Public Policy

Many legislative issues affect Baxter's business—reimbursement, tax, trade and a variety of regulatory concerns. Baxter's Government Affairs and Public Policy (GAPP) team works with lawmakers, governments and policymakers around the globe to support patient access to the company's life-saving therapies, increase understanding of the benefits of those therapies, address barriers to care and explore possible solutions. This work involves dealing directly with governments to improve the regulatory environment and reimbursement structure for Baxter's therapies, and collaborating with clinicians, non-governmental organizations and patient groups to increase access to care for millions of patients worldwide.

The Public Policy Committee of Baxter's Board of Directors oversees Baxter's government affairs activities. The committee reviews Baxter's political contributions, positions on pending legislation and political advocacy activities. For additional information on Baxter's government affairs activities, please refer to Baxter's 2011 Political Contributions Report. This report includes details about contributions made by Baxter and Baxter's Political Action Committee, BAXPAC, in 2011 as well as information about Baxter's membership in certain trade and industry groups.

Healthcare Reform

Advancing Advocating for Patient Access within Insurance Exchanges

In response to inefficiencies, rising costs and disparities in the level of care within the healthcare system, large-scale healthcare reform efforts are underway in the United States to expand access to care and reduce expense. Baxter remains committed to advocating for changes that are in the best interests of its patients.

Health insurance exchanges—electronic platforms implemented by states which individuals and small employers can use to identify and compare private health plans or enroll in public health coverage—are mandated by the United States’ 2010 Patient Protection and Affordable Care Act. The company supports its patients with rare diseases in advocating health insurance exchanges to: recognize rare diseases; include adequate number of in-network providers and allow patients with extremely rare diseases access to out-of-network providers without incurring excessive costs; access to all medically necessary therapies; access to all sites of care determined by healthcare provider and patient; ensure cost sharing does not discriminate or unfairly target any patient or rare disease group; access to third party cost sharing (premium, co-pay and co-insurance) assistance and due process and transparency to management utilization and medical necessity determinations, appeals and grievances.

Adhering to the Physician Payments Sunshine Act

Beginning January 1, 2013, companies operating in the United States that manufacture covered drugs, devices, biologics and medical supplies will be required to report to the Centers for Medicare and Medicaid Services (CMS) all payments (such as consulting fees, travel and lodging, meals, education grants and royalties) given to U.S. physicians and teaching institutions that total more than $100. The first report will cover payments made in 2012. Baxter is working toward implementing the new federal requirements that ensure its disclosures are complete and accurate.

Supporting Rare Disease Research through the Patient-Centered Outcomes Research Institute (PCORI)

Baxter’s pharmaceutical products have rarely been the subject of comparative studies, as these tend to focus on prevalent diseases rather than the rare diseases related to Baxter’s therapies. However, Baxter has and will continue to support efforts by patient groups to ensure that any rare disease research that is conducted by governments be reviewed and guided by a special advisory committee on rare diseases, composed of scientific and health services experts, clinicians, patients, and others with expertise in rare diseases. A requirement for such an advisory body, supported by Baxter, was included in the Patient Protection and Affordable Care Act to guide the work of the newly established Patient-Centered Outcomes Research Institute (PCORI). Baxter will work with patient groups and other stakeholders to insure its implementation by PCORI as that new agency begins its work.

Providing Internet Resources to Patients and Customers

To further assist patients and customers in implementing healthcare reform at the state level, Baxter created an Internet tool that is included in the company’s patient and customer-focused websites below. These sites provide specific information for patients living with hemophilia and end-stage renal disease, as well as hospital customers:

• Hemophilia
• End Stage Renal Disease
• Acute and Ambulatory Centers

Safety and Quality

Advocating for Safety within Australia’s Medicines Compounding Environment

Compounding, a process by which doses of medicine are mixed and prepared before administering to patients, has changed significantly over the years as technology has become more sophisticated. Baxter, which operates pharmacy compounding centers worldwide through Baxter Pharmacy Services, has been a key industry advocate of modifying safety regulations to keep pace with these changes. These efforts have been notable recently in Australia, where Baxter has six compounding centers licensed by Australia’s Therapeutic Goods Administration (TGA) that provide patient-specific sterile injectable compounded solutions for hospitals throughout the country.

Recognizing the high risk nature of many of the drugs involved in compounding, the TGA proposed a regulatory amendment to the Commonwealth’s Therapeutic Goods Act 1989 to replace these regulations with more appropriate requirements for today’s compounding practices. The changes under discussion will ensure that a far greater proportion of sterile injectable doses are prepared under appropriate aseptic Good Manufacturing Practice conditions. For several years, Baxter has advocated for these changes, working in collaboration with the TGA, politicians and other stakeholders.

The TGA is expected to publish its final proposal for regulatory amendment this year.

Continuing to Advance Standards in Device Identification

Baxter strongly supports efforts to implement standards for the healthcare industry regarding personal identification measures for medical devices. The company has advocated for legislation to promote these measures, including the Unique Device Identification Law passed in 2007 in the U.S., and endorses the GS1, an association which designs and manages a global system of supply chain standards.

Baxter believes that industry-wide adoption of these standards will improve patient safety and will drive increased efficiency and integrity within healthcare. To this end, the company is working with industry partners to implement GS1 standards for healthcare. These include standard location numbers that simplify how customers order and are invoiced for products and standard product numbers that make it easier to consistently identify Baxter products. Industry adoption of GS1 healthcare standards will help ensure that Baxter products are moved correctly and efficiently throughout the supply chain. Ultimately, adoption of these standards will enable healthcare professionals to ensure they are administering the right product to the right patient at the right time. See Product Integrity.

Access to Healthcare

Medicare IVIG Access Act

Roughly 10,000 Medicare beneficiaries in the United States have been diagnosed with one of the approximately 150 different diseases classified as primary immunodeficiency diseases (PIDD). PIDD prevents patients from fighting infections, making the body highly susceptible to a range of conditions. Intravenous immune globulin (IVIG) therapy is vital in treating patients with PIDD. For many people with this condition, home treatment is appropriate because of the increased risk of infection associated with receiving care in other health care settings.

In 2003, Congress changed the law to allow Medicare beneficiaries with PIDD to receive IVIG treatments at home. However, the law failed to include reimbursement for the necessary nursing services and supplies.

In May 2011, Representatives Kevin Brady (Republican, Texas) and Doris Matsui (Democrat, California) and Senators John Kerry (Democrat, Massachusetts) and Lamar Alexander (Republican, Tennessee) introduced companion legislation to fix this problem— H.R. 1845/S. 960, the “Medicare IVIG Access Act.” Baxter supports this bill, and is lobbying for its enactment, which would provide Medicare reimbursement for the nursing services and supplies associated with home infusion of IVIG therapy for PIDD patients.

Cuts to Medicare Physician Reimbursement

For many years, Medicare beneficiaries with PIDD received IVIG treatments in their physicians’ offices. Medicare Part B reimbursed physicians for office administration of drugs at the Average Wholesale Price (AWP) minus five percent. While AWP was higher than what physicians actually pay for the drugs, the reimbursement rate was justified by assuming the difference was used to offset drug management costs.

In 2003, the Medicare Modernization Act (MMA) was signed into law, changing the basis for Part B drug reimbursement from AWP to Average Sales Price (ASP) plus 6 percent. For many physicians, this change resulted in significant reductions in reimbursement, prompting many to discontinue IVIG administration to Medicare beneficiaries in their office. As a result, patients were forced to travel greater distances to receive their treatment in hospital outpatient departments, where they are more susceptible to infections.

In 2011, Congress debated legislation to lower the federal budget deficit. During this process, some in Congress considered lowering physician reimbursement for Part B drugs from ASP +6% to ASP +4% or lower, as well as changes to the ASP calculation altogether. These changes would have had the potential to exacerbate the existing problem.

In response, Baxter GAPP lobbied to maintain the current method of reimbursing Medicare providers for the administration of drugs in their office, stressing that the alternative would subject patients with chronic, immune-compromising conditions to receive care in suboptimal sites and risk exposure to life-threatening infections. Ultimately, Congress chose not to make alterations to the Medicare physician reimbursement.

Educating Health Policy Makers in China and Taiwan about Access to Dialysis Care

As a leading provider of products for peritoneal dialysis (PD), the predominant home-dialysis therapy for patients with end-stage renal disease (ESRD), or irreversible kidney failure, Baxter works with governments worldwide to increase access to PD. This can provide cost and quality-of-life benefits compared to in-center dialysis.

In 2011, Baxter’s GAPP department in China, supported by Asia Pacific GAPP, organized seminars for key health policy makers in China and Taiwan on the new U.S. dialysis payment program. The session in China, co-organized by the China National Health Economics Institute, included representatives from the Ministry of Health (MOH), national and provincial pricing agencies and other relevant policy makers. Taiwan’s event drew in members of the Bureau of National Health Insurance (BNHI).

The seminars highlighted recent U.S. legislative and regulatory changes to ensure that Medicare payment for PD is equal to that of in-center hemodialysis (HD). The majority of ESRD patients are suitable for both dialysis treatments, and research shows that PD has equal, or in some patient groups, better clinical outcomes than HD and may be more cost-effective in Asia Pacific countries. Despite these benefits, PD remains underutilized in the Asia Pacific region.

The seminars helped to further raise awareness to enhance patient access to PD. Also as a result, Taiwan’s BNHI recently announced a new five-year plan to enhance chronic kidney disease and ESRD patient care by increasing the percentage of PD patients (of the total dialysis patient population) through various initiatives. These include educational efforts targeting patients and healthcare providers, investigations into cases of PD patient issues, and review and adjustment of the PD reimbursement system.