On Monday, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule and opened comments that attempts to give more leeway to limit coverage of drugs in protected classes. The proposed rule would only kick in when the price of a prescription rises more than the rate of inflation or if only minor changes are made to older products.
In order to be taken into consideration, comments on the proposed rule must be submitted no later than January 25, 2019.
Providing Plan Flexibility to Manage Protected Classes
One of the proposed changes relates to exceptions in managing protected class drugs. Currently, Part D policy requires sponsors to include on their formularies all drugs in six classes (except in very limited circumstances): (1) antidepressants, (2) antipsychotics, (3) anticonvulsants, (4) immunosuppressants for treatment of transplant rejection, (5) antiretrovirals, and (6) antineoplastics.
While the proposed regulatory provision maintains all protected classes, it provides Part D plans with a greater flexibility to negotiate discounts for drugs in protected therapeutic classes. The proposal would make three exceptions to that end – Part D plan sponsors would be able to:
- implement broader use of prior authorization and step therapy for protected class drugs, including to determine use for protected class indications;
- exclude a protected class drug from a formulary if the drug represents only a new formulation of an existing single-source drug or biological product, regardless of whether the older formulation remains on the market; and
- exclude a protected class drug from a formulary if the price of the drug increased beyond a certain threshold over a specified look-back period.
Real Time Benefit Tools
The proposal also attempts to accelerate the use of electronic Real Time Benefit Tools (RTBT) in the Part D program. CMS proposes that each Part D plan adopt a provider (i.e., EHR-integrated) RTBT beginning on or before January 1, 2020. According to CMS, RTBTs have the ability to inform prescribers when lower-cost alternative therapies are available under the beneficiary’s prescription drug benefit, which may lower prescription drug costs and minimize beneficiary out-of-pocket costs.
Medicare Advantage and Step Therapy for Part B Drugs
CMS is also proposing a policy similar to the one implemented for 2019, under which Medicare Advantage plans would implement step therapy for Part B drugs as a recognized utilization management tool. The proposed requirements include a number of safeguards that protect beneficiaries and ensure timely access to medically necessary Part B drugs. Under the proposal, step therapy requirements may only apply to new starts of medication, must be reviewed and approved by the plan’s pharmacy and therapeutics committee, and coverage requests related to Part B drugs will be subject to shorter adjudication timeframes that mirror the current rules in Part D.
Part D Explanation of Benefits
CMS proposes to amend regulations related to the Part D Explanation of Benefits to require the inclusion of drug pricing information and lower cost therapeutic alternatives in the Explanation of Benefits that Part D plans send members. This information will inform Medicare beneficiaries about possible ways to lower their out of pocket costs but taking a lower cost medication.
The rule is part of the Trump administration’s bid to lower pharmaceutical costs and estimated to save the federal government nearly $2 billion.