CMS Unveils Proposed Changes to Part D Drug Policies

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The Centers for Medicare & Medicaid Services (CMS) announced several new policies aimed at lowering drug prices for Medicare beneficiaries, but critics say the savings may be quite modest and that the proposals may reduce beneficiaries’ access to needed drugs.

“Foremost in our mind was the impact on patients and ensuring affordability and access to prescription drugs,” CMS administrator Seema Verma said Monday on a phone call with reporters. “From day one, President Trump has made it clear that lowering prescription drug costs is a top priority … and CMS is hard at work to make the president’s vision a reality, because the status quo is unacceptable.”

The proposals CMS announced Monday include:

Allowing Part D plans more flexibility to negotiate discounts for drugs in “protected” classes — groups of drugs for which Part D plans must cover every drug in the class. Beneficiaries who take “protected” drugs “haven’t seen the discounts that beneficiaries taking other drugs experience, and this is not fair,” CMS Administrator Seema Verma said on a phone call with reporters Monday. “Typical private market discounts for these drugs are in the 20%-to-30% range, but the average discount for all protected class drugs in Part D is just 6%…. Because every individual drug has to be covered, competition is thwarted.”

To encourage more price competition, CMS is proposing to allow Part D plans to exclude protected class drugs who increase prices greater than the rate of inflation, as well as drugs that are not a significant innovation over the original product, Verma said, noting that plans would be required to cover at least two drugs in each protected class. “We also propose that plans could use prior authorization and step therapy, so plans could ensure that patients receive the lower-cost and most appropriate option first.”

Step therapy could only be used with patients starting new drugs, and it would have to be approved by the Part D plan’s pharmacy and therapeutics committee, she added. “Some say allowing step therapy would restrict access to prescription drugs; however, Part D protects patient access as the program is embedded with strong patient protections; CMS reviews plan formularies to guard against discriminatory practices, and the agency has in place an expedited appeals process for cases in which a physician recommends an exemption to prior authorization or other forms of management,” she said. Under the proposed rule, Medicare Advantage plans could also use step therapy for Part B drugs they cover.

That appeals process would be similar to expedited appeals already taking place for other drugs covered under Medicare Advantage and Part D, she told MedPage Today. “[That is] an expedited appeals process where [appeals] would have to be adjudicated within a 24-hour period,” Verma said.

Requiring Part D plans to provide a way for doctors and patients to know, at the time a prescription is being written, how much that particular drug will cost the patient out of pocket.

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