CMS Finalizes Rule on Medicare Price Transparency
Posted on: Friday, May 17, 2019 By: KorchekStaff
WASHINGTON -- The Centers for Medicare & Medicaid Services has finalized a rule aimed at making prices more transparent with Medicare Part D drug plans and allowing plan sponsors to use cost-cutting tools such as step therapy under certain circumstances.
"CMS is delivering on price transparency, because patients have a right to know the cost of their healthcare services before they receive them," CMS Administrator Seema Verma said in a statement Thursday afternoon. "Today's rule requires Part D plans to adopt tools that provide clinicians with information that they can discuss with patients on out-of-pocket costs for prescription drugs at the time a prescription is written. By empowering patients with information on the cost of their prescription drugs, today's rule will ensure that pharmaceutical companies have to compete on the basis of price. This effort builds on new requirements for hospitals to disclose chargemaster prices and other agency initiatives to promote price transparency."
For the six "protected" classes of drugs that each Part D plan is required to cover -- antidepressants; antipsychotics; anticonvulsants; immunosuppressants for treatment of transplant rejection; antiretrovirals; and antineoplastics -- the rule also continues the current policy on step therapy, in which a health plan can require patients to try and fail a less expensive drug or therapy for a particular condition before being covered for a more expensive treatment.
"Under current policy, Part D sponsors are only permitted to impose prior authorization and step therapy requirements for beneficiaries initiating therapy (i.e., new starts) for 5 of the 6 protected classes, with no prior authorization or step therapy allowed for antiretrovirals," the agency said in a fact sheet on the final rule. "The final regulatory provision codifies this existing policy, which has been in effect since 2006."
The rule also permits step therapy for Medicare Advantage (MA) plans who also cover drugs under Medicare's Part B program, which applies to drugs administered in the physician's office. "We believe that use of step therapy as a utilization management tool will better enable MA organizations to ensure that Medicare beneficiaries pay less overall or per unit for Part B drugs," CMS said in the fact sheet. However, the agency noted that there would be some safeguards for step therapy: "[It] may only apply to new starts of medication, must be reviewed and approved by the plan's pharmacy and therapeutics committee, and when patients request coverage of or appeal a denial of a Part B drug, a plan's decision-making timeframe will be shorter and mirror current Part D rules."
CMS decided, however, against allowing Part D plans to exclude protected-class drugs when their prices rise faster than overall inflation. "We received many comments regarding this proposal, including commenters that supported this proposed exception, and agreed with CMS that this flexibility would allow plans more negotiation power with manufacturers on protected class Part D drugs," CMS noted in the final rule. "However, we also received many comments urging us not to finalize this proposed exception highlighting concerns with beneficiary access, and inability to adequately address rising launch prices, among other concerns. Based on the comments and responses summarized below, we are not finalizing this proposed exception."
The final rule also implements a statutory requirement, recently signed by President Trump, that prohibits pharmacy gag clauses in Part D. "This provision supports the President's initiative to help lower out-of-pocket costs of prescription drugs for Medicare beneficiaries by helping inform them about lower cost alternatives," the fact sheet noted.
Healthcare organizations were generally pleased with the final rule. "We appreciate the administration taking steps to allow for greater use of PBM [pharmacy benefit manager] tools in Medicare's so-called 'protected classes,'" J.C. Scott, president and CEO of the Pharmacy Care Management Association, a trade group for PBMs, said in a statement. "PBMs agree that price transparency is needed for enhanced communication regarding drug costs among payers, prescribers, and beneficiaries. Providing real-time prescription benefit information empowers patients and their physicians to make better health care decisions."
"The National Kidney Foundation thanks ... CMS for its decision to not finalize changes to its protected class policy that would have made it more challenging for some transplant recipients to access immunosuppressive drugs that they need to prevent organ rejection when they are covered under Medicare Part D," the foundation said in a statement. "As initially proposed by CMS, the policies would have created broad exceptions to requirements that all immunosuppressive drugs be covered by Part D formularies. Since 2008, this requirement has ensured the safety of transplant recipients, nearly every one of whom depends on a tailored combination of immunosuppressive medications that must be taken every day to prevent organ rejection. By maintaining its protected class coverage policy for immunosuppressives prescribed under Part D, CMS is putting patient safety at the forefront."
One group was slightly more muted in its praise. "Current cancer patients will be relieved to hear their access to innovative new drug therapies will not be in question under this finalized rule," said Lisa Lacasse, president of the American Cancer Society's Cancer Action Network, in a statement, noting that oncology drugs "are rarely interchangeable."
"Concern remains, however, over how this [rule] may affect patients starting new therapies," she continued. "We will closely monitor implementation of this rule working to make sure all cancer patients have timely access to the therapies best suited to treat their disease."