Editor’s note: One of the most compelling segments of our recent webinar, “The Five Megatrends Sharping Pharma’s Next Decade,” was the dynamic question-and-answer session with our audience, which exceeded 1,060 participants. So many of our viewers asked questions that we ran out of time to cover them all. Below are the answers to five questions that represent broad importance to our industry. If you haven’t yet watched the session and want to hear all of the questions with our responses, click here to view it on demand.

Question 1:

There are some drugs that do not show cost efficiency across large patient populations. They do show promise, however, in smaller populations. Do you think we are focused too much on being population-based rather than patient-centric when thinking about value-based paradigms?

Answer 1:

An important part of operating in a value-based environment is the ability to identify patients within large populations who have the best chance of being responsive to a specific drug or treatment. This is particularly important when the treatment option is expensive. Companion diagnostic tests represent one way that manufacturers are helping to demonstrate a commitment to finding patients in which a particular treatment has the best chance of being the most clinically effective.

Providing payers with evidence of a product’s clinical utility to treat an individual patient, in advance of receiving the treatment, can help payers structure corresponding coverage policies to support appropriate patient access. Delivering the right treatment option to the right patient at the right time is a core component of a value-based system.

Question 2:

Is there any possibility that covered-entity status will be redefined for 340B?

Answer 2:

The list of covered entities that are entitled to purchase outpatient drugs at 340B prices are set forth in the statute and include the following:

  • Federally qualified health centers (FQHCs) and FQHC look-alikes
  • Native Hawaiian health centers
  • Tribal and urban Indian health centers
  • Ryan White HIV/AIDS program grantees
  • Certain disproportionate share hospitals (Disproportionate share hospitals are those that treat indigent patients. Among other things, to be eligible for 340B discounts, a disproportionate share hospital must have a disproportionate share adjustment percentage of greater than 11.75%.)
  • Certain children’s hospitals
  • Certain critical access hospitals
  • Certain free-standing cancer hospitals
  • Certain sole community hospitals
  • Certain rural referral centers
  • Black lung clinics and tuberculosis clinics
  • Title X family planning clinics and sexually transmitted disease clinics
  • Comprehensive hemophilia diagnostic treatment centers.

Congressional action would be required to amend the statute. This appears unlikely in the current political environment. The Health Resources and Services Administration (HRSA), however, has issued guidance over the years which further refines the eligibility categories. For example, HRSA has issued guidance on the circumstances under which an offsite facility of a hospital is deemed part of the hospital for purposes of 340B eligibility. HRSA also has issued guidance on who is considered a patient of a covered entity for 340B eligibility purposes.

The long-anticipated “mega rule” is expected to address, among other things, the patient definition and the eligibility of offsite facilities for 340B pricing. (The core controversy with the 340B program is around whether eligible patients are receiving the discounted pharmaceuticals.) While the actual categories of 340B-covered entities are statutorily defined and unlikely to change in the near future, the mega rule probably will include regulations that refine the extent to which patients of covered entities are eligible for 340B drugs.

Question 3:

The FDA recently provided guidance on social media, but it isn’t very clear. Is there a way to get more clarity, as it seems that social media could help the quality of care?

Answer 3:

At this point, further clarity is unlikely to improve the ability of health product sponsors to enhance care quality. The FDA has been sufficiently clear already that it is not budging from its stance that each and every message, even those limited to 140 characters, must be complete and balanced in communicating benefit and risk information. This view is at odds with the actual use of social media and underestimates the abilities and research skills of social media users. What’s needed is an evolution of the FDA’s views, similar to the one that occurred when the FDA eventually opened up television to drug advertising.

The July issue of our Manatt “Health Update” included a summary and analysis of the two additional draft guidances that the FDA released on June 17, 2014. The two guidances put greater definition around how pharmaceutical and medical device companies can use social media. The first guidance focuses on using social media platforms with space limitations, such as Twitter. The second deals with how to correct third-party misinformation about prescription drugs and medical devices.

The long-awaited draft guidances are consistent with the FDA’s previous statements and enforcement actions that set out a conservative and limited role for product sponsors. It does appear, however, that the FDA is willing to give companies more freedom than might be expected to correct inaccurate information about their products that appears on the web. To read the article detailing the guidances, click here.

Question 4:

Millennials are bucking traditional trends such as full-time work and home ownership. How will this wave of part-time workers impact the five megatrends?

Answer 4:

The increase in part-time workers will have the greatest impact on employers, as they seek to recalibrate the role they play in health insurance. Employers and employees are changing their relationships and their responsibilities to each other. In this new world, employees – or contractors, as many will be – will want more control over their own health insurance. Employers, in turn, will move toward defined contributions. The sea change we’ll see will be similar to the move employers made when they encouraged employees to manage their own retirement benefits, and pension plans dissolved.