PhRMA Submits Comments on CMS Proposed Rule Regarding Modernizing Part D and Medicare Advantage

In November 2018, the United States Centers for Medicare & Medicaid Services (CMS) released a proposed rule with the intent to amend the Medicare Advantage (MA) program regulations and Part D regulations to support health and drug plans’ negotiation for lower drug prices and reduce out-of-pocket costs for MA and Part D enrollees. For a refresher on the proposed changes, see our article here.

The Pharmaceutical Research and Manufacturers of America (PhRMA) submitted comments in response to the proposed rule, noting that while CMS is trying to make changes that will lower drug prices and reduce out-of-pocket costs for patients, the group does not believe “that the changes to six protected classes would lower out-of-pocket costs for patients taking brand medicines.” PhRMA cited to previous comments in which it supported “several policies that would promote competition, reduce current market distortions that can lead to higher list prices, and improve affordability for patients.” PhRMA mentioned its belief that if CMS prioritizes policies that address perverse incentives in the current system while still ensuring patients’ access to medicines remains strong, that would be the best path forward.

Changes to Six Protected Classes Should Not be Finalized

As noted above, PhRMA disagrees with CMS’ proposal to make changes to six protected classes, saying such changes “could have serious health consequences for patients if finalized and are not necessary given that plans already have tools to manage utilization in these classes and significant savings from the proposed changes are unlikely.”

Proposed MA Step Therapy Policy for Part B Medicines

PhRMA also voiced its disapproval of allowing MA plans to use step therapy for Part B medicines, noting that “step therapy puts vulnerable patients who need access to life-saving medicines at risk by increasing access and adherence issues that can lead to poor health outcomes and increased costs,” in addition to interfering with provider autonomy.

In addition to the practical reasons PhRMA disagrees, it also stated that such a proposal is prohibited by statute as the Social Security Act requires that MA plans provide the same benefits as provided in Original Medicare and that CMS lacks the authority to permit MA plans to impose step therapy restrictions on Part B drugs that are not required by Original Medicare.

Real-Time Cost Sharing Tools

PhRMA believes that the real-time benefits tool CMS has proposed as part of Medicare Part D would be able to “facilitate more meaningful conversations” and “shared clinical decision making,” but that there would need to be additional details worked out for such tools to reach their full potential.

Requirements for Drug Price Information in Part D EOBs

PhRMA took issue with the proposed changes to explanation of benefits (EOBs). The proposed change would require that EOBs include information on negotiated drug price changes and lower cost therapeutic alternatives. However, PhRMA believes that EOBs need to provide information that help patients be informed healthcare consumers and that implementing the changes proposed by CMS may actually result in confusion for patients.

Changes to “Negotiated Price”

While not a formal proposal, CMS is considering changing the definition of “negotiated price” to allow for all pharmacy discounts to be reflected in the drug prices that patients pay at the point of sale. PhRMA believes, however, that such a change would be a “missed opportunity to also require that Part D plan sponsors pass through a share of manufacturer rebates and other price concessions to further reduce negotiated price.”

Conclusion

All comments on the proposed rule were due January 25, 2019. Therefore, we can expect that at this time, CMS is reviewing the comments and will provide an update in the coming months. For more information on PhRMA’s comments, including the complete 46-page letter, look at their website here.