February 21, 2023
Health Policy Report – February 21, 2023
Dr. Debra Patt Testifies on PBMs at Senate Commerce Committee Hearing
On February 16, the Senate Commerce Committee held a hearing entitled “Bringing Transparency and Accountability to Pharmacy Benefit Managers.” The hearing featured testimony from Debra Patt, M.D., Ph.D., MBA, physician at Texas Oncology and Chair of The Network’s Public Policy and Reimbursement Committee.
In the hearing, lawmakers and medical experts discussed how the proposed S.127, the Pharmacy Benefit Manager (PBM) Transparency Act, introduced by Commerce Committee Chair Senator Maria Cantwell (D-WA) and Senator Chuck Grassley (R-IA), will bring transparency into PBM business practices and prohibit unfair or deceptive PBM conduct that drives up costs for consumers. Dr. Patt outlined how PBMs routinely delay appropriate and timely therapy and drive up costs for cancer patients through abusive tactics such as Direct and Indirect Remuneration (DIR) fees and patient steerage to PBM owned or mail-order pharmacies.
Dr. Patt emphasized that PBMs are putting the lives of patients at stake and commended lawmakers for shining light on this issue. “We urgently need PBM transparency and accountability, and this legislation takes steps to get us there,” she concluded.
To watch the full hearing, CLICK HERE.
To read Dr. Patt’s written testimony, CLICK HERE.
To read the bill text of S.127, the PBM Transparency Act of 2023, CLICK HERE.
To ask your Senator to cosponsor S.127, the PBM Transparency Act, CLICK HERE.
The Network Submits Comments to CMS on Proposed Prior Authorization Reforms
The US Oncology Network submitted comments to the Centers for Medicare & Medicaid Services (CMS) on its recent Medicare Advantage (MA) and Part D proposed rule for 2024. The Network applauded CMS for recognizing the barriers to timely access to care created by the increased use of prior authorization (PA) by MA plans and made several recommendations for further steps the agency could take to improve access for cancer patients.
CMS proposed to codify standards for coverage criteria to ensure that basic benefits coverage for MA enrollees is no more restrictive than Traditional Medicare. Noting the proposal followed an April 2022 report released by the HHS Office of the Inspector General that found MA plans sometimes delayed or denied prior authorization and payment requests even though they met Medicare coverage rules, The Network supported CMS’ proposal to inject much-needed transparency and accountability into the use of PA in MA and the development of MA plans’ internal coverage criteria. However, CMS stated it was not proposing to change the current authority for MA plans to use step therapy policies for Part B drugs. The Network urged CMS to reinstate its previous prohibition on step therapy for Part B drugs in MA plans, citing “fail first” therapy’s adverse effects on patient outcomes and healthcare costs. “As medicine becomes more and more tailored to the unique traits of individual patients, step therapy policies continue to force patients into a one-size-fits-all model of care that prioritizes potential cost saving over individualized treatment and patient health outcomes,” The Network explained.
The Network urged CMS to finalize its proposal to require MA plans to make approved prior authorizations valid for the entire treatment or service, citing changes driven by insurance often increase net costs to the healthcare system, resulting in treatment failure and increasing the chance for adverse events. The Network also supported the proposed requirement for plans to have a transition period for patients who switch to a new MA plan but cautioned that the 90-day period is insufficient for patients with treatment plans that extend beyond 90 days (such as metastatic patients or patients with breast cancer receiving adjuvant therapy).
Finally, The Network recommended that CMS require members of the proposed Utilization Management Committees to be comprised of board-certified physicians and expressed support for gold carding programs that can help alleviate the burden associated with prior authorization.
To read the Network’s comments, CLICK HERE.
HHS Selects Three New Drug Pricing Reform Models
On February 14, the Department of Health and Human Services (HHS) announced three new models aimed at lowering the cost of prescription drugs. In the report, HHS informed the Assistant to the President for Domestic Policy that the Centers for Medicare & Medicaid Innovation Center (CMMI) will develop models to pursue $2 copays for certain drugs in Medicare, align incentives for gene and cell therapies, and develop new payment methods for drugs approved under accelerated approval.
The three selected models are:
- $2 drugs in Medicare – Through this model, dubbed the Medicare High-Value Drug List Model, CMS will encourage Part D plans to offer generic drugs for common, chronic conditions for a flat $2 copay. While CMS did not identify which drugs might be included in this list, the report suggests that it would include a standard list of approximately 150 medicines.
- Paying for cell and gene therapies – Under the Cell and Gene Therapy Access Model, state Medicaid agencies will assign CMS to coordinate and administer multi-state, outcomes-based agreements with manufacturers for certain cell and gene therapies. This program would align incentives for new cell and gene therapies, paying manufacturers based on the effectiveness of their treatments for patients.
- Accelerated approval – The Center for Medicare and Medicaid Innovation (CMMI) plans to work with the FDA on a model called the Accelerating Clinical Evidence Model, which would develop payment methods for drugs approved under accelerated approval, with the aim of reducing Medicare spending on drugs that have no confirmed clinical benefit.
These policy experiments were developed in response to President Biden’s Executive Order last October, which aimed to lower prescription drug costs for Americans and builds on the drug-pricing reforms in the Inflation Reduction Act. CMS also plans to continue research into other possible future models, including ways to accelerate biosimilar adoption, increase data access to support price transparency, and implement a similar cell and gene therapy in fee-for-service Medicare.
There will be an implementation process that will allow for public input. The Cell and Gene Therapy Payment Model in Medicaid could launch as early as 2026, but launch dates were not provided for the other two programs.
To read the full report, CLICK HERE.
To read the fact sheet, CLICK HERE.
To read the Frequently Asked Questions, CLICK HERE.
HHS Releases Initial Guidance for Medicare Prescription Drug Inflation Rebate Program
On February 7, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a technical assistance brief that found several administrative challenges for Medicare in identifying drugs eligible for Part B rebates and excluding claims already subject to the 340B Drug Discount Program or the Medicaid Drug Rebate Program. To address these challenges, the report made several recommendations for implementing inflation rebates for drugs administered through Medicare Part B. Specifically, it called for the Centers for Medicare and Medicaid Services (CMS) to begin developing coding procedures to identify Part B drugs that are eligible for rebates under the Inflation Reduction Act (IRA). It also calls on CMS to explore ways to identify Part B drugs subject to Medicaid rebates as well as distinguish rebate-eligible Part B drugs from those subject to 340B discounts.
On February 9, HHS released its initial guidance for implementing the Medicare Prescription Drug Inflation Rebate Program, which the Biden Administration hopes will help lower drug costs. The program is intended to require pharmaceutical manufacturers to pay rebates to Medicare if the price of the Part B and Part D drugs they provide to Medicare beneficiaries rises faster than the rate of inflation. Under the program, the rebates would then be deposited in the Federal Supplementary Medical Insurance Trust Fund. CMS invited stakeholders to submit comments on the program and the implementation process by March 11.
Effective April 1, patients in both traditional Medicare and Medicare Advantage may pay lower coinsurance for Part B drugs meeting the criteria for the inflation rebate. To learn more about how the coinsurance and provider payment for Part B drugs meeting this criteria will be calculated, CLICK HERE.
To read the HHS OIG technical assistance brief, CLICK HERE.
To read a press release about the Drug Inflation Rebate Program, CLICK HERE.
To read a fact sheet about the Drug Inflation Rebate Program, CLICK HERE.
To read the CMS guidance on the Medicare Part B Drug Inflation Rebate, CLICK HERE.
To read the CMS guidance on the Medicare Part D Drug Inflation Rebate, CLICK HERE.
Senate Advances Series of Bills Aimed at Lowering Prescription Drug Costs
The Senate Judiciary Committee recently advanced multiple pieces of legislation related to prescription drug pricing – a sign that Congress is still pursuing the pharmaceutical industry in the wake of the Inflation Reduction Act (IRA).
One bill led by Sens. John Cornyn (R-TX) and Richard Blumenthal (D-CT), S.150 the Affordable Prescriptions for Patients Act, aims to prevent patent abuse by drug companies. If signed into law, the bill would prohibit drug companies from making minor changes to a drug to extend its exclusivity period and limit the number of patents a company can contest.
The Senate Judiciary Committee also passed S.79, the Interagency Patent Coordination and Improvement Act, which would establish a task force between the Food and Drug Administration (FDA) and the US Patent and Trademark Office to coordinate patent activities, and S. 113, the Prescription Pricing for the People Act, which would require the Federal Trade Commission (FTC) to study the role of intermediaries in the pharmaceutical supply chain.
The final bills that the Senate Judiciary Committee passed include S. 142, the Preserve Access to Affordable Generics and Biosimilars Act, which would prohibit brand-name drug companies from paying generic and biosimilar drugmakers in patent settlements to delay competition and S. 148, the Stop STALLING Act, which is intended to ensure the safety of drugs by giving the Federal Trade Commission more power to act against sham FDA petitions.
It remains unclear when the bills will advance in either the House or Senate. Though some lawmakers expressed concern that these initiatives will harm medical innovation, congressional health leaders remain optimistic about finding common ground.
To read more, CLICK HERE.
To read the text of S.150, the Affordable Prescriptions for Patients Act, CLICK HERE.
To read the text of S.79, the Interagency Patient Coordination and Improvement Act, CLICK HERE.
To read the text of S.113, the Prescription Pricing for the People Act, CLICK HERE.
To read the text of S.148, the STOP STALLING Act, CLICK HERE.
To read the text of S. 142, the Preserve Access to Affordable Generics and Biosimilars Act, CLICK HERE.
Coalition of Healthcare Organizations Asks Congress to Advance Value-Based Care Payment Reforms
A coalition of healthcare organizations, including the American Medical Association (AMA), Medical Group Management Association (MGMA), and others, recently sent a letter to the Senate Finance Committee, House Energy and Commerce Committee, and House Ways and Means Committee asking members to continue advancing the transition to value-based health care during the 118th Congress.
The coalition acknowledged that the bipartisan Medicare Access and CHIP Reauthorization Act (MACRA) increased Medicare clinicians’ participation in risk-based payment models, but the group believes that more needs to be done to improve the quality and cost-effectiveness of care provided.
“While MACRA was a step in the right direction, more needs to be done to drive long-term system transformations. Stabilizing Medicare’s payment system and ensuring payment adequacy will also help physicians invest in the infrastructure and staffing necessary to transition into value-based models,” the letter read. “We encourage your committees to hold hearings and engage with stakeholders to consider long-term approaches for advancing value,” it continued.
The groups specifically recommended Congress extend value-based care incentives, ensure participants join and remain in existing advanced alternative payment models (APMs), provide a broader, more predictable pathway for more types of clinicians to engage in APMs, and establish parity between APM and Medicare Advantage program requirements.
To read the full letter, CLICK HERE.