Oregon Withdraws Waiver Request For a Closed Medicaid Formulary

Oregon has withdrawn a request made to federal officials to restrict medicines covered by the state’s Medicaid program. Oregon officials had hoped to lower expenses through a closed formulary that would only cover one drug for each therapeutic class. After receiving mostly negative feedback, state officials are walking back the notion. Currently, only Tennessee has been granted a waiver to use a closed Medicaid formulary and the Biden administration is reviewing that decision, which was issued by the Trump administration. Despite the withdrawn waiver request, state officials are still seeking to exclude certain drugs from Medicaid when effectiveness evidence is lacking. 

Oregon’s closed formulary attempts reflect the controversy over the FDA accelerated approval of Biogen’s Alzheimer’s drug. The FDA endorsement raised questions about approval standards, and the potential cost of the drug to the health care system. In response to the controversy over effectiveness, CMS recently proposed restricting Medicare coverage to patients in clinical trials; final decision is due in April. Oregon’s request did not cite Aduhelm specifically, but did mention the accelerated approval pathway in making its case. Whether CMS grants a waiver to Oregon is unclear, but hospitals and drug makers maintain that such a move would harm patients with serious and unmet medical needs.

FTC Votes Against Investigation Into PBM Business Practices

The Federal Trade Commission (FTC) will not investigate pharmacy benefit managers (PBMs) drug pricing practices after a deadlocked vote. Commissioners were split 2-2,along party lines, in deciding whether to study PBMs’ reimbursement rates. The vote comes amid calls from pharmacy associations and patient advocacy groups to investigate PBM practices. The FTC possesses unique powers to begin so-called 6(b) studies where it can compel companies to turn over information for research purposes. The two Republican commissioners, who voted against the proposal, indicated that the scope of the proposed study was too broad. The effort to widen the study reflects growing concern over rebates, a key component of the national debate over prescription drug costs. Rebates are paid by drug makers to PBMs to win favorable placement on formularies. In general, drug makers have argued they must raise prices to compensate for rebates, while PBMs maintain that pharmaceutical companies raise prices to boost profits. Critics contend that rebates create incentives for PBMs to accept higher prices rather than negotiate lower prices on behalf of health insurers and employers. While the debate remains inconclusive, the vote means that the FTC staff is likely to explore ways to revise the planned study and narrow the scope.

Teva Takes 'Skinny' Label Dispute With GlaxoSmithKline to the Supreme Court

The U.S. Court of Appeals for the Federal Circuit refused Teva’s request to rehear its “skinny” labels case on its generic of the GlaxoSmithKline (GSK) heart drug Coreg. As a result, Teva plans to ask the U.S. Supreme Court to overturn the decision. The case comes down to “skinny” labeling, a popular type of carve-out for generic drugmakers. Manufacturers of generic have been able to get their copycats approved for one or several–but not necessarily all–approved indications of brand-name counterparts. If a generic doesn’t cover all the indications of its reference product, then its label is “skinny.”  Branded companies argue that pharmacists sometimes ignore the skinny labels, leading to infringement when patients take generics for unapproved indications.

In 2007, Teva launched its generic version of GSK’s Coreg in two of the branded med’s three indications: hypertension and ventricular dysfunction after a heart attack. Four years later, the FDA told Teva to add the drug’s third indication for congestive heart failure, despite the fact that GSK had a patent for that use through 2015.  GSK filed suit in 2014, arguing Teva induced doctors to prescribe the generic for congestive heart failure. Three years later, a jury ruled in GSK’s favor and ordered Teva to fork over $235 million. Teva managed to convince a district court judge to overturn the verdict, but an appeals court reversed that ruling and reinstated the original finding of infringement, plus $235 million in damages. In its latest decision, the appeals court reached the same conclusion, due to active encouragement of doctors to prescribe the medications, Teva infringed. A case such as this could signal a shift in the dynamics of generic manufacturing and skinny labeling.