CMS Advances Efforts to Lower Medicare Prescription Drug Prices

The Centers for Medicare and Medicaid Services (CMS) have taken the next step on the Medicare Prescription Payment Plan draft guidance, which is required by the Inflation Reduction Act of 2022 to advance President Joe Biden’s plan to lower drug costs for seniors.

The draft guidance provides communication and education requirements for beneficiaries with Medicare Part D who are anticipated to benefit from the program. Healthcare Finance reports that the guidance is meant to go hand-in-hand with the national education and outreach efforts that will engage all interested parties including retailers, providers and advocacy groups.

According to the CMS guidance, the agency is soliciting responses to the draft of the two-part guidance, and any comments should be received by March 16, 2024.

From CMS Administrator Chiquita Brooks-LaSure in the CMS press release:

People with Medicare prescription drug coverage should look at the Medicare Prescription Payment Plan as well as our Extra Help program to see what programs are right for them. CMS is continuing to implement the many important provisions of the Inflation Reduction Act on time to help older Americans and people with disabilities afford the care they need.

In addition to the guidance, CMS published the transcripts from the agency’s listening sessions that focus on the ten drugs selected for the drug price negotiation program. According to RAC Monitor, the purpose of the sessions was to discover Medicare Part D enrollees’ access to and utilization of these medications. Medicare Part D plans will be required to cover the drugs in “all available dosages and forms,” and CMS will monitor their placement on regulatory tiers.

The Department of Health and Human Services (HHS) is having a more difficult time negotiating the “maximum fair price” for these negotiated drugs. Managed Healthcare Executive explains that the IRA’s requirement that other costs beyond the simple manufacture of the drug be included in the determination for the MFP may cause the subsequent MFP to be higher than what “favored commercial payers” pay for the drug. From health policy and economics analysts Steven Lieberman, M.Phil., M.S., and Paul Ginsburg, Ph.D:

Having HHS set the [MFP] for Medicare without knowing the actual, post-rebate (net) prices received by a manufacturer from all payers — including Medicaid, the 340B program and commercial payers — creates uncertainty about the magnitude of the actual price cut and complicates understanding the value of a drug relative to therapeutic alternatives.