USA Law and Practice Contributed by: Daniel Kracov, David Marsh and Alice Ho, Arnold & Porter
• Part D (the Medicare drug benefit, which has pro- vided broad coverage for pharmacy-dispensed oral drugs since 2006); or • Part A (Medicare’s inpatient benefit, which covers drugs provided as part of covered inpatient hospi- tal stays and in certain other inpatient settings). The second-largest healthcare programme today – accounting for roughly 18% of US health spending – is the Medicaid programme, which is a joint fed- eral–state programme providing coverage for certain low-income individuals (with the specific eligibility criteria varying by state). Medicaid is run chiefly by states, with federal government oversight, and state Medicaid programmes generally provide broad cov- erage for prescription drugs. Medicaid programmes have sometimes imposed on high-cost drugs cover- age restrictions that arguably conflict with Medicaid’s statutory obligations. Under the Trump administration, there have been significant cuts to both the Medicare and Medicaid programmes. 8.4 Cost-Benefit Analyses The process and evidence that US payors use to make decisions about pharmaceuticals and medical device coverage varies widely by payor (and is not always entirely transparent). These variations can include: • the criteria considered appropriate for evaluation (eg, whether a product’s cost or cost-effectiveness is taken into account in coverage decisions); • the scientific rigour of the evidence considered, and the weight placed on the types of evidence considered; • the decision-making body and the processes for making coverage decisions; and • the legal standards that apply to the coverage decision-making process and the resulting pack- age of covered products and services. Many organisations are engaged in developing value- assessment tools of various sorts, and the CMS has experimented with outcome-based models. Essential- ly, these tools are designed to help payors, healthcare providers and patients assess the outcomes of com- peting pharmaceuticals on a systematic basis and
thereby reach conclusions about their value in a more systematic and rigorous way than is currently usual. 8.5 Regulation of Prescriptions and Dispensing by Pharmacies Pharmacists are paid for dispensing prescriptions by the patient’s insurer (assuming the patient is insured and the product is covered) and the patient. The cir- cumstances in which pharmacists may dispense a substitute for the prescribed product without obtain- ing the prescriber’s authorisation are governed by state law. State laws on this issue can vary but, in gen- eral, they permit pharmacists to substitute a product approved by the FDA as a generic equivalent for the prescribed product (unless the prescription specifi- cally states “dispense as written” or a similar phrase indicating no substitution). There has also been a recent regulatory focus and extensive litigation relating to the continued, large- scale pharmacy and outsourcing facility compounding of approved weight loss and other drugs in the USA, a practice that was permitted only when the commer- cially available products were in shortage. During the past several years, the standards for per- mitting pharmacists to substitute a “biosimilar” prod- uct for a prescribed biological product have been a topic of considerable debate. The provisions of these laws vary but often only permit biosimilar pharmacy- level substitution if: • the substituted product has been designated as “interchangeable” with the prescribed biological product by the FDA; • the prescriber and the patient are both notified of the substitution; and • the pharmacist maintains records of the substitu- tion.
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