The Centers for Medicare and Medicaid Services issues a number of proposals that could reduce the price of prescription drugs on Medicare plans.
The Trump administration continues to push forward with plans that will lower prescription drug prices for Medicare patients. On Monday, the Centers for Medicare & Medicaid Services issued a proposal that could give insurers increased power to negotiate for lower prices on certain drug types.
The proposal builds on the Trump blueprint to lower drug prices that was announced earlier this year by the White House. Any changes that are approved will not take place until at least 2020.
“Today’s changes will provide seniors with more plan options featuring lower costs for prescription drugs, and seniors will remain in the driver’s seat as they can choose the plan that works best for them. The result will be increasing access to the medicines that seniors depend on by lowering their out-of-pocket costs,” CMS Administrator Seema Verma said in a statement.
For the Medicare Part D plan, the new proposal aims to lower prices through negotiated discounts for “protected” therapeutic areas. According to the CMS plan, the proposal will allow Part D sponsors to implement broader use of prior authorization and step therapy for protected class drugs, including to determine use for protected class indications, as well as 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. Also, the proposal will allow for the exclusion of a protected class drug from a formulary if the price of the drug increased beyond a certain threshold over a specified look-back period, according to a release from the agency. The drug classes the CMS proposal includes are antidepressants; antipsychotics; anticonvulsants; immunosuppressants for treatment of transplant rejection; antiretrovirals; and antineoplastics; except in limited circumstances.
The agency will also provide a pathway that will allow Part D providers to update e-prescribing methods that will let doctors and prescribers know when lower-cost alternatives are available under the insurance program. The CMS said this can improve medication adherence, lower prescription drug costs, and minimize beneficiary out-of-pocket costs.
Also for Part D, the CMS proposal will require the inclusion of drug pricing information and lower cost therapeutic alternatives in the Explanation of Benefits that the Part D plan sends to members. CMS said the information will inform beneficiaries about ways to lower out of pocket costs through cheaper medication alternatives.
Another proposal the CMS intends to implement is a step-therapy for Part B drugs. In its announcement, CMS called step-therapy “a utilization management tool will better enable MA organizations to ensure that Medicare beneficiaries pay less overall or per unit for 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, CMS said.
Another proposal made will re-define negotiated price as the baseline payment to a pharmacy. As the CMS noted, the negotiated price is the price reported to the CMS at the point of sale. That is used to calculate beneficiary cost-sharing and “generally adjudicate the Part D benefit,” the CMS said. However, in its announcement, the CMS said oftentimes the negotiated price is increasingly higher than the final payment to pharmacies “unless it incorporates the large price concessions that result from these arrangements.” Those higher negotiated prices lead to higher beneficiary cost-sharing, according to the announcement.
“The policy we are considering would reduce beneficiary out-of-pocket costs, and improve price transparency and market competition under the Part D program,” the agency said in its proposal.
