prescription-drug
  • Prescription Drug
  • Issue Primers

Trump Administration Drug Pricing Blueprint Policies and Proposals Tracker

March 08, 2019

McDermott+Consulting

This matrix tracks the Trump Administration’s Blueprint for lowering the cost of prescription drugs.

Increase Competition

Better Negotiation

Lowering List Prices

Reduce Out of Pocket Spending

Increase Competition

Issue

Blueprint Recommendations

Action Steps

Milestones

Increase Competition

Encourage the development of more generic prescription drugs to help lower overall costs. FDA will issue guidance to address how manufacturers may seek to use shared system REMS to delay or block competition from generic products entering the market.

HHS solicited comments on how REMS programs could be modified to prevent restrictions on drug distribution that may be affecting the development of generic drugs.
  • Released 5/16/18
  • Comments due 7/16/18
S.3792 would prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market and biological product manufacturers from compensating biosimilar and interchangeable companies to delay the entry of biosimilar biological products and interchangeable biological products.
  • Introduced 12/19/2018
  • Referred to Judiciary Cmte. 12/19/18
  • Needs to be reintroduced

Promote innovation and competition for biologics. FDA will issue policies to improve availability, competitiveness and adoption of biosimilars as affordable alternatives to branded biologics. FDA will continue to educate clinicians, patients and payers about biosimilar and interchangeable products, seeking to increase awareness about these important new treatments.

HHS solicited comments on how the FDA could improve provider education regarding the use of biosimilars and whether policy changes could improve the interchangeability of biosimilars.
  • Released 5/16/18
  • Comments due 7/16/18
FDA recently unveiled an 11-part action plan to encourage innovation and competition among biologics and the development of biosimilars.
  • Released July 2018
Better Negotiation

Issue

Blueprint Recommendations

Action Steps

Milestones

Better Negotiation

Direct CMS to develop demonstration projects to test innovative ways to encourage value-based care and lower drug prices. These models should hold manufacturers accountable for outcomes, align with CMS priorities of value over volume and site-neutral payments, and provide Medicare providers, payers and states with additional tools to manage spending for high-cost therapies.

CMS proposed its “International Pricing Index” demonstration model which, if finalized would test the feasibility of reducing Medicare payment rates for certain drugs to levels approximating those paid in international markets.
  • Released 10/30/18
  • Comments due 12/31/18
  • Proposed rulemaking ~Q1 2019

Allow Part D plans to adjust formulary or benefit design during the benefit year if necessary to address a price increase for a sole source generic drug. Presently, Part D plans do not contract with generic drug manufacturers for the purchase of generic drugs, and generally are not permitted to change their formulary or benefit design without CMS approval in response to a price increase. This change could ensure Part D plans can respond to a price increase by the only manufacturer of a generic drug.

CMS instructed Part D sponsors that, beginning January 1, 2019, plans may apply step therapy to control the utilization of services in a manner that does not create an undue access barrier for beneficiaries. This may include the use of a Part D covered drug before a Part B covered drug.
  • Released 8/7/18
  • Effective 1/1/19

Allow Part D plans to better manage overall spending particularly on certain categories of high-cost drugs. Presently, Part D plans are unable to negotiate lower prices for high-cost drugs without competition. This change could allow Part D plans to use utilization management tools like those used by private payers to negotiate more favorable pricing for these drugs.

CMS proposed three exceptions to this protected class policy that would allow Part D sponsors to: (1) implement broader use of prior authorization and step therapy for protected class drugs, including to determine use for protected class indications; (2) exclude a protected class drug from a formulary if the drug represents only a new formulation of an existing single-source drug or biological product, regardless of whether the older formulation remains on the market; and (3) exclude a protected class drug from a formulary if the price of the drug increased beyond a certain threshold over a specified look-back period.
  • Released 11/30/18
  • Comments due 1/25/18
CMS is considering future regulatory changes that would change the definition of “negotiated price” to mean the lowest amount that a pharmacy could receive from the plan. This amount would be net of all adjustments, contingent payments to the pharmacy and incentive fees.
  • Released 11/30/18
  • Comments due 1/25/18
  • Requires future regulatory action
CMS is considering defining “price concession” to include all forms of discounts, subsidies and rebates.
  • Released 11/30/18
  • Comments due 1/25/18
  • Requires future regulatory action
CMS announced plans for a new new Part D payment modernization model taking effect for the 2020 plan year. This voluntary, 5-year program will require selected participating Part D plans to take on greater risk for spending in the catastrophic phase of Part D in return for additional flexibility, including rewards and incentives designed to lower the cost of Part D drugs. The model intends to create incentives for Part D plans, patients and providers to choose drugs with lower list prices.
  • Request for Applications release 1/18/19
  • To be effective 1/1/20

Allow Medicare to pay different prices for different uses of the same drug. Presently, Part D plans must cover and pay the same price for a drug regardless of the indication for which it was prescribed. This change could permit Part D plans to choose to cover or pay a different price for a drug, based on the indication.

HHS solicited comments on ways to apply lessons learned from commercial insurers to an indications-based payment system under Medicare and Medicaid.
  • Released 5/16/18
  • Comments due 7/16/18
CMS instructed Part D sponsors that, beginning in 2020, plans may negotiate formulary coverage based on specific indications and may include only certain indications on-formulary.
  • Released 8/29/18
  • Effective 1/1/20

Send the President a report identifying particular drugs or classes of drugs in Part B where there are savings to be gained by moving them to Part D.

Take steps to leverage the authority created by the Competitive Acquisition Program (CAP) for Part B Drugs & Biologicals.

CMS solicited feedback from stakeholders in the CY 2019 OPPS proposed rule on how a CAP could be structured in such a way as to increase competition, strengthen negotiation and create incentives for lower list prices.
  • Released 7/31/18
  • Comments due 9/24/18
  • Would require future rulemaking

Address the disparity between the drug prices in America and other developed countries.

H.R. 6958 would have required CMS to report on the feasibility of basing payment rates for prescription drugs under Medicare and Medicare Advantage on the average price of such drugs in countries that are members of the Organization for Economic Cooperation and Development (an intergovernmental organization focused on global economic development).
  • Introduced 9/27/18
  • Referred to E&C and W&M
  • Needs to be reintroduced
CMS proposed its “International Pricing Index” demonstration model which would test the feasibility of reducing Medicare payment rates for certain drugs to levels approximating those paid in international markets.
  • Released 10/30/18
  • Comments due 12/31/18
  • Proposed rulemaking ~Q1 2019
Lowering List Prices

Issue

Blueprint Recommendations

Action Steps

Milestones

Lowering List Prices

Call on the FDA to evaluate the inclusion of list prices in direct-to-consumer advertising.

FDA has formed a working group to determine if it has the authority to require list prices of drugs to be included in consumer advertising.

Direct CMS to make Medicare and Medicaid prices more transparent, hold drug makers accountable for their price increases, highlight drugs that have not taken price increases, and recognize when competition is working with an updated drug pricing dashboard. This tool will also provide patients, families, and caregivers with additional information to make informed decisions and predict their cost sharing.

CMS has released several information products that provide greater transparency on spending for drugs in the Medicare and Medicaid programs. The dashboards focus on average spending per dosage unit and change in average spending per dosage unit over time. The tools also include additional manufacturer-level drug spending information as well as consumer-friendly descriptions of the drug uses and clinical indications.
CMS proposed to require direct-to-consumer television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost of that drug or biological product.
  • Released 10/18/18
  • Comments due 12/17/2018
S.3680 would have required CMS to establish reference prices for all Medicare covered drugs and prohibit Medicare payment rates from exceeding those reference prices.
  • Introduced 11/29/18
  • Referred to HELP Cmte 11/29/18
  • Needs to be reintroduced
S.3702 / H.R. 7217 would have required drug manufacturers with Medicaid rebate agreements for covered outpatient drugs to disclose drug product information. Manufacturers are subject to civil penalties for knowingly misclassifying drugs.
  • Referred to Finance Cmte on 12/4/18
  • Needs to be reintroduced
H.Con.Res 146 expressed the sense of Congress that HHS has the authority to require direct-to-consumer television advertisements of prescription drugs and biological products to include the Wholesale Acquisition Cost of that drug or biological product under sections 1102 and 1871 of the Social Security Act; and that the proposed rule by HHS, through CMS, published in the Federal Register on October 18, 2018, shall be codified without change when finalized.
  • Introduced 12/20/18
  • Referred to House E&C and W&M 12/20/18
  • Needs to be reintroduced
HHS proposed a rule that would eliminate safe harbor protections for certain rebates and discounts under Part D while providing new safe harbor protections for certain reductions made at the point-of-sale as well as for PBM service fees. HHS believes these changes will
  • Released 2/6/19
  • Comments due 4/8/19

Develop proposals related to the ACA’s Maximum Rebate Amount provision, which limits manufacturer rebates on brand and generic drugs in the Medicaid program to 100 percent of the Average Manufacturer Price.

Reduce Patient Out-of-Pocket Spending

Issue

Blueprint Recommendations

Action Steps

Milestones

Reduce Patient Out-of-Pocket Spending

End pharmacy gag clauses. Prohibit Part D plan contracts from preventing pharmacists from telling patients when they could pay less out-of-pocket by not using their insurance.

Congress enacted the “Know the Lowest Price Act of 2018” (P.L. 115-262) prohibiting Part D sponsors from including contractual restrictions on pharmacists that would prevent the discussion of cash purchase prices beginning January 1, 2020.
  • Enacted 10/10/18
  • Effective 1/1/20
CMS proposes to amend their regulations to implement P.L. 115-262.
  • Released 11/30/18
  • Comments due 1/25/18

Require Part D Plan sponsors to provide additional information about drug price increases and lower-cost alternatives in the Explanation of Benefits they currently provide their members.

CMS proposed to require the inclusion of negotiated drug pricing information and lower cost alternatives in the Part D Explanation of Benefits.
  • Released 11/30/18
  • Comments due 1/25/18
Previous Post / Next Post
beakernav X1E2BFA62-BFCE-43C1-B777-27E3E5216018medical bagoriginal analysis +external linkpdf downloadstethoscope