Study Finds CMS' Nixed Change to Part D Could Have Hindered Drug Accessibility

This post originally appeared in Fierce Healthcare on July 16, 2019. 

A new study found a Trump administration proposal to rein in prices on certain drugs under Medicare Part D would have made drugs less accessible to patients. The study, published Tuesday in the Journal of the American Medical Association, explored price hikes over a five-year span for products in protected classes. Medicare Part D requires plans to add to their formularies products in six classes that include antidepressants, antipsychotics and immunosuppressants.

---

The study comes a few months after the Centers for Medicare & Medicaid Services (CMS) spiked a controversial rule that would have enabled Part D plans to exclude some protected classes from their formularies. Last year, CMS proposed to give Part D insurers the ability to excluded protected-class drugs from their formularies if the price exceeded a certain threshold or if it was a new formulation for an existing single-source drug. 

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

The study looked at Medicare spending on protected-class drugs from 2012 to 2017 using CMS data. The authors did not include generic drugs or biosimilars in the study nor non-innovator products. The study also looked at the final price that Part D paid for those drugs after factoring in rebates and discounts to the drug.

Overall, there were 143 brand-name protected-class drugs included in the analysis. Of those products, the prices for 126 (88%) increased faster than the rate of inflation over a one-year period.

"Under current drug pricing trends, nearly all protected-class drugs could be excluded by Medicare Part D plans under the proposed rule," the study said.

The CMS proposal to allow companies to drop protected-class drugs got stiff pushback from patient advocacy groups that questioned whether the proposal would stifle access to needed treatments. CMS also scaled back a proposal that would have allowed Part D sponsors to use prior authorization and step therapy formulary management tools on protected-class drugs, which is currently prohibited.

The agency did finalize a change that enabled Medicare Advantage plans to implement step therapy for drugs covered under Part B.

The Trump administration has experienced a series of setbacks in its efforts to lower Medicare drug spending. Earlier this month, the White House nixed a proposed rule to eliminate the anti-kickback statute’s safe harbor on drug rebates because of concerns over increasing premiums for seniors on Part D.  

The study urged caution with any future proposals to reform the protected-class policy, noting both the Trump and Obama administrations have tried to reform protected classes to no avail.

“Although reforming this policy may generate cost savings for the Medicare program, the potential effects of this rule on patient access and outcomes should be carefully considered,” the authors said.