[Federal Register Volume 84, Number 178 (Friday, September 13, 2019)]
[Notices]
[Pages 48357-48358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19885]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Drug Vial Size Report

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health & Human Services (HHS).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice announces the issuance of the August 2, 2019 
single-source funding opportunity titled ``Drug Vial Size Report'' 
available solely to the Health and Medicine Division of the National 
Academies of Sciences, Engineering, and Medicine [the Academies] to 
conduct a study on the Federal healthcare costs, safety, and quality 
concerns associated with discarded drugs that results from weight-based 
dosing of medicines contained in single dose vials as stated in Senate 
report 114-274.

DATES: The performance period of the award, in the amount of 
$1,200,000, to the Academies will be 18 months from the date of award.

FOR FURTHER INFORMATION CONTACT: Alisha Williams, (410) 786-7507 and 
Deborah Pujals Keyser, (410) 786-8096.

SUPPLEMENTARY INFORMATION: 

I. Background

    A 2016 report published in the British Medical Journal (BMJ) 
describes overspending and waste due to single-use cancer drugs being 
supplied in vials that contain larger dosages than needed by the 
average patient. The authors specifically cite examples of drug 
manufacturers distributing larger sizes and more limited variety of 
single-use vial sizes in the U.S. than they do for their overseas 
markets. While this may paradoxically increase physician and hospital 
profits when reimbursement is based on a percentage of the cost of an 
entire vial, this situation results in the excessive waste of highly-
valuable drugs and increased Federal and private payer costs. Using 
claims data for the top 20 cancer drugs, the study found that the 
proportion of drug wasted ranged from 1 to 33 percent and was 
associated with an estimated $2.8 billion dollars per year in drug 
costs and healthcare provider markups on wasted drug.
    In addition to wasting taxpayer dollars through Federal health 
programs like Medicare, this practice also drives up the cost for 
patients whose cost sharing is based on amounts of drugs that are 
unnecessarily large. Since Medicare Part B beneficiaries pay 
coinsurance of up to 20 percent for prescription drugs, seniors are 
paying higher out-of-pocket costs for drugs they do not need or 
receive.
    As described in Chapter 17, Section 40.1 of the Medicare Claims 
Processing Manual, Medicare Part B pays for the amount of the drug or 
biological administered to the beneficiary as well as the remainder of 
drug discarded from single-use vials or other single-use package up to 
the amount of the drug or biological indicated on the vial or package 
label. The JW modifier is a Healthcare Common Procedure Coding System 
(HCPCS) Level II modifier used on a Medicare Part B drug claims to 
report the amount of drug or biological that is discarded and eligible 
for payment under the discarded drug policy. The modifier is only to be 
used for drugs in single-dose or single-use packaging. As of January 1, 
2017, The Centers for Medicare and Medicaid Services (CMS) requires all 
physicians, hospitals and other providers to use the JW modifier when 
submitting claims to Medicare Administrative Contractors (MACs) for 
reimbursement (except claims for drugs and biologicals provided under 
the Competitive Acquisition Program) and to document discarded waste in 
the patient's medical record. This mandatory reporting nationwide will 
provide the data necessary to quantify the amount of drugs that are 
unused and the cost to taxpayers from that waste.
    Further research is needed to fully illustrate system factors that 
lead to drug waste from single-dose vials, quantify the Federal 
government's and Medicare beneficiaries' costs associated with this 
waste, and explore waste mitigation strategies.

II. Provisions of the Notice

    The Funding Opportunity offers $1,200,000 in funding for the 
Academies to conduct a study on the Federal healthcare costs, safety, 
and quality concerns associated with discarded drugs that results from 
weight-based dosing of medicines contained in single-dose vials. More 
specifically, the Academies' requirements include, but are not limited 
to:
     Provide a comprehensive assessment of Federal healthcare 
costs, both to the Medicare program and to Medicare beneficiaries, due 
to billing for wasted drugs and biologicals from single-dose vials. 
Additionally, examine Federal reimbursement and beneficiary cost-
sharing policies as they relate to drug waste and the degree to which 
these policies may affect costs to Federal programs and beneficiaries.
     Using available data sources, quantify the amount of waste 
associated with single-dose injectable drugs and biologics in billing 
units and/or proportion of available vial sizes and calculate the 
associated dollar amounts.
     Identify relevant drugs, vial sizes, dosing practices, and 
delivery practices most associated with waste. Evaluate dosing 
strategies which may contribute to or mitigate excessive drug waste 
where possible (for example, dosing based on weight, body surface area 
[BSA] and institutional rounding/dose-capping protocols).
     Research the safety and quality concerns associated with 
the use of single-dose vials which contain excess drug from industry 
and regulatory perspectives. Investigate manufacturer rationale for 
developing particular vial sizes and safety standards (such as those 
from U.S. Pharmacopoeia [USP]) influencing requirements for single-dose 
vs multi-dose vial development and utilization. Review Federal 
guidelines or requirements that influence drug package types and drug 
supply chain factors such as manufacturing, storage, and shipment.
     Consult with Stakeholders, including CMS, FDA, CDC, DOD, 
IHS, VA, USP, specialty physicians [including rural practitioners], 
specialty clinics [including rural clinics], hospitals [including rural 
hospitals], patient groups, biopharmaceutical manufacturers, health 
insurance companies, and healthcare distributors/wholesalers.
     Comply with applicable conflict of interest standards.
     The report should include findings related to above 
requirements as well as provide recommendations to Congress for 
revising current policies and practices or other strategies to mitigate 
drug waste and its associated costs. Recommendations should consider 
collateral impact on all stakeholders' perspectives, such as Federal 
programs, private insurers, and beneficiaries who pay for wasted drug 
products, as well as pharmaceutical industry and physician,

[[Page 48358]]

clinic, and hospital practices that receive reimbursement for wasted 
drug products.

III. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

    Dated: September 6, 2019.
Seema Verma
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2019-19885 Filed 9-12-19; 8:45 am]
 BILLING CODE P