRIPTION DRUG PRESCRIPTION DRUG

DATA STRATEGYDATA STRATEGY Public-private partnershipPublic-private partnership Evidence on important questions on the use, risks, Evidence on important questions on the use, risks,

and benefits of certain drug therapies can be and benefits of certain drug therapies can be developed by linking relevant Part D data to hospital, developed by linking relevant Part D data to hospital, physician, and other medical utilization data physician, and other medical utilization data (Medicare Part A and B data).(Medicare Part A and B data).

Evidence could be developed as part of Evidence could be developed as part of “collaborative efforts for improved post-market “collaborative efforts for improved post-market surveillance of FDA-approved drugs and devices”.surveillance of FDA-approved drugs and devices”.

Evidence could be developed about drug use in a Evidence could be developed about drug use in a broader range of conditions, including more detailed broader range of conditions, including more detailed evidence on particular types of patients, including evidence on particular types of patients, including off-label uses.off-label uses.

Evidence could be developed on the effect of Evidence could be developed on the effect of formularies and other features of drug coverage and formularies and other features of drug coverage and beneficiary support programs on the outcomes and beneficiary support programs on the outcomes and overall costs of care.overall costs of care.

PBM data on patients under 65 could complement PBM data on patients under 65 could complement Medicare claims data.Medicare claims data.

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COVERAGE WITH COVERAGE WITH EVIDENCE DEVELOPMENT EVIDENCE DEVELOPMENT

INITIATIVEINITIATIVE January 2005 National Coverage Determination (NCD) January 2005 National Coverage Determination (NCD)

for Anticancer Therapies for colorectal cancer for certain for Anticancer Therapies for colorectal cancer for certain products in clinical trials sponsored by NCIproducts in clinical trials sponsored by NCI

January 2005 NCD for Implantable Defibrillators January 2005 NCD for Implantable Defibrillators requiring registry maintenance; ICD registry requires requiring registry maintenance; ICD registry requires collection of patient identifying information, certain collection of patient identifying information, certain history and clinical characteristics, medications, facility history and clinical characteristics, medications, facility and provider information, ICD indicators, device and provider information, ICD indicators, device information, in-hospital complicationsinformation, in-hospital complications

April 7, 2005: CMS released Draft Guidance on Factors April 7, 2005: CMS released Draft Guidance on Factors CMS Considers in Making a Determination of Coverage CMS Considers in Making a Determination of Coverage with Evidence Development (CED Guidance)with Evidence Development (CED Guidance)

July 14, 2005: CMS issued a fact sheet with Q&A on July 14, 2005: CMS issued a fact sheet with Q&A on responses to stakeholder feedback. 65 organizations responses to stakeholder feedback. 65 organizations filed comments.filed comments.

July 12, 2006: CMS issued Guidance on National July 12, 2006: CMS issued Guidance on National Coverage Determinations with Data Collection as a Coverage Determinations with Data Collection as a condition of coverage.condition of coverage.

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CED GUIDANCE CED GUIDANCE WHAT IS THIS?WHAT IS THIS?

The purpose of CED is to “generate data on The purpose of CED is to “generate data on the utilization and impact of the item or the utilization and impact of the item or service evaluated in the NCD, so that service evaluated in the NCD, so that Medicare can a) document the Medicare can a) document the appropriateness of use of that item or service appropriateness of use of that item or service in Medicare beneficiaries under current in Medicare beneficiaries under current coverage; b) consider future changes in coverage; b) consider future changes in coverage for the item or service; c) generate coverage for the item or service; c) generate clinical information that will improve the clinical information that will improve the evidence base on which providers base their evidence base on which providers base their recommendations to Medicare beneficiaries recommendations to Medicare beneficiaries regarding the item or service.”regarding the item or service.”

Section 731 of MMA required CMS to issue Section 731 of MMA required CMS to issue factors considered in making NCDs of whether factors considered in making NCDs of whether an item or services is reasonable and an item or services is reasonable and necessary based on FDA’s good guidance necessary based on FDA’s good guidance practices.practices.

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CMS GOALS IN DRAFT CMS GOALS IN DRAFT CED GUIDANCECED GUIDANCE

Linking coverage with evidence Linking coverage with evidence development potential to improve development potential to improve health outcomeshealth outcomes

CED will enable coverage to be CED will enable coverage to be provided where insufficient dataprovided where insufficient data

Linkage of coverage to data Linkage of coverage to data collection ensures care is reasonable collection ensures care is reasonable and necessaryand necessary

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REVISED CED GUIDANCE – REVISED CED GUIDANCE – 2 Approaches to CED2 Approaches to CED

Coverage with Appropriateness Coverage with Appropriateness Determination (CAD) – registries Determination (CAD) – registries requiredrequired

Coverage with Study Participation Coverage with Study Participation (CSP) – research setting required(CSP) – research setting required

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REVISED CED GUIDANCE – REVISED CED GUIDANCE – CAD Used: CAD Used:

If the item or service should be restricted to If the item or service should be restricted to patients with specific conditions and criteria.patients with specific conditions and criteria.

If uses of the item or service should be If uses of the item or service should be restricted to providers with specific restricted to providers with specific credentials or training.credentials or training.

If a concern exists among clinical thought If a concern exists among clinical thought leaders that substantial opportunities exist for leaders that substantial opportunities exist for misuse of the item or servicemisuse of the item or service

If the coverage determination significantly If the coverage determination significantly changes how providers manage patients changes how providers manage patients utilizing the item or service.utilizing the item or service.

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REVISED CED GUIDANCE – REVISED CED GUIDANCE – CED Registry RequirementsCED Registry Requirements Qualified scientific oversightQualified scientific oversight Tested and validated data collection Tested and validated data collection

methodsmethods Adequate patient safety and Adequate patient safety and

monitoringmonitoring Quality assurance and data protectionQuality assurance and data protection Appropriate human subjects protectionAppropriate human subjects protection

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REVISED CED GUIDANCE – REVISED CED GUIDANCE – CSP Uses Include:CSP Uses Include:

When available evidence might not include When available evidence might not include outcomes relevant to Medicare beneficiariesoutcomes relevant to Medicare beneficiaries

Available research did not adequately Available research did not adequately address risks and benefits of off-label and address risks and benefits of off-label and other anticipated uses of a drug, biologic, other anticipated uses of a drug, biologic, device or servicedevice or service

Available research may not include patient Available research may not include patient types prevalent in Medicaretypes prevalent in Medicare

Insufficient published research to support a Insufficient published research to support a reasonable and necessary determinationreasonable and necessary determination

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ACCESS TO CMS’ DATA – ACCESS TO CMS’ DATA – Proposal RequiredProposal Required

Describes how the project will improve the Describes how the project will improve the quality of care for Medicare beneficiaries or quality of care for Medicare beneficiaries or the administration of the Medicare programthe administration of the Medicare program

Provides literature reviewProvides literature review Describes the methods with definitions of Describes the methods with definitions of

outcomes, files, and variables neededoutcomes, files, and variables needed Provides an analytic planProvides an analytic plan Describes the human subjects to be applied, if Describes the human subjects to be applied, if

relevantrelevant Lists the qualifications of key personnelLists the qualifications of key personnel Provides a work plan and a dissemination planProvides a work plan and a dissemination plan Includes a provision for final report to CMSIncludes a provision for final report to CMS

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ACCESS TO CMS’ CED ACCESS TO CMS’ CED DATA – DATA –

Data Use AgreementData Use Agreement Identity of custodian of dataIdentity of custodian of data Declaration that the protocol is Declaration that the protocol is

accurateaccurate Prohibits sale or granting access to Prohibits sale or granting access to

data without authorizationdata without authorization Defines termination dateDefines termination date

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CMS COLLECTION OF CMS COLLECTION OF PRICE DATA PRICE DATA

Medicare Part D – Outpatient Medicare Part D – Outpatient prescription drugsprescription drugs• Negotiated Price DataNegotiated Price Data• Rebate and other price concession dataRebate and other price concession data• Cost dataCost data

Medicare Part D - ConfidentialityMedicare Part D - Confidentiality• Negotiated Prices on Plan Finder Negotiated Prices on Plan Finder

WebsiteWebsite• Other data confidentialOther data confidential

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CMS COLLECTION OF CMS COLLECTION OF PRICE DATAPRICE DATA

Medicare Part BMedicare Part B• Average Sales Price (ASP) which is the Average Sales Price (ASP) which is the

manufacturers’ sales to all purchasers manufacturers’ sales to all purchasers (with certain exemptions), net of (with certain exemptions), net of discounts, divided by the total number discounts, divided by the total number of units of such drug or biological sold of units of such drug or biological sold by the manufacturer during the quarterby the manufacturer during the quarter

• ASP is reported but not actual sales ASP is reported but not actual sales data not reporteddata not reported

• ASP data is kept confidentialASP data is kept confidential

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CMS COLLECTION OF CMS COLLECTION OF PRICE DATAPRICE DATA

MedicaidMedicaid• Average Manufacturer Price (AMP) – the average Average Manufacturer Price (AMP) – the average

price paid to manufacturers by wholesalers for price paid to manufacturers by wholesalers for the retail class of trade. After January 1, 2007 the retail class of trade. After January 1, 2007 under Deficit Reduction Act of 2005 (DRA), under Deficit Reduction Act of 2005 (DRA), prompt pay discounts will be removed from prompt pay discounts will be removed from calculation.calculation.

• AMP and Best Price are reported quarterlyAMP and Best Price are reported quarterly• Under DRA, separate reporting of prompt pay Under DRA, separate reporting of prompt pay

discountsdiscounts• Under DRA, separate reporting of nominal pricesUnder DRA, separate reporting of nominal prices• Actual sales data not reportedActual sales data not reported• DRA requires CMS to post AMPs on a websiteDRA requires CMS to post AMPs on a website

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Part DPrice

Information

ASP

AMP

ClinicalTrial Data

Registry Data

Part A Data

Part B Data

Part D Outpatient

Prescription Data

CMS