After FDA Authorization, Lots of Pressure to Rescind Zohydro ER Approval

Nahla RizkallahIn October 2013, the U.S. Food and Drug Administration (FDA) went against the recommendation of its own advisory committee and approved Zohydro® ER. The FDA’s Anesthetic and Analgesic Drug Advisory Committee of independent experts voted 11 to 2 to recommend against approval of Zohydro® ER due to concern of the potential for abuse because the product does not include acetaminophen.

What is Zohydro® ER? It is a Schedule II controlled substance under the Controlled Substances Act. It is the first FDA-approved single-entity extended-release hydrocodone without acetaminophen. Zohydro® ER is FDA indicated for the management of pain severe enough to require around-the-clock opioid, long-term treatment and for which alternative options are inadequate. Zohydro® ER has black box warnings all of which can cause fatal overdose: addiction potential, life-threatening respiratory depression, accidental exposure, neonatal opioid withdrawal syndrome, and interaction with alcohol.

Since the FDA approval of Zohydro® ER, several members of congress protested by sending an open letter to Health and Human Services Secretary, Kathleen Sebelius. In addition, in November, attorneys general of 29 states and territories have sent a letter to the FDA asking that the agency consider reversal of Zohydro® ER. Most recently, a petition from more than 40 consumer organizations, health care agencies, addiction treatment providers, and community-based drug and alcohol prevention programs called upon the FDA to revoke its approval of Zohydro® ER. However, despite all the sharp criticism that the FDA has received, Zohydro® ER was launched on March 3rd, 2014.

So, why all the hype? Why so much attention and objection? This decision was surprising to many because as the country is in the midst of a prescription drug abuse crisis, the FDA failed to apply its current standard and goal of requiring abuse-deterrent technology for all opioids. Zohydro® ER does not have abuse-resistant technology. It can be dissolved or injected, and the opioid will get into a person’s system all at once.

Because of this and the greater risks with a new extended release opioid, Zohydro ER® is not recommended as a first line drug in the Official Disability Guidelines (ODG). It is classified as an ‘N’ by ODG which means it requires pre-authorization. It is likely that Zohydro ER® will be paid for by Medicare through a prior authorization process where documentation is provided to support that the patient has tried and failed several other alternative narcotics. Post-marketing studies on Zohydro® ER are being required by the FDA to evaluate the risk of misuse, abuse, addiction, overdose and death.

The average wholesale price (AWP) per capsule is as follows: 10mg is $6.59, 15mg is $7.03, 20mg is $7.24, 30mg is $7.46, 40mg is $7.67, and 50mg is $8.00. The FDA approved frequency for Zohydro® ER is every twelve hours.

Generally, Zohydro® ER is expected to drive up the cost of MSAs. However, as with all other forms of treatment and prescriptions, Gould & Lamb uses varied clinical tools, such as drug management reviews, to assist with mitigation of such costs.

Generic Cymbalta® is available

On December 11th, 2013, the U.S. Food and Drug Administration (FDA) approved the first generic versions of Cymbalta® (duloxetine).  Progressive Medical 2013 Drug Trends reported that Cymbalta® accounted for 4.2% of total spend in 2012, which places it in the number five of the top medications by total spend.

Cymbalta® is an antidepressant in the therapeutic class of selective norepinephrine reuptake inhibitor which is FDA approved for the following conditions: chronic musculoskeletal pain, diabetic peripheral neuropathic pain, fibromyalgia, generalized anxiety disorder, and major depressive disorder.  It is often used off-label to treat neuropathic pain.  The usual dosage is 60mg once daily, swallowed whole.  There is no evidence that dosages greater than 60mg per day confer any additional benefits.

The generic drug manufacturers include: Aurobindo Pharma, Actavis Pharmaceuticals, Citron Pharmaceuticals, Dr Reddy’s Laboratories, Lupin Pharmaceuticals, Caraco Pharmaceuticals/Sun Pharma USA, Teva Pharmaceuticals and Torrent Pharmaceuticals.

The AWP per Redbook Online as of 1.6.2014 for Cymbalta® 20mg is $7.77 per capsule; whereas duloxetine 20mg ranges from $6.22 to $6.99 per capsule.  Cymbalta® 30mg is $8.72 per capsule; duloxetine 30mg ranges from $6.97 to $7.85 per capsule.  Cymbalta® 60mg is $8.72 per capsule; duloxetine 60mg ranges from $6.97 to $7.85 per capsule.

Savings will accrue for the Workers’ Compensation payers once claimants are switched from the brand name product to the generic agent.

Generic interchange regulations vary from state to state.  Gould and Lamb’s ‘Stop the Pain’SM (STP) is an interventional and actionable product which can assist in switching from the brand name medications to the more cost-effective generic agent.  STP can produce significant savings, assess appropriateness of current therapy, optimize drug therapy, assist clients in lower claims costs, and lower Medicare Set-Aside allocations.

Future Considerations for Controlled-Release Oxycodone

Oxycodone CR is a slow release opioid narcotic currently indicated for use in moderate and moderate-to-severe pain. When initially released to the market, the indicated use was for pain management in cancer patients and for control of postoperative pain. As the use of controlled-release Oxycodone expanded, problems with addiction and abuse escalated.

In an effort to bring the use of Oxycodone CR under more effective control, H.R. 1366 cited as the “Stop Oxy Abuse Act of 2013” was introduced March 21, 2013 “to direct the Commissioner of Food and Drugs to modify the approval of any drug containing controlled-release (CR) oxycodone hydrochloride, to limit such approval to use for the relief of severe-only instead of moderate-to-severe pain, and for other purposes”. The introduction of the bill followed a petition filed by Physicians for Responsible Opioid Prescribing (PROP) calling for the FDA to modify opioid labeling such that future approval would exclude the term “moderate” from an indicated use for non-cancer pain. As such, approval for use would be limited to severe pain only within this population. However, the bill does not restrict the drug’s use to non-cancer pain but, rather, seeks to limit approval for use to “severe-only pain” for any patient population.

If H.R. 1366 passes, it will operate to remove use of the controlled-release oxycodone drugs for management of any form of moderate pain type diagnoses as an approved indication by the FDA. The prescribing of Oxycodone CR for “moderate” or “moderate-severe” pain would then be considered an “Off Label” use. Within the world of Medicare Set-Aside, provision of controlled-released Oxycodone for such diagnoses would be excluded from the plan of care. Any continued use of Oxycodone CR would require medical documentation and diagnosis of “severe” pain.

Patient Protection and Affordability Care Act of 2010 & Medicare Part D

William F. BellThe June 28, 2012 decision by the United States Supreme Court on the Affordable Care Act may go down as one of those “Where were you when the ruling was announced?” type of moments. As both a self-proclaimed C-SPAN and political junkie, I followed the debate from the beginning, when President Obama signed into law the Patient Protection and Affordability Care Act of 2010 (PPACA) and the Healthcare and Education Reconciliation Act of 2010 (HCERA), including reading the transcripts of the oral arguments made to the U.S. Supreme Court a few months back.

The reason for my interest was a key provision pertaining to prescription drug plans which, if enacted, will have an affect on Medicare Part-D and, therefore, on Workers’ Compensation Medicare Set-Asides (WCMSA). PPACA § 2502 pertains to the elimination of the exclusion of coverage of certain drugs that traditionally have not been compensable under Medicare Part-D.

Now that the healthcare law has been upheld, beginning in 2013 Medicare Part-D will begin to cover Benzodiazepines and barbiturates used for certain conditions such as epilepsy, cancer, or a chronic mental disorder. Currently, these medications are excluded from Medicare Part-D prescription drug plans.

Benzodiazepines are those medications such as Diazepam (Valium), Clonazepam (Klonopin), Alprazolam (Xanax), and barbiturates and include the commonly used medication Phenobarbital. Although we do not see use of Phenobarbital often in the WC arena, Benzodiazepines are utilized for many conditions in WC, such as anxiety, sleep, and muscle relaxation.

Normally, these medications would not generate any concern as they are typically dispensed as generic and are relatively inexpensive. However, the expansion of Medicare to cover them will have a direct impact on WCMSAs in two ways.

First, individuals may request the brand name Benzodiazepines in lieu of a generic at the time of fill. Average Wholesale Price (AWP) of brand name Valium costs about $3 per tablet and averages 15 times higher than the price of the generic equivalent Diazepam.

Second, although Benzodiazepines are abused less than opioids, there is now the potential for an increase in prescriptions for these medications. Benzodiazepines abuse is commonly seen when there is an established pattern of opioid abuse or with an illicit substance. Therefore, the potential for increased rates of abuse may rise. The WC community is already struggling with overuse of opioid medications and, conceivably, the new coverage could compound the problems the workers’ compensation community is seeing with the abuse of opioids.

These changes are certainly something to keep any eye on. They provide a strong argument for both early intervention strategies and prescription management and requires further close scrutiny on how it may affect the bottom line.

Further information on these and other changes can be found at:

About the Author: William F. Bell, Jr. is the Senior Clinical Pharmacy Specialist for Gould & Lamb, LLC. His primary responsibility is the review of a claimant’s pharmacotherapy regimen and the identification of off-label medications in a Medicare Set Aside Allocation. He has given numerous presentations on the subject of medication management and how it relates to Workers’ Compensation and Medicare Set Aside Claims. Bill has also authored two continuing education articles for the Pharmacist’s Letter, a nationally known education resource for practicing pharmacists.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

2012 Medicare Trustees Annual Report

Continuing Short Term and Long Term Financial Difficulties

The Medicare program has two components. Hospital Insurance (HI) and Supplementary Medical Insurance (SMI).  HI, otherwise known as Medicare Part A, helps pay for hospital, home health, skilled nursing facility, and hospice care for the aged and disabled. SMI consists of Medicare Part B and Part D. Part B helps pay for physician, outpatient hospital, home health, and other services for the aged and disabled who have voluntarily enrolled. Part D provides subsidized access to drug insurance coverage on a voluntary basis for all beneficiaries and premium and cost-sharing subsidies for low-income enrollees. Medicare also has a Part C, which serves as an alternative to traditional Part A and Part B coverage. Under this option, beneficiaries can choose to enroll in and receive care from private “Medicare Advantage” and certain other health insurance plans that contract with Medicare. These plans receive prospective, capitated payments for such beneficiaries from the HI and SMI Part B trust fund accounts.

The Social Security Act established the Medicare Board of Trustees to oversee the financial operations of the HI and SMI trust funds. The Social Security Act requires that the Board, among other duties, report annually to the Congress on the financial and actuarial status of the HI and SMI trust funds. A complete copy of the 2012 report submitted by the Board can be found on the CMS website.

In summary, total Medicare expenditures were $549 billion in 2011. The Board projects that, under current law, expenditures will increase in future years at a somewhat faster pace than either aggregate workers’ earnings or the economy overall and that, as a percentage of GDP, they will increase from 3.7 percent in 2011 to 6.7 percent by 2086 (based on the Trustees’ intermediate set of assumptions). If lawmakers continue to override the statutory decreases in physician fees, and if the reduced price increases for other health services under Medicare are not sustained and do not take full effect in the long range, then Medicare spending would instead represent roughly 10.4 percent of GDP in 2086. Growth of this magnitude, if realized, would substantially increase the strain on the nation’s workers, the economy, Medicare beneficiaries, and the federal budget.

The Trustees project that HI tax income and other dedicated revenues will fall short of HI expenditures in all future years under current law. The HI trust fund does not meet either the Trustees’ test of short-range test of financial adequacy or their test of long-range close actuarial balance.

The Part B and Part D accounts in the SMI trust fund are adequately financed under current law, since premium and general revenue income are reset each year to match expected costs. Such financing, however, would have to increase faster than the economy to match expected expenditure growth under current law.

The financial projections in this report indicate a need for additional steps to address Medicare’s remaining financial challenges. Consideration of further reforms should occur in the near future. The sooner solutions are enacted, the more flexible and gradual they can be. Moreover, the early introduction of reforms increases the time available for affected individuals and organizations—including health care providers, beneficiaries, and taxpayers—to adjust their expectations. Congress and the executive branch must work closely together with a sense of urgency to address the exhaustion of the HI trust fund and the growth in HI, SMI Part B, and SMI Part D expenditures.

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About the Author: Rafael Gonzalez is Director of Medicare Compliance & Post-Settlement Administration. He brings over 20 years of experience in the Workers’ Compensation and Liability insurance industries with a specific focus on Medicare Compliance. Rafael has been responsible for all areas of Medicare Set Aside Allocations (MSAs) including the preparation of MSAs and their approval by the Center for Medicare & Medicaid Services.  At Gould & Lamb, Rafael’s duties include assisting clients with Medicare Compliance issues, specifically on Post-Settlement Administration and client education.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.