Fireside Chat Retreat in Minneapolis, MN Tackles Inflation Reduction Act's Adverse Impact on Patient Care

By: Brandon M. Macsata, CEO, ADAP Advocacy & Ranier Simons, ADAP Blog Guest Contributor

ADAP Advocacy hosted its Health Fireside Chat retreat in Minneapolis, Minnesota, among key stakeholder groups to discuss the adverse impact on patient care being caused by the Inflation Reduction Act (IRA). The Health Fireside Chat was held from Thursday, June 12th, to Saturday, June 14th. An analysis of the IRA's drug price controls—including its pill penalty provisions, challenges community pharmacies are facing, more restrictive drug formularies increasing, non-medical switching, and patients absorbing greater costs due to shifts from co-pays to co-insurance—were all evaluated and discussed by the 24 diverse stakeholders.

Photo Source: Getty Images

The IRA discussion was designed to capture key observations, suggestions, and thoughts about how best to address the challenges being discussed at the Health Fireside Chat. The following represents the attendees:

• Meg Beaven, Senior Director, Rational 360
• Ninya Bostic,  National Policy & Advocacy Director, Johnson & Johnson
• Grant Cale, Senior Director, Alliance Development Lead, U.S. Policy and Government Affairs, Bristol Myers Squibb
• Tori Cooper, Director of Community Engagement, Human Rights Campaign
• Jeffery S. Crowley, Director of the Center for HIV and Infectious Disease Policy at the O’Neill Institute
• Olivier Viel, Associate Director, Policy and Government Affairs, Merck
• Jazlyn Gallego, Policy and Advocacy Manager, Cancer Support Community
• Max Grechko, Associate Director, Strategic Alliances and Issue Advocacy, Novartis
• Rick Guasco, Editor-in-Chief, Positively Aware
• Connie Jorstad, Director of Government Relations, ViiV Healthcare
• Patrick Ingram, Implementation Project Manager, Midwest AETC
• Kristy Kibler, CEO, Lupus Colorado
• Amanda Kornegay, Owner, Kornegay Consulting, LLC
• Jen Laws, President & CEO, Community Access National Network
• Darnell Lewis, Paramedic Crew Chief & Patient Advocate
• Brandon M. Mascata, CEO, ADAP Advocacy
• Heidi Mesik, Senior Director, PhRMA
• Michiel Peters, Head of Advocacy Initiatives, Global Coalition on Aging
• Kalvin Pugh, Director of State Policy, 340B, Community Access National Network
• Ranier Simons, Consultant, ADAP Advocacy
• Jason Sterne, Director, Policy Advocacy and Alliances, Gilead
• Scott Suckow, Senior Consultant, Perry Communications Group
• Matt Toresco, CEO, Archo Advocacy
• Monique Whitney, Executive Director, Pharmacists United for Truth and Transparency

To level set and provide background for discussions, attendees are sent suggested readings in advance. The following are just a few from the thorough list provided for this session:

• The Inflation Reduction Act (IRA): Impact on Medication Pricing, Spending, Affordability, and Access – Analysis by Pioneer Institute
• Independent Pharmacies Reluctant to Stock Drugs in Medicare Negotiation Program, New Survey Shows – Survey by the National Community Pharmacy Association
• Executive Summary: Impact of the IRA on Patient Access & Discovery of Small Molecule Drugs – Report by the Global Coalition on Aging
• CMS Draft Guidance Creates Regulatory Vacuum in 340B Drug Pricing – Blog by Travis Manint, Community Access National Network
• How the IRA's Part B Coinsurance Inflation Adjustments Can Raise Seniors' Drug Costs – Analysis by Dr. Adam Fein, Drug Channels Institute

ADAP Advocacy is pleased to share the following brief recap of the Health Fireside Chat.

The overarching theme of the discussions was how varying aspects of issues, directly or indirectly related to the IRA, can affect patients and their access to medical care. Drug pricing was a significant thread throughout the gathering. Participants expressed a consensus that the pricing of pharmaceuticals is a complex system involving many players, with patients often being stuck in the middle or positioned at the bottom. High prescription drug expenditures are partially the result of multiple bad actors making profits at the expense of the masses who need drugs for their care. The discussion largely mirrored the conclusions reached by Kenneth E. Thorpe in his June 2024 piece in Health Affairs, "Penny Wise And Pound Foolish: IRA Impact On Chronic Disease Costs In Medicare."

In-depth dialogue occurred surrounding the IRA's effects on independent, community pharmacies. These pharmacies, in particular, routinely operate within thin margins or sometimes at a loss. Due to issues such as under-reimbursement, many pharmacies are already closing. The IRA’s Maximum Fair Price (MFP) key provision for Medicare drug price negotiation has the potential to harm pharmacies further. The MFP could negatively impact pharmacies by lowering reimbursement rates, further causing financial strain. Discourse revealed that many independent pharmacies are quietly already stating they will not be stocking many of the medications subject to the MFP because they cannot afford to. Independent pharmacies are the lifeblood of communities where larger pharmacies are not present. Closing due to financial strain would rob citizens of auxiliary services and preventative care services, in addition to drug access.

Photo Source: National Community Pharmacy Association

The conflict involving pharmacy benefit managers (PBMs) and their pharmacies was also discussed. There has been an uptick in state legislation aimed at preventing PBMs from owning and operating pharmacies in the states where they do business. Vertical integration is a problem as it allows pharmacy steering and predatory independent pharmacy contracting. When PBMs own and operate pharmacies, they manipulate pricing to their advantage, steering patients to their networks at higher costs. They also offer independent pharmacies less favorable contracts, lower reimbursements, and higher fees, among other disadvantages. Attendees gleaned from the discourse that vertical integration is considered self-dealing, which is a form of fraud. It is not ethical for a health plan to own a pharmacy, just as it is not ethical for a PBM to own one.

Moreover, under the IRA, if pharmacies choose not to participate in the MFP under the Medicare Drug Price Negotiation program, they are, in essence, excluded from participating in Medicare Part D for the drugs in question. Independent pharmacies are not in favor of the new IRA mechanism because their cash flow would be split between reimbursement from CMS and refunds from drug manufacturers to make up the difference. Pharmacies would have to suffer delays in cash flow waiting to be made whole, with the possibility of not being made whole at all. The conversation specifically acknowledged that CMS is acting as a payer without any understanding of care delivery for multiple disease states.

During the period spent discussing strategy and solutions, the underlying focus was on messaging. The concern was how to effectively convey the right message to the public and into the marketplace. Some attendees suggested that the pharmaceutical industry should be more proactive in generating opposition to the current administration. It was acknowledged that “big pharma” has taken steps, especially through extending relationships with advocacy groups. However, there remains a notion that the pharmaceutical industry needs to embrace the concept that “dead people do not buy medications.” This means that they should embrace concerted efforts to protect patients and patient access, not just from a position of altruism but as a sensible business strategy. The reality is, as Dr. Adam J. Fein of the Drug Channels Institute has pointed out, "a growing number of Part B drugs now have inflation-adjusted coinsurance rates that are rising, not falling...[and] in many cases, the rate dips temporarily before snapping back to the standard 20%." It begs the question: Are patients paying more?

Photo Source: Drug Channels Institute

Discussions of messaging also zeroed in on patient perception. The issues surrounding the IRA and its various aspects are complex, even for those well-versed in the issue. Attendees emphasized the importance of engaging patients by creating messaging that is simple yet resonates with their humanity in ways they understand. The price is being conflated with out-of-pocket costs, and messaging needs to highlight how the IRA can increase out-of-pocket costs for patients.

The Cancer Support Community (CSC) has developed patient-centered principles to help guide its advocacy work, which is available online. These patient-centered principles are also included in CSC's sign-on letter on the EPIC Act, to which ADAP Advocacy also signed.

With so many of the IRA's targeted drug price controls falling on chronic health conditions and rare diseases, such as cancer and HIV, they have the potential to fuel already exacerbated health disparities among medically underserved communities. The sole focus on "price" largely ignores the money saved by treating these conditions with life-altering and life-saving therapeutics. Sadly, proponents of these anti-patient drug price controls—including several groups financed by Arnold Ventures' special interests efforts pushing harmful state drug affordability boards, or PDABs—leverage potentially harmful metrics. Among them is the dehumanizing quality-adjusted life years (QALYs). 

Suggestions included campaign-style messaging that utilizes both traditional and non-traditional media to educate patients by making the message more personal. Presenting the public with stories that explain how specific policies directly affect aspects of their daily lives is a way to empower patients and transform the patient community into a voting bloc. Populist patient-centered messaging and actions promote community building to engage policymakers as well as empower citizens. 

Going forward, discussions also emphasized the importance of finding ways to navigate within the confines of the challenging current administration, as its operations are adversarial, unpredictable, and unprecedented. The consensus indicated that an effective way to do this is to make “new friends.” This means engaging with untapped entities, such as labor unions, insurance commissions, Ryan White service providers, and disability groups. Many entities that potentially could be drastically affected by the IRA and other issues are unaware of their risk of adverse outcomes. Forging new avenues of communication with groups like these is a way to create infrastructure that can effect change.

Woven throughout the day's policy analysis was recognition that patient advocacy groups need to push back harder against the fallacy that their advocacy efforts aren't genuine simply because they accept financial support from drug manufacturers. Ongoing attempts to discredit patient advocacy by faux news outlets, such as the 340B Report, ignore the realities that patients and drug manufacturers often have shared interests, and that the financial support provided by industry acknowledges those values. It is also disingenuous to have patients living with chronic health conditions and rare diseases be faulted by paternalistic critics who aren't patients themselves.

ADAP Advocacy would like to publicly acknowledge and thank Jen Laws, Heidi Mesik, Michiel Peters, Jazlyn Gallego, and Matt Toresco for co-facilitating this critically important discussion.

Additional Fireside Chats are planned for 2025 in Atlanta (September).

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

Kudos to Janssen for its 2017 U.S. Transparency Report

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

On March 20th, Janssen Pharmaceutical Companies of Johnson & Johnson hosted a stakeholder meeting in Washington, DC to unveil its "2017 Janssen U.S. Transparency Report" and also promote a dialogue on value, access, and pricing transparency. It is the second time the company has released the comprehensive report, and as such the ADAP Advocacy Association extends its kudos to them for doing so. Patient advocacy groups are often left out of these conversations, yet patients are the people who have the most to gain from transparency. Numerous disease patient advocacy groups were also in attendance, including groups representing people living with diabetes, rheumatoid arthritis, and various mental health conditions.

(Editor's Note: This blog is not intended to be an endorsement of any product made by Janssen Pharmaceutical Companies of Johnson & Johnson but rather acknowledge their efforts to educate stakeholders on their corporate responsibility)

The transparency report highlights four key areas, including Janssen's ongoing investments in new medicines, value assessments, pricing and patient access, and resources for patients. An increasing amount of the public policy discussion has focused on drug pricing, so the information conveyed by Janssen in the report helps patient advocacy groups like ours (and others) refine their areas of interest. It is also important to gain insight into Janssen's work to develop new medicines considering the complexities of the current health care system.

The purpose behind the transparency report is spelled out in a letter from the company leaders, Jennifer Taubert, company group chairman, and Anastasia G. Daifotis, MD, chief scientific officer:

"We want this information to be useful to all our stakeholders: patients, families, caregivers, and advocates, who are asking questions about out-of-pocket costs for medicines and what resources are available to help them; health care professionals, who are increasingly being asked to consider the overall value of the medicines they prescribe; policymakers, who are working to make policy changes to help their constituents get the care they need; and others in the health care system, like payers, who consider value and price information when they make decisions about coverage and access."

The report can be downloaded online at Janssen.com/2017ustransparencyreport.

The stakeholder meeting also featured an interactive panel discussion on Innovation, Pricing & Patient Access, as well as another one on Moving to a Value-Based Approach. Each included representatives from Janssen Pharmaceutical Companies, but also independent experts who were asked to share their insight. The two panels offered good analysis on the oddities of the current health care system, and some tough questions from the audience about what needs to change.

The panels discussed numerous issues, including medication adherence, rebates, insurance discriminatory design, valued-based contracting, importation, among others.

Adam Fein, CEO of the Drug Channels Institute, outlined the problem with the "gross-to-net bubble," as he phrased it. For example, whereas the average net prices offered by Janssen declined by 4.6% last year, it is unlikely the reductions were passed along to consumers. Interestingly too, Fein noted that 9 out of 10 drugs on the market are relatively inexpensive with low-cost generics available. However, it is the 1:10 specialty drugs that are the true cost-drivers.

Dan Leonard, President of the National Pharmaceutical Council, addressed the question over value by noting sick people are currently subsidizing the healthy people. Leonard's analysis echoed the recent remarks by U.S. Food & Drug Administration (FDA) Commissioner Dr. Scott Gottlieb. Leonard also touched on how most insurance benefits are valued from the point of sale, except for drug costs due to the complexities of the existing market (i.e., rebates).

One of the more notable — and troubling — observations was shared by Janssen's own, Dr. Anastasia Daifotis. Upon answering a question from a stakeholder in attendance at the event, she said transparency is important because it sheds light on the rise in non-medical switching and how these patient decisions are being driven by budget and not appropriate patient care.

The ADAP Advocacy Association recognizes that the cost of pharmaceuticals is an important part of the broader conversation about the current health care system. In fact, many of the specialty drugs mentioned earlier in this blog directly impact the HIV/AIDS community, and unfortunately we've witnessed patient cost-sharing for these therapies increase under many insurance exchanges. We encourage more conversations like the one hosted by Janssen, and also to reserve a seat at the table for the patient perspective. It is imperative!