Impact of the AMP Final Rule on Class of Trade & Contracting
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1 Impact of the AMP Final Rule on Class of Trade & Contracting March 2016 Helping pharmaceutical manufacturers navigate the complex GP landscape Katie Lapins
2 Disclaimer This presentation is provided for informational, educational, and discussion purposes only. Nothing in this material should be construed as management or legal advice. You should not act or rely on any information contained in this presentation without first seeking the advice of legal counsel. 2
3 Topics Changes to Definitions 5i Products, NGD, and Methodology Considerations Expansion to Puerto Rico & US Territories What s In and What s Out in AMP Line Extensions 3
4 Changes to Definitions: Retail Community Pharmacy (RCP) ACA Proposed Rule Final Rule 4 An independent, chain, supermarket or mass merchandiser pharmacy that dispenses medications to the general public at retail prices Specifically excluded mail order, nursing home/ltc, hospitals, clinics, charitable/not-forprofit, & gov t pharmacies and PBMs Included specialty, home infusion & home health providers/ pharmacies Include specialty, home infusion, & home health providers/ pharmacies to the extent they meet the definition of an RCP
5 Retail Community Pharmacies 4 Points to consider: Is the entity an independent, chain, supermarket, or mas merchandiser pharmacy? Is it licensed by the state? Does it dispense to the general public? Does it dispense at retail prices? 5
6 Specialty Pharmacies Common Definition: Dispenses high cost self-administered, infused and oral medications to patients undergoing intensive therapies for chronic and complex illnesses Often provide medications through overnight mail/delivery and/or home health type of service Similar issue with Home Health Care and Home Infusion Pharmacies 6
7 Determination of an RCP 7 Does the pharmacy focus primarily on specialty products? Are they equipped for products requiring special handling, storage, or distribution requirements? Does the pharmacy handle patient care, disease management, etc. for those with chronic and/or complex conditions? Does the pharmacy act as a hub for payment/ financial assistance? Reasonable assumptions
8 Changes to Definitions: Wholesaler ACA Proposed Rule Final Rule A drug wholesaler that is engaged in wholesale distribution of prescription drugs to RCPs, including but not limited to manufacturers, repackers, distributors, own-label distributors, private label distributors, jobbers, brokers, warehouses, independent wholesale drug traders and RCPs that conduct wholesale operations. Included in AMP are sales to wholesalers for drugs distributed to RCPs and RCPs that purchase directly from the manufacturer Included in AMP are sales to wholesalers for drugs distributed to RCPs and sales to other manufacturers who act as wholesalers for drugs distributed to RCPs 8
9 Manufacturer as a Wholesaler For Authorized Generics, understand arrangement between primary and secondary manufacturer May need to have 2 separate COTs for wholesaler since definition for AMP/BP may be different than for ASP &/or NFAMP Reasonable assumptions 9
10 5i Products Proposed Rule required 5i determination using the FDA Routes of Administration Final Rule leaves the determination to the manufacturer Alternative AMP is to be used when 70% or more of sales units are entities other than RCPs or wholesalers for drugs going to RCPs monthly determination Reasonable assumptions 10
11 Non-5i Products NGD Through RCPs Final Rule Preamble states there is no basis for a regulation that allows the use of the 5i methodology for an oral drug No clear guidance how to calculate AMP if a non-5i product does not have sales through RCPs Reasonable assumptions 11
12 US Territories Final Rule changed definition of the United States, effective April 1, 2017, to include the 50 states, District of Columbia, and the US Territories (Puerto Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands, American Samoa) 12
13 What s In, What s Out Class of Trade* RCP AMP 5i AMP Wholesalers Include Include Manufacturers TBD Include RCPs Include Include Physicians, outpatient facilities, clinics Exclude Include Hospitals, LTC, nursing homes, hospice Exclude Include Mail Order Exclude Include PBM, HMO, MCO, Insurers Exclude Include Specialty Pharmacies, Home Health TBD Include Government & Prisons Exclude Exclude Charitable/Non-Profit Exclude Exclude Patients Exclude Exclude 13 * Not all COTs are listed here
14 Line Extensions ACA provided for an alternative rebate calculation for a line extension of an existing oral solid dosage form of an innovator drug Proposed Rule included more than new formulations and required sharing of pricing data between companies Final Rule didn t finalize this! 14
15 Line Extension Determination Include extended release formulations New formulation marketed by the manufacturer or an affiliate Authorized generic of a brand name if it s a line extension Reasonable assumptions 15
16 16 Recommendations
17 Recommendations/Changes Product Master Fields to identify the following: Authorized Generics 5i Products Non-5i but NGD Line Extension Any product with an inter-manufacturer relationship 17
18 Recommendations/Changes (cont d) Review Calculation Methodology: COT inclusions/exclusions Individual COTs Determination of Retail and NGD Sales Inclusion of US Territories (April 2017) 18
19 Recommendations/Changes (cont d) Review contracting strategies Review and update reasonable assumptions, Archive policies, procedures, assumptions and other methodology-related documents for historical calculations Update policies, procedures, work instructions, job descriptions be sure updates are consistent Ensure systems are capable of handling multiple AMP methodologies, if required Ensure systems can maintain historical methodologies and COT assignments 19
20 20 Questions
21 Katie Lapins Office: Cell:
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Aetna Whole Health SM Accountable Care Network Choice POS II - $1,500 Plan Schedule of Benefits If this is an ERISA plan, you have certain rights under this plan. Please contact your employer for additional