November 27, 2018
On November 26, 2018, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would allow for changes in 2020 to coverage of protected class drugs, establish new requirements for when MA plans may apply step therapy as a utilization management tool for Part B drugs and implement electronic tools to increase drug price transparency for Medicare beneficiaries. This proposed rule is consistent with the President’s stated goal of lowering drug costs and reducing out-of-pocket costs for patients. Comments are due on January 25, 2018.
Changes to Drugs in Protected Classes
CMS is proposing changes to Part D coverage of protected class drugs. CMS believes these changes would increase the negotiating power of these plans and as a result, reduce out-of-pocket spending for beneficiaries.
Current Part D policy requires sponsors to include on their formularies all drugs in six categories or classes: (1) antidepressants; (2) antipsychotics; (3) anticonvulsants; (4) immunosuppressants for treatment of transplant rejection; (5) antiretrovirals; and (6) antineoplastics; except in limited circumstances. CMS proposes three exceptions to this requirement:
Step Therapy Requirements for MA Plans
The agency reaffirms MA plans’ existing authority to implement utilization management tools, such as step therapy, and prior authorization programs for managing Part B drugs to reduce costs for both beneficiaries and the Medicare program. CMS proposes requirements under which MA plans may apply step therapy as a utilization management tool for Part B drugs. CMS believes this will encourage access to high-value products, including biosimilars.
Price Transparency for Medicare Beneficiaries
CMS is proposing to require Part D plans to increase price transparency on a patient’s out-of-pocket cost obligations for prescription drugs when a prescription is written. This would be accomplished through the integration of an electronic real time benefit tool with the prescriber’s e-Prescribing and electronic medical record systems.
CMS indicated in the proposed rule that they are also considering for a future plan year, which may be as early as 2020, a policy that would ensure that enrollees pay the lowest cost for the prescription drugs they pick up at a pharmacy, after taking into account back-end payments from pharmacies to plans.
A blog post on the proposed rule is available here.
A fact sheet on the proposed rule is available here.
For more information visit the McDermottPlus Payment Innovation Resource Center or contact Sheila Madhani at 202-204-1459 or firstname.lastname@example.org or Mara McDermott at 202-204-1462 or email@example.com.