Physician Specialty Groups Caution Against Proposed Drug Pricing Changes

Nine of the nation’s leading physician groups – including the American College of Rheumatology, American Academy of Neurology, American Academy of Ophthalmology, and American Urological Association – joined together this week to urge the Trump Administration to reconsider some of the policy changes suggested in recent drug pricing proposals that would have negative effects on patient care.

In a letter sent to U.S. Department of Health and Human Services Secretary Alex Azar, the groups cautioned that the Administration’s proposal to consolidate certain physician-administered drugs covered under Medicare Part B into the Part D program while reducing physician reimbursements for new drugs below the current payment rates would create access issues and force patients to seek treatment in higher-cost sites of care.

“While are we are supportive of some concepts recently presented, we do have serious concerns regarding other policy suggestions,” stated the letter, “We believe HHS should make policy proposals designed to reflect the needs of complex care patients, reduce administrative burdens, and increase access to care.”

In the letter, the groups note that Medicare Part B and D are different programs with differing formulary structures and that cost sharing would be difficult to consolidate without significantly increasing out-of-pocket costs for patients – especially those who have no choice but to rely on biologics. And because Medicare Part D does not allow for supplemental coverage, patients would be on the hook for larger portions of these expensive biologic therapies.

The groups also warned that changing Medicare Part D formulary standards to require a minimum of only one drug per class rather than the current two could limit patient’s access to the medical therapies judged to be the most effective choice by their physician.

Additional concerns centered on how the Administration’s proposal to reduce physician reimbursements for in-office treatment from the current ASP +6% (which is 4.3% due to sequestration) to Average Sales Price (ASP) +3% would be damaging to patient access. By reducing physician reimbursements below the cost of obtaining and providing these complex therapies, many practices – especially small and rural practices that are unable to negotiate bulk discounts from manufacturers – may be forced to stop administering biologic therapies to Medicare patients altogether, the specialty groups warn. This would drive patients into more expensive and less convenient settings to receive needed therapies – if such alternatives even exist.

In their letter, the groups are supportive of policies that would lower drug prices while at the same time increasing access to vital medications, including:

• Requiring Medicare Part D plans to apply a substantial portion of rebates at the point of sale;
• Establishing a beneficiary out-of-pocket maximum in the Medicare Part D catastrophic phase providing beneficiaries with better protection against high drug costs;
• Decreasing the concentration in the pharmacy benefit manager (PBM) market and other segments of the supply chain; and
• Providing guidance from CMS on how drug-related value-based contracts and price reporting would affect other price regulations.

“Our organizations are dedicated to ensuring that physicians have the resources they need to provide patients with high-quality care,” the letter concludes. “We look forward to being a resource to you and we welcome the opportunity to meet with HHS to discuss our concerns and positions in more detail.”