Supreme Court Rules on HHS Reimbursement Reduction

The 340B program is designed to lower healthcare costs and provide more comprehensive services to underserved patient populations.  The program involves drug manufacturers offering discounted prices to qualifying hospitals and providers that serve low-income patients.  The discounted drugs are reimbursed at prevailing rates by payers.  Providers can then use the savings from the program to provide discounted services and cover other costs.

The American Hospital Association (AHA) and other groups brought a case to the U.S. Supreme Court challenging the reimbursement rates for Medicare Part B from 2018 to 2019, during which time the U.S. Department of Health and Human Services (HHS) reduced reimbursement rates for 340B providers to ASP-22.5%.  The Supreme Court unanimously ruled that HHS’s decision to lower the reimbursement rates of 340B providers was unlawful.  However, based on the ruling, if HHS conducted a survey on the hospitals’ acquisition costs and set reimbursement rates based on their findings, then the change in reimbursement rates would be lawful.  This suggests that there may be cuts in reimbursement rates to 340B participants in the future.

This ruling is being viewed as a victory for the 340B entities and the patients that they serve.  The Supreme Court ruling may not be the end of this case, which now requires a remedy for past underpayments.  Currently, the case has been sent back to the U.S. Circuit Court of Appeals for the District of Columbia, where it could be sent back to the district court or the Centers for Medicare and Medicaid Services (CMS) where a remedy could be created.  There is not an expected timetable for resolution.

The 340B program faces other challenges.  One of the most pressing issues involving the sustainability of the 340B program is manufacturer participation. There are currently as many as sixteen drug manufacturers limiting discounted pricing of drugs to direct participants of the program, and not providing discounts to contract pharmacies.  The American Society of Health-System Pharmacists (ASHP) recognizes the delicate nature of the 340B program.  ASHP also advocates for the 340B program and pushes back against all efforts to undermine it.  What direction do you envision the 340B program taking in the future?  Stay tuned for future PHSL posts on this important issue.



Posted: July 2022

Gottlieb Proposes Pharmaceutical Segments for Pricing Strategies

At AHIP’s 2022 conference, Scott Gottlieb, M.D., former FDA commissioner joined a panel discussion on “Balancing Prescription Drug Affordability, Innovation and Access”.  He contends that there cannot be a one-size-fits-all solution for pharmaceutical pricing in the US.  He proposes three segments for bucketing drugs with unique policies for each.

The approach does not use the current drug breakouts for brands, generics, and specialty.  Instead, the type of market for the drug is the differentiator.  The first bucket is “drugs that are in an active market with significant rebate activity”.  Common drugs in therapeutic categories with many choices and high rebates on brands are considered in active markets.  The competition between products is driving lower prices due to market forces.

The second bucket is “drugs that currently monopolize the market but will lose monopoly in the near future”.  Payers are unlikely to realize substantial rebates on these products in the short term.

The third bucket is “drugs that are likely to monopolize a market in the long term”.  Potentially curative gene therapies would be examples of products in this segment.  If a truly effective therapy is established, Dr. Gottlieb believes manufacturers would lack the incentive to discount their product, allowing for that originator product to maintain a higher price.

Dr. Gottlieb’s proposed structure would focus on the second bucket, to influence pharmaceutical pricing and discount efforts for products where payers are unable to rely on competition to influence price.

Dr. Gottlieb’s proposal is designed to promote debate on drug pricing.  Competitive market forces for pharmaceuticals lead to lower net prices, and therefore, those products should not be the focus of new pricing policies.  While the brief article seems to indicate that the third bucket will also lack competition, we disagree and believe that manufacturers will identify these scenarios and specifically target these products to bring a competing alternative to capture market share.

Many questions are unanswered based on this brief description.

  • Who will administer the proposed new pricing process?
  • Who will decide what category each product falls under?
  • What group will create specific metrics to define the three categories?
  • What will be the basis for dictating and adjusting products between the segments?
  • How likely is it that this proposal would gain acceptance, be implemented, and have an impact?

The challenges in answering these questions will determine if Dr. Gottlieb’s proposal will provoke discussion and change in the industry or will be an interesting segmentation with no follow through.




Posted: July 2022

AMCP’s Pay-for-Performance Principles

The Academy of Managed Care Pharmacy (AMCP) outlined key principles regarding the utilization and optimization of the pay-for-performance model in their recent article titled “AMCP Pay-for-Performance-Based Reimbursements and Direct and Indirect Remuneration (DIR) Fees.” AMCP recognizes the importance of the services provided by pharmacists and supports the utilization of payment arrangements for pharmacists. These include performance-based metrics related to pharmacists’ services. The principles provided by AMCP are designed to act as a framework from which a fair and effective pay-for-performance agreement can be reached to improve patient outcomes.

AMCP provides lengthy explanations and details surrounding their thirteen principles, but the paraphrased principles are as follows:

  1. Use of “fair, attainable, and meaningful” criteria that applies to the type of pharmacy in the pay-for-performance agreement
  2. Adoption of a core set of standardized pharmacy performance measures based on unanimity from pharmacy providers, pharmacy benefit managers, health plans, and other stakeholders by Medicare Part D
  3. Recognition of health equity, socioeconomic disparities, size, geography, and patient demographics reflected in the benchmarking performance of a pharmacy
  4. Performance-based contract with “transparent, clear, and concise” provisions that are readily available and accessible to all parties in advance of any performance measurement period
  5. Unambiguously defined specifications of the measurements included in the contract
  6. Precisely defined organizational level at which metrics will be calculated and compared
  7. Agreed upon plan for collecting, integrating, and analyzing required performance data, including who is responsible for the analysis and payment of the data collection and utilization
  8. Consideration of adjusting pharmacy reimbursement rates to compensate pharmacies for the infrastructure required to collect the data necessary to meet performance-based contract requirements
  9. Performance-based price concessions are both important and necessary to pay-for-performance programs
  10. Fees due to pharmacy performance should be based on acknowledged, fixed metrics
  11. Price concessions should never be structured as “claw back” where a pharmacy would owe payment for a prescription product back to the payer
  12. Performance-based reconciliation should be completed no later than 90-days post-plan year
  13. Preferred pharmacy networks are a crucial tool for lowering patient costs and improving patient outcomes

The principles and pay-for-performance contracts are not without challenges that will need to be addressed by all stakeholders. For example, there are a multitude of ways to measure a pharmacy’s performance. One of which is outcomes-based measures that focuses on the health of a patient resulting from care. A concern here is that a pharmacist can do everything correctly and appropriately, but poor outcomes can still occur. They can educate a patient on the importance of medication adherence or lifestyle modifications, but the patient must act for their own health. Having a performance-based contract that relies in part on a patient’s decisions could be problematic. Another measure of performance is patient-reported outcomes that relies on the input of a patient via a survey. Patients may be asked about quality of life, symptom burden, health-related behavior, and satisfaction with their pharmacy. This method may be prone to negative bias, which would not reflect the true patient experience at the pharmacy. Pharmacies do not have a standardized set of metrics and reporting mechanisms. This means that the mechanisms and metrics required of a pharmacy could vary based on the payer, leading to large investments in the infrastructure required for data reporting. The large investments in data infrastructure without a standardized method of collecting and reporting the data and metrics could create greater cost on the shoulders of patients, which could negatively impact patient outcomes.

AMCP fully supports engaging in pay-for-performance agreements. They help to lay out principles upon which a fair and equitable agreement can be made. There are challenges to these agreements that are impacting pharmacies financially today. How do you envision pay-for-performance agreements evolving in the future?


Posted: June 2022

Liquid Mask Product as Tool to Combat COVID-19

The ongoing COVID-19 pandemic has taken its toll on the world.  Even among the healthy there is a sense of fatigue.  This has led to a decline of hygiene and preventative measures that once were prominent at the beginning of the pandemic.  Hand washing, surface cleaning, and proper ventilation is dwindling.  There is a demand for a preventative product that is easy to use and not invasive on the user’s daily life.  This is where a “liquid mask” may prove to be useful.

A “liquid mask” is an approved combination of hydrogen peroxide and hyaluronic acid in both nasal spray and mouth-rinse formulations.  The idea is that the hydrogen peroxide and hyaluronic acid will coat the user’s nasal and oral mucosa disallowing the SARS-CoV-2 virus from getting into the user’s nose or mouth.  This type of product can also be utilized to limit the penetration of the virus deeper into the respiratory tract early in the infection when the virus is limited to the oral and/or nasal cavities.

Currently, the nasal sprays on the market contain various active pharmaceutical ingredient (API) aimed at reducing the viral load of COVID-19 early in the course of infection.  Problems with these products are rooted in their higher price point (often greater than $20/bottle) and their formulation as a nasal spray only.  However, BMG Pharma now has approvals for their “liquid mask”, a hydrogen peroxide and hyaluronic acid combination product, as both a nasal spray and a mouthwash.  The CEO of BMG Pharma, Marco Mastrodonato, commented on the issue of high prices in the “liquid mask” market, citing $10-$20 per product as acceptable.  He also stressed the importance of presenting the product as a daily use hygiene product and not a product that can be used once to prevent COVID-19 infection.

A recent placebo-controlled clinical trial provided some evidence in the efficacy of hydrogen peroxide/hyaluronic acid products.  The trial included 106 asymptomatic patients who were infected with COVID-19.  In the placebo group, 57.8% of participants had a positive PCR swab test after three days while only 31.9% of participants using the hydrogen peroxide/hyaluronic acid nasal spray and mouth wash had a positive PCR swab test after three days (P=0.008).  These results suggest that hydrogen peroxide/hyaluronic acid “liquid mask” products may be effective and become the next big product to hit the market in the fight against COVID-19.



1. ‘Liquid Masks’ Could Be A Vital New Resource Against COVID-19. Pharma Intelligence. Published October 19, 2021. Accessed December 28, 2021.



Posted: May 2022

HRSA Funding for COVID-19 Runs Out

Health Resources & Services Administration (HRSA) recently announced that they would stop accepting claims for their Uninsured program, ultimately ending reimbursement for health care clinicians who provide testing, treatment, and administration of COVID-19 vaccines to uninsured individuals. The Uninsured program, which began in February of 2020, allowed healthcare professionals to be reimbursed for services primarily related to the vaccination, testing, and treatment of COVID-19 patients at Medicare rates. The program covered many services, including specimen testing. COVID-19 treatment was covered via telehealth appointments, office visits, and Emergency Department visits. From a pharmacy perspective, the Unsured program covered the dispensing rates for FDA-licensed antiviral drugs and administration fees for the COVID-19 vaccines. The program allowed providers to, “seek reimbursement from a program or plan that covers COVID-19 vaccine administration fees for the patient, such as a patient’s private insurance company, Medicare, Medicaid, or the federal government’s COVID-19 Uninsured Program” but not seek reimbursement from the patient themselves. To date, HRSA has paid approximately $18.8B in claims. $11.4B went towards COVID-19 testing, $5.8B for treatment, and $1.6B for vaccinations.

According to the U.S. Census Bureau, there are approximately 28 million uninsured Americans. The creation and funding of the Uninsured program granted them access to testing, treatment, and vaccinations that may have otherwise been inaccessible due to their uninsured status. With providers, hospitals, pharmacies, and other health care centers now unable to receive funding from the government for their uninsured populations, they will have to find funding from other sources, including charging the patients for these services. Large diagnostic testing companies, such as Quest and Curative, announced that they would start charging patients up to $125 per test depending on the type or stop testing the uninsured altogether. On the other hand, large pharmacies such as CVS and Walgreens are continuing to provide free or low-cost testing options for all Americans and continue to state that all COVID-19 vaccines remain free.

The lack of funding will impact uninsured patients access to services. Smaller, independent pharmacies and healthcare providers may not have the financial resources to continue to provide care. There are unused Covid relief dollars that could be reallocated to this program. What is keeping HRSA and Congress from acting?


Posted April 2022

National Prescription Drug Take Back Day April 2022

The DEA’s National Prescription Drug Take Back Day has returned!  Scheduled for Saturday, April 30th from 10:00 AM – 2:00 PM, the program aims to educate the public about medication abuse while providing a safe and convenient means of disposing of prescription drugs.  This program, currently on its 22nd run, has removed more than 15.2 million unused medications since its initiation, with over 744,000 pounds being removed during the most recent October 2021 Take Back Day.

The program aims to remove unused, unwarranted, and old drugs from the public, as these medications are often the gateway for drug addiction. According to the Centers of Disease Control and Prevention (CDC), there were 93,000 drug overdoses in the United States last year, with 75% of them being due to opioid use. The Substance Abuse and Mental Health Service Administration (SAMHSA) published a report stating that most people who abuse prescription medications obtained those medications from close friends or family. With over 400 sites in Pennsylvania alone, this program is a free, anonymous way to dispose of your prescription drugs properly. Please be aware that sites cannot accept liquids, needles, or sharps.

To find a participating Drug Take Back Day site near you, use the following link:

If you are unable to attend the National Prescription Drug Take Back Day, you can dispose of your medications at a year-round location. Visit the DEA Diversion Control Division at Controlled Substance Public Disposal Locations – Search Utility ( to locate a site near you.


Posted April 2022

Acceleration of the Center for Medicare and Medicaid Innovation’s Mission

The National Association of Chain Drug Stores (NACDS) recently published a report aimed at policymakers. The report seeks to explain the benefit of expanding pharmacist services and begins by stating how the pandemic has highlighted both the value of pharmacists in patient care and reduction of healthcare costs. As the current administration works towards their goal of a sustainable and meaningful path for the future, it is important to recognize the valuable services pharmacies and pharmacists provide. These include preventative services such as screenings, vaccinations, and chronic disease management. Pharmacies and pharmacists also provide medication optimization services including medication adherence interventions. Additional services offered by pharmacists include point of care testing, patient education, risk assessments, identification and resolution of medication gaps, and screening of patients for social determinants of health. These services are often overshadowed by the stereotype that pharmacists in community pharmacies simply count pills. As a result, many are unaware of the value that pharmacies and pharmacists can provide to a population, not only during a pandemic, but also afterwards.

The Center for Medicare and Medicaid Innovation’s (CMMI) utilization of pharmacists is imperative to creating value for its beneficiaries. Pharmacy care is not systematically included in existing Medicare fee-for-service, value-based programs, or alternative payment models. There are five key recommendations outlined in the NACDS report, which is aimed towards increasing patient access to clinical pharmacy services and broadly improving healthcare quality, equity, and value through a new pharmacy care model. These five recommendations, are:

Include pharmacies and pharmacists as eligible providers and/or suppliers in existing and future value-based programs and alternative payment models.

  1. Allow pharmacies to be directly paid and/or incentivized for providing care to beneficiaries.
  2. Develop and implement meaningful measures, including standardized pharmacy-level quality metrics, across all value-based programs and alternative payment models.
  3. Support advancements in health information technology, interoperability, and other tools that support coordination across providers.
  4. Test a pharmacy value-based program to increase access to evidence-based community pharmacy care for Medicare beneficiaries.

The passage of the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act of 2015 (MACRA) created new incentives for providers to participate in alternative payment models that meet certain eligibility criteria (known as advanced alternative payment models). These include a five percent bonus for participation in the alternative payment models. The Merit-Based Incentive Payment System (MIPS) was born out of this MACRA. MIPS-eligible, Medicare Part B providers may receive a positive or negative payment adjustment based on their performance across four categories – quality, cost, promoting interoperability, and improvement activities. It should be noted that pharmacists are not MIPS-eligible providers. However, 25 percent of improvement activities and 20 percent of promoting interoperability measures were related to medications, suggesting that community pharmacies are leveraged to positively impact the performance of the MIPS program.

The NACDS report identifies six essential categories that are crucial in designing, implementing, and evaluating alternative payment models:

Patient and Provider Participation

  1. Payment
  2. Care Delivery and Management
  3. Quality and Performance Measurement
  4. CMS Operational Issues
  5. Evaluation

These categories should be consulted whenever designing, implementing, and/or evaluating alternative payment models. The categories have given way to five recommendations for the integration of pharmacy care into value-based programs and alternative payment models.

The first recommendation is to include pharmacies and pharmacists as eligible suppliers and/or providers in existing and future value-based programs and alternative payment models. This would allow pharmacies and pharmacists to serve on care teams that improve access to community-based care through the delivery of patient-centered services. The Centers for Medicare and Medicaid Services (CMS) would have to expand direct payment to pharmacies as suppliers of healthcare services, as pharmacies and pharmacists would be providers for preventative services, chronic disease management, medication optimization services, and beneficiary education and health coaching.

The second recommendation is to allow pharmacies to be directly paid and/or incentivized for providing services that enhance quality of care, improve health outcomes, and reduce the total cost of care to beneficiaries. One issue is that the current models, lack the infrastructure to support sustainable delivery of pharmacy services; these models allow alternative payment model plans to partner with pharmacies, yet do not allow direct participation with pharmacies.  CMS and payers designing value-based programs and alternative payment models should provide direct payments to pharmacies. The following are solutions to direct payment and incentive pharmacies and pharmacists:

  1. Permit pharmacists to be eligible for performance-based or bonus payments linked to outcomes for measures related to preventative care
  2. Test models that allow pharmacist to be paid under Part B for preventative care
  3. Incorporate a one-time or monthly, risk-adjusted care management fee into existing or new model design
  4. Expand incident-to billing opportunities and remove the requirement that incident-to services be provided at the physician’s site of practice

The third recommendation is to develop and implement meaningful measures, including standardized pharmacy-level quality metrics, across value-based programs and alternative payment models, payers, and programs. This would allow for more accurate and consistent evaluation of a pharmacy’s impact in the models and programs.

The fourth recommendation is to increase the support to advance health information technology and software, particularly in interoperability. This would allow pharmacists and other stakeholders involved in a patient’s care to communicate more easily and have a more complete picture of the care given. Currently, the Pharmacist eCare Plan allows for clinical information exchange between pharmacies and others, such as physicians and payers.

The fifth and final recommendation is to test a pharmacy value-based program to increase access to evidence-based community pharmacy care for Medicare beneficiaries.  CMS and payers should design and implement a model focused on pharmacy care to test the impact on quality and beneficiary outcomes and costs.  This model would support the CMS goal of moving more patients and providers into value-based care. It would also aid in advancing the CMMI goal of achieving better care, healthier people, greater equity, and smarter spending.

One challenge related to payment for pharmacy services is that pharmacists are not recognized as Part B providers. For a pharmacist who practices in hospital outpatient setting or a physician’s office and can bill for incident-to billing, the payment is made to the provider or the physician overseeing the pharmacist. The creation of a new system that allows pharmacies to bill as providers for their services also poses a challenge, as they are currently not set up to do so. However, there are opportunities for payment of pharmacy services. One example of this is the per-member-per-month (PMPM) fees being utilized in Iowa and South Dakota. Participating pharmacies are paid a prospective PMPM fee with an opportunity to receive further payment based on shared savings. Minnesota reimburses pharmacies or other providers based on a continuum of patient need.

Overall, the utilization and recognition of pharmacies and pharmacists as providers will be a giant step forward for healthcare on all fronts. Further legislation will need to be passed, but it is clear that pharmacists have a lot to offer in support of CMMI’s Mission.  The savings and increased quality of care are exactly what is needed during and after this pandemic. What are your thoughts on the expansion of the role of pharmacists?


Posted: March 2022

CivicaRx Announces Plans for Generic Insulin

Just days after President Biden called for a cap on insulin prices in his State of the Union Address, CivicaRx announced it is planning to develop and manufacture certain insulin products to be sold at a much lower cost than those currently on the market.  The current plan is for the first insulin to be introduced in 2024.  CivicaRx’s focus is to avoid the gross-to-net pricing framework (rebates) currently used for insulin products.

PBMs utilize their formulary coverage and product exclusions to drive prescription volume and associated brand drug rebates.  PBMs currently exclude lower list price insulins and would be expected to do the same with future low priced CivicaRx insulins.  Patients would still be able to access the product with a prescription and pay the cash price.  Depending on the pharmacy benefit plan, the monthly patient cash price may be much lower than the third-party price for patients with high deductible plans.  Existing manufacturer financial support programs through copay cards reduce the patient cost for Lantus, Novolog, and Humalog.  In combination, these factors generate a preference for the existing brands compared to the potential lower cost CivicaRx insulins

Medicaid currently focuses on the lowest net cost product and will exclude generics in situations where the generic price costs the Medicaid program more than the brand.  Unless CivicaRx versions are less expensive than rebated brands, Medicaid plans will limit coverage for these products.

Medicare Part D plans also benefit from brand rebates (percentage of list price) and DIR fees (percentage-based and flat-fee options).  CivicaRx insulins would be disadvantaged based of the lack of rebates, and possibly on DIR fees, if the PBM could retain a percentage of the brand insulin vs a flat fee on a generic insulin.

Therefore, if there is limited third-party coverage, pharmacies may lack the demand to stock the CivicaRx insulins.

The easiest avenues for gaining market share appear to be:

  • Uninsured cash-paying patients across all pharmacies
  • Hospital inpatient use to lower cost and expand profit opportunities

PHSL supports a competitive market, especially for a necessary treatment where patient costs become an obstacle to care, but there are product adoption concerns based on the initial notice and current market framework. CivicaRx will have obstacles to overcome for wide adoption of the lower cost insulins. Where do you see a fit in the market for CivicaRx’s proposed insulins?



Posted: March 2022

Virtual Reality in Healthcare

Virtual reality (VR) is defined as a program that immerses the user in a virtual environment with the use of a headset. This requires audio and video components, head tracking to simulate head movement, and a 360-degree view of the virtual world. The imagery must be an entirely fictional reality with actions and images controlled by the system. Virtual reality can sometimes be confused with augmented reality. Virtual reality creates a computer-generated world, while augmented reality layers a digital image on the real world through a device screen like a smart phone. For example, virtual reality would allow you to feel like you are swimming in an underwater environment, while augmented reality would display a fish swimming on the wall in front of you.

Currently, virtual reality is used in healthcare in pain treatment, anxiety treatment, phobia exposure, surgical training, education, and physical fitness. However, more studies are available to support the use of virtual reality in treating pain and anxiety. Virtual reality treats anxiety by two mechanisms: exposure and distraction. Exposure refers to the virtual confrontation of a problematic situation like public speaking, and distraction simply provides some calming event in the virtual world to take focus away from an anxious event. One anxiety study looked at virtual reality exposure to treat social anxiety disorder.1 The patients self-reported anxiety levels pretreatment, posttreatment, and 12 months after treatment. There was significant improvement in anxiety 12 months after treatment without any notable side effects observed. This is encouraging, because this long-lasting effect could justify the costs associated with virtual reality treatment if it eliminates chronic medication use. Virtual reality’s place in therapy could also be justified by eliminating the use of benzodiazepines in anxiety treatment, which are a potentially addictive substance that we would like to limit in healthcare.

When looking at pain treatment, virtual reality works via three mechanisms: distraction, focus shifting, and skill building. Distraction tries to divert the patient’s attention with a passive virtual experience. Focus shifting guides user interaction and creates virtual tasks for the user to complete, which tries to use an active program to shift focus from painful stimuli. Skill building uses the virtual world to learn techniques that could help in the real world, which includes controlled breathing exercises. Studies looking at these pain treatments have shown significant improvement in pain scale ratings with nausea as the only side effect. One potential place in therapy is the replacement of opioids in some patients; eliminating the use of addictive substances could provide motivation to push virtual reality into the mainstream.

In other fields, virtual reality is being used for education in medical, nursing, and pharmacy schools. It is used for patient counseling practice and clinical examination practice. The potential benefit of these uses is eliminating the need for patient actors or simulation mannequins, which may allow universities to save money in the long run. The future goal is to have multiplayer virtual reality, which would allow people from around the world to interact in the same virtual space for teaching or clinical practice. In a related field, virtual reality is being used for surgical training, which allows surgeons to practice their technique without the real-life risks of surgical procedures. Lastly, phobias are another common use for virtual reality where exposure therapy is used to alleviate fears, such as public speaking or spiders.

Two companies currently providing virtual reality therapy are Behavr and XR Health. Behavr is $599 for a 22-week program focusing on mental health or pain treatment. The headset with the pre-loaded programs is sent directly to the patient. The other, XR Health, is $69 for a week for self-use or $89 a week for sessions with a therapist. This site advertised it is covered by many insurances, but it is unclear exactly what the final pricing would look like with a large variance expected between plans. This system is also used for pain or anxiety treatment, and it comes with individualized patient programs pre-loaded on the device. Similarly, Osso VR is a current program offered for use in surgical training, but pricing information is not available. This program rates the success of virtual procedures and tracks improvement and time spent training.

Overall, virtual reality in healthcare is still in the beginning stages of use. There are many encouraging advancements, but it still has a lot of room for growth in the market. Recent advances in virtual reality were driven by the increasing availability and affordability of headsets. With more remote learning and work-from-home opportunities due to COVID, the virtual reality market is poised for expansion.  In the future, access to headsets will continue to increase, and virtual reality will continue to grow in use and programming. How do you think virtual reality can continue to expand its use in healthcare?



  1. Anderson PL, Price M, Edwards S et al.. Virtual reality exposure therapy for social anxiety disorder: a randomized controlled trial. J Consult Clin Psychol. 2013 Oct;81(5):751-60.


Posted: February 2022

Interchangeable Biologics in the Drug Compendia

Biologics are therapies aimed to prevent, treat, and cure diseases. They are typically large complex molecules often derived from a living system. Biologics are managed differently than small molecules products by the FDA. The list of all currently approved biologics is available in the FDA’s Purple Book. With biologics, the initial product introduced into the market is labeled as the reference product. The reference product is approved based on a full complement of safety and effectiveness data.

From there, additional products can be developed and become approved as biosimilars. A biosimilar is a biological product that is highly similar to and has no clinically meaningful differences from the FDA-approved reference product. A biosimilar is compared directly to the reference product in terms of its structural make-up and its function.

A biosimilar can be dispensed when that particular biosimilar product name is written for by the prescriber. In addition to being a biosimilar, a product can also become an interchangeable biosimilar. An interchangeable biosimilar must meet additional requirements based on further evaluation and testing of the product. The FDA provides the following information on interchangeable products: “As part of fulfilling these additional requirements, information is needed to show that an interchangeable product is expected to produce the same clinical result as the reference product in any given patient. Also, for products administered to a patient more than once, the risk in terms of safety and reduced efficacy of switching back and forth between an interchangeable product and a reference product will have been evaluated.” Once a product is approved as interchangeable, it can be used in place of a reference product. The ability and procedure for pharmacies to substitute for a biologic are determined by state regulations.

Currently, there are two FDA-approved interchangeable biosimilar products. Semglee (insulin glargine-yfgn) was the first approved interchangeable biosimilar and is interchangeable for Lantus (insulin glargine). The original NDC of Semglee (insulin glargine) was approved as a biosimilar to Lantus in June 2020 under 351(a), the traditional pathway for an innovator biologic. The new Semglee (insulin glargine-yfgn) was approved in July 2021 under 351(k), the biosimilar pathway, which caused the assignment of a 4-character suffix (YFGN) to the chemical name, and which makes it a unique chemical name.  This situation has presented challenges for the drug pricing compendia and with product selection at the pharmacy, because not all Semglee product NDCs have the interchangeable status. The second interchangeable biosimilar product is Cyltezo (adalimumab-adbm), the interchangeable for Humira (adalimumab), which is not currently on the market but is scheduled to launch in July 2023.

Wolters Kluwer’s Medi-Span drug compendium uses the generic product identifier (GPI) to link pharmaceutically equivalent products (i.e., products with the same active ingredient, strength, dosage form, and route of administration). A GPI will link a brand and all its available generics. However, the GPI will not work to link a biologic and its corresponding biosimilars, as each biosimilar has a unique 4-character suffix, and thus a unique chemical name/active ingredient.  Therefore, the biosimilar will not link to its reference product and will instead have its own GPI.  PHSL understands that interchangeability codes are included in a separate substitution file but are not accessible to subscribers of all Medi-Span platforms. Pharmacy systems relying on Medi-Span that do not have access to the substitution file for interchangeability will require additional data within the system or additional configuration efforts by the dispensing pharmacy staff to determine product interchangeability.

Drug pricing compendium First Databank (FDB) contains a similar linkage of brands and generics through their use of the Generic Code Number (GCN) and GCN Sequence Number. While Lantus and interchangeable biosimilar Semglee do not share the same GSN, FDB has introduced fields in which these products can be identified and used by stakeholders: Biologic Name Grouper and Biologic Association Type. Biologic Name Grouper represents a family name that groups reference biologics and their corresponding biosimilar and interchangeable NDCs. Biologic Association Type identifies a product as a reference, biosimilar, or interchangeable. As we referenced above, Semglee currently has NDCs that are considered biosimilars and additional NDCs that meet the criteria for interchangeable biosimilars.  Within FDB, these fields may reduce the issues with Semglee NDCs by providing additional details on the interchangeable status to the reference product Lantus.

Data fields linking biologics, biosimilars, and interchangeable biosimilars are vital for stakeholders to identify and allow for proper substitution of interchangeable products. This can provide significant cost savings to health plans and patients. Providers may also be able to use this data to identify available interchangeable biosimilars for a particular product. On November 22, 2021, an article published in Drug Topics highlighted a policy change adopted by Mayo Clinic in which their prescribers were advised to utilize the lowest cost biosimilar. This policy change was reported to have saved Mayo Clinic approximately $23 million over the first twelve months, which demonstrates the potential for cost savings that can be realized in the biologic market. It will be up to stakeholders to utilize this additional information to create policy, automation, or other innovation to benefit from interchangeable biosimilars. What actions need to be taken by your organization to direct the use of biosimilars or interchangeable biosimilars?


Posted February 2, 2022