This post originally appeared in Politico Pro on January 29, 2019.
Industry and patient groups alike are pushing back on a CMS proposal to give Medicare Part D and Medicare Advantage plans power to limit coverage of “protected class” medicines in a bid to lower government spending. The deadline to submit comment on CMS’s proposal, Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses, was Jan. 25 and hundreds rolled in. While the proposed rule lays out a number of strategies, the top item would give plans broader negotiating tools — including step therapy and prior authorization — for anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals and immunosuppressants.
Health plans are currently required to cover all therapies in those six categories. CMS estimates that the change would save the government nearly $2 billion.
The CMS proposal also would change drug reimbursements, requiring health plans to factor pharmacy price concessions and dispensing fees into beneficiaries’ costs. The move would lower out-of-pocket spending but could also raise premiums.
But the proposed rule has met resistance. More than 140 patient groups sent a letter to CMS this month urging it not to make changes to the protected class policy, saying it would add new barriers for already-vulnerable patients.
Here are some highlights of comments from key players:
PhRMA: The drug lobby strongly urged CMS not to finalize changes for the six protected classes. PhRMA said allowing step therapy or prior authorization for drugs in the protected class is unnecessary, could spark health consequences and would raise legal concerns around Part D’s non-discrimination policy — namely, that changes could jeopardize coverage for vulnerable beneficiaries without driving significant savings. “These proposed exceptions sharply diverge from the understanding of the protected classes policy that CMS and Congress have long shared,” PhRMA wrote. It instead recommended requiring plans to pass through rebates and discounts to beneficiaries to save money.
Pharmaceutical Care Management Association: On the other side of the table, the pharmacy benefit managers “recommend eliminating the protected class requirements altogether” — but in the absence of that more radical move, PCMA wrote that it supports all of CMS’s policy changes for the six drug groups. PCMA also strongly backed CMS’s step therapy plan for Part B but came out against the price concessions proposal, saying that it would hamper competitions among plans and pharmacies and drive higher premiums.
AHIP: The insurance lobby backs provisions to expand formulary and other negotiating tools to the protected class, but has “serious concerns” about other aspects of the rule. Requiring inclusion of all possible pharmacy concessions in Part D’s point-of-sale price “will not address the root cause of the pharmaceutical price and cost crisis, which is high drug prices and price increases driven entirely by drug manufacturers.” AHIP contended that the price concessions proposal would raise Part D bids, leading to higher premiums or reduced benefits.
Pew Trusts: The think tank advised CMS to rethink a plan to base beneficiaries’ copayments on the lowest possible net pharmacy payment rather than the pharmacy’s initial payment, saying that while the change would reduce beneficiaries’ spending, it would drive higher premiums and even manufacturer revenues, because fewer patients would hit the coverage gap where drugmakers pick up most of the costs. Pew recommended adopting parts of the rule that would lower out-of-pocket spending, but maintaining the current cost calculations that drive beneficiaries through the coverage stages.
The National Pharmaceutical Council: The biopharmaceutical-backed research group urged CMS to leave protections intact for the six drug categories, saying that while “it is easier to consider the needs of large populations or provide treatment options based on how ‘average’ patients fare,” research shows that patients often respond in different ways to the same treatment — necessitating different options and individualized treatment. The group also pushed for step therapy strategies to be about clinical goals rather than cost reducing, and said several states have adopted that approach.
American Academy of Family Physicians: The organization supports the plan to reduce patients’ out-of-pocket spending by paying the negotiated price for drugs, and also backed smaller provisions in the rule such as including descriptions of lower-priced options in beneficiaries’ explanation of benefits. But AAFP said it opposes the protected class changes as an action that could limit patient access to prescribed medicines. It also came out against step therapy moves for Part B, saying that it “urges the Administration to address drug prices, but not by imposing further prior authorizations onto physicians.”
American Medical Association: The biggest physicians lobby said that CMS’s proposals would “limit access to medically necessary treatments for Medicare beneficiaries, increase administrative burdens on physicians and do little to meaningfully reduce the financial burdens faced by patients.” AMA argued that the six protected classes usually entail personalized drug regimens that would be threatened by step therapy and prior authorization, which could interrupt treatment. It also expressed concern over restricting access by barring newer formulation of old therapies and drugs with price hikes above the rate of inflation.
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