CMS Again Scraps Proposal To Weaken Protected Drug Classes

This post originally appeared in Inside Health Policy on May 16, 2019. 

Two consecutive administrations have failed to follow through with proposals to weaken Medicare Part D coverage protections in six drug classes. CMS again scrapped the idea in a final Part D rule it issued Thursday (May 16). When it proposed the rule last November, the agency had called for letting Part D plans exclude drugs in protected classes from formularies when their makers raise prices faster than inflation or when drug companies make new formulations of drugs already on the market. The proposed rule also called for allowing Part D plans to more broadly use step therapy and prior authorization for protected class drugs.

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However, CMS backed off all changes to the protected classes.

“This rule cements Medicare’s protected classes policy as an essential patient safeguard in Medicare’s prescription drug program,” said Chuck Ingoglia, executive director of the Partnership for Part D Access.

Patient groups had lobbied hard against the proposal and heaped praise on the administration for backing down. A bipartisan group of more than 70 House lawmakers also urged CMS to withdraw the proposal.

However, CMS kept a separate step therapy policy it proposed. The final rule lets Medicare Advantage plans use step therapy for Part B drugs. One of the main goals of that policy is to let plans require that patients try biosimilars before branded reference biologics. Insurers may only impose step therapy on patients who are starting on a medication.

Pharmacy benefit managers are pleased CMS did not change the treatment of pharmacy price concessions. CMS informally proposed subtracting fees that PBMs charge pharmacies from prices that seniors pay when they pick up drugs at the pharmacy. Pharmacists lobbied White House budget officials in the lead up to the final rule’s release to argue for including the informally proposed changes in the final rule.

However, the agency didn’t back off the pharmacy price concessions proposal, on which it received more than 4,000 comments.

“CMS will continue to carefully review these comments as we continue to consider policies that would lower prescription drug costs, address challenges that independent pharmacies face, and improve the quality of pharmacy care,” a CMS fact sheet states.

The final rule will require Part D plans to inform members on their explanation of benefits of drug price increases and cheaper therapeutically equivalent drugs, starting 2021.

The rule also implements a new law that prohibits pharmacy gag clauses in Part D.