By
BRIANNA EHLEY (behley@politico.com; @BriannaEhley)
08/08/2018
10:00 AM EDT
With help
from Sarah Karlin-Smith, Victoria Colliver, Paul Demko, Rachel Roubein, Dan
Goldberg and Dan Diamond
CMS TAKES
STEPS TO LOWER DRUG SPENDING IN MEDICARE ADVANTAGE —
Medicare Advantage plans will soon be able to use step therapy for
physician-administered drugs, to help contain pharmaceutical costs, the
agency said Tuesday. Step
therapy generally requires a patient to start with the most cost-effective drug
option. Insurance companies have to give prior approval before more costly
medications are then administered. CMS previously discouraged plans from using
prior authorization for Part B drugs and prohibited step therapy, giving the
plans little ability to negotiate to bring down the cost of medicines, CMS
said.
Part B
spending by Medicare Advantage plans amounts to about $12 billion a year. The
change should lead to about a 15 percent to 20 percent reduction in spending
per year, Dan Best, an HHS adviser tasked to help guide drug policy, said on a
press call. More on the change from Pro's Sarah Karlin-Smith here.
How it's
playing ... Some policy analysts were immediately skeptical that the plan
would result in savings. John Leppard of Washington Analysis wrote in a note to
clients, “we are skeptical that the full extent of these potential savings
(predicated on experience in commercial markets) will be realized." Rick
Weissenstein of Cowen Washington Research Group shared that sentiment: “It is
unlikely this will significantly reduce drug spending overall but depending on
how aggressive MA plans want to be it could make a difference in some classes
of drugs."
That's
it? Some viewed the step as a bit of a letdown, since HHS Secretary
Alex Azar has been touting more sweeping changes to drug prices in Medicare
Part B, like letting the private sector insurance plans negotiate the costs of
the drugs in fee-for-service Medicare plans, which serve about two-thirds of
Medicare beneficiaries.
“The
rhetoric surrounding the proposal is out of step with what the administration
is actually doing, as has been true with many of this administration’s drug
pricing actions,” said Rachel Sachs, of Washington University in St. Louis.
Public
Citizen’s Peter Maybarduk called the move "the leftovers of the small
potatoes" compared to what the federal government could do "to make
medicines affordable." He added that "step therapy can come at the
risk of patients not receiving the treatments best suited to them."
Industry
not keen on the move ... "PhRMA has serious
concerns with the new CMS guidance regarding Medicare Advantage coverage of
Part B medicines and the implications for patients suffering from complex
conditions," said Nicole Longo, public affairs director for the drugmaker
trade group, echoing similar concerns raised by Public Citizen about how step
therapy could "delay patients' access to medicines they need."
Others
say it's a good first step ... “I think it’s a pretty bold
first move,” said Stacie Dusetzina, a drug pricing expert at Vanderbilt
University School of Medicine. The policy should push drug companies to
negotiate harder, because they will want to offer a price for their drugs that
won’t put them on a higher formulary tier that will require step therapy. She
expects there will be significant clinician push back to the plan however,
because step therapy typically requires a lot of paperwork to move patients
from one drug to the next if they fail the first treatment.
The
pharmacy benefit managers, who have received a lot of negative attention from
HHS on drug pricing, also praised the move.
Get ready
for another legal battle ... The Obama administration
issued a memo in 2012 indicating
that step therapy is legally forbidden in Medicare Advantage. That could leave
the Trump administration’s action open to a court challenge.
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