CMS NEWS
FOR IMMEDIATE RELEASE
August 7, 2018
Contact: CMS Media Relations
(202) 690-6145 | CMS
Media Inquiries
CMS empowers patients
with more choices and takes action to lower drug prices
Agency is providing flexibility through private sector tools to
negotiate lower prescription drug prices on behalf of beneficiaries
Today, the Centers for Medicare & Medicaid Services (CMS) delivered
on President Trump’s promise to negotiate better deals for Medicare
patients and create competition between drugs used to treat the same
conditions, with more than half of the savings required to be passed on
directly to patients. This action gives Medicare Advantage plans the option
of applying step therapy for physician-administered and other Part B drugs
and is an important step within the Administration’s larger agenda to
provide patients with more choices when picking a Medicare Advantage plan
that best meets their needs.
For the first time, CMS will provide Medicare Advantage plans — private
health insurance plans that provide Medicare benefits to 20 million
Medicare beneficiaries (a third of all beneficiaries in Medicare) — the
option of negotiating for Part B drugs in a way that lowers costs and
improves the quality of care. Medicare Advantage plans that also offer a
Part D benefit will be able to cross-manage across Part B and Part D, so
that patients receive the best medicine whether it is
physician-administered or self-administered. CMS is also putting American
Patients First by making sure that Medicare Advantage plans negotiate
in a way that ensures patient choice and provides patient protections with
guardrails, including that step therapy can only be applied to new
prescriptions for patients who are not actively receiving a given
medication.
“President Trump promised better Medicare negotiation and lower drug
prices for the American people. Today, we are taking an important step in
delivering on that promise,” said HHS Secretary Alex Azar. “As soon as next
year, drug prices can start coming down for many of the 20 million seniors
on Medicare Advantage, with more than half of the savings going to
patients. Consumers will always retain the power to choose the plan that
works for them: If they don’t like their plan, they don’t have to keep it.
We look forward to seeing the results of tougher negotiation within
Medicare, and expanding successful negotiation tools throughout our
programs.”
“Under the President’s leadership, for the first time ever, CMS is
bringing negotiations to physician-administered drugs and delivering on our
promise to lower drug prices for patients,” said CMS Administrator Seema
Verma. “For too long, Medicare Advantage plans have not had the tools to
negotiate a better deal for patients. Today we begin lifting those barriers
so plans can use private-sector tools to drive down the cost of expensive
drugs while also offering new care coordination and drug adherence
programs, to ensure that patients are getting high quality care at lower
cost.”
In a memo sent to Medicare Advantage plans, CMS is giving them the
option – starting January 1, 2019 – of ensuring that patients receive the
most preferred drug therapy first and progress to other therapies only if
necessary, as part of broader part of care coordination activities.
Ensuring that patients receive the most preferred drug therapy first is
known as “step therapy.” For example, plans may now ensure that a
beneficiary who is newly diagnosed with a condition begin treatment with a
cost-effective biosimilar before progressing to a more costly drug therapy
if the initial treatment is ineffective, while ensuring that patient
receives over half of the savings generated through these approaches. This
change will only apply to newly prescribed medications.
CMS is allowing Medicare Advantage plans to take advantage of step
therapy for Part B drugs, which constitute around $12 billion per year in
spending by plans. Medicare also pays for prescription drugs through Part
D, which covers patient-administered drugs that beneficiaries usually pick
up at a pharmacy. As part of the policy announced today, Medicare Advantage
plans that also offer a Part D benefit will be allowed to manage within
their Part B benefit as well as cross-manage across Part B and Part D.
As Administrator Verma said in a speech
to the Pharmacy Quality Alliance on May 16 2018, “We often don’t see the
full benefits of competition in Part B, because some drugs within a
therapeutic class have a competitor in Part D.” As a result of the agency’s
action today, the Medicare Advantage plans that choose to offer this option
will be able to have medicines in Part B compete on a level playing field
with those in Part D. The agency will be closely following the impact
of this policy as a model for further reform.
If a plan decides to offer this approach to enrollees in 2019, it must
be explicitly communicated to beneficiaries through the Annual Notice of
Change and Evidence of Coverage documents. Patients that do not wish to
participate in a plan that takes advantage of this approach to lower costs
will have the option to select a different plan. This new approach must be
coupled with care coordination services to support a move towards paying
for value. Care coordination must include discussing medication options
with beneficiaries; providing beneficiaries with education and information
about their medications; and implementing adherence strategies for
beneficiaries on their medication regimen.
Bringing negotiation to Medicare Part B is a key pillar of the
Administration’s Blueprint to reduce prescription drug costs, and the
agency will continue to take actions that advance this goal. In another
step to promote this objective, CMS recently released a Request for
Information as part of the CY 2019 Medicare Hospital Outpatient Payment
System proposed rule on how to develop a model test that leverages the
authority provided to the agency under the Competitive Acquisition Program
(CAP) to strengthen negotiations for Part B drugs.
To view the memo that was sent to Medicare Advantage plans, please visit:
https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/Downloads/MA_Step_Therapy_HPMS_Memo_8_7_2018.pdf.
To view a fact sheet on allowing Medicare Advantage plans the option of
applying step therapy for physician-administered and other Part B drugs,
please visit: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-08-07.html.
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