Administration Proposes Using CMMI to Test Drug Pricing Reform Plan

On October 25, 2018, President Trump addressed a campaign promise ahead of the heavily contested mid-term elections regarding his administration’s continued drug pricing reform efforts. Healthcare leadership under the Trump administration unveiled a three-prong plan using the Center for Medicare and Medicaid Innovation (CMMI) to test three ways to lower the costs of drugs, aimed largely at Medicare Part B.

Top-line takeaways include:

• As a part of an “International Pricing Index” payment model the Centers for Medicare & Medicaid Services (CMS) proposes to curtail drug prices by benchmarking against 16 other nations. The proposal states that drug prices would be lowered over the next five years to a comparable international level.
  • For more information, please utilize the CMS fact sheet for the proposal on this payment model as well as review of the entire Advance Notice of Proposed Rule Making (ANPRM) here.
  • Comments will be accepted through the CMS e-regulation portal through December 24, 2018.
• The proposal also seeks to infuse negotiation tactics into Medicare Part B through a series of limited-scale mandatory demos for physicians and hospitals. The Obama Administration attempted to test alternative payment structures for physician-administered drugs through a Medicare Part B demonstration; however, this proposal never came to fruition due to significant advocacy from groups like ACCC.
• Changes to incentives were also outlined in President Trump’s speech today with healthcare leadership attempting to circumvent Medicare Part B’s “buy-and-bill system” and Average Sales Price (ASP) methodology. Under this proposal, Medicare Part B reimbursement could potentially move to a flat fee instead of a percentage.

Earlier this morning, the Department of Health & Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE), released a report couching Medicare Part B reform as an effort to curtail “global free-loading” in the amount that the United States pays for drugs. While marketed as an international issue, the proposal unveiled today deals strictly in the domestic market.

The ASPE report advocates for the reform of Medicare Part B to align more with the negotiation and utilization management tactics currently employed in Medicare Part D. Due to the administration’s recent efforts to infuse Medicare Part D program components into Medicare Part B with the use of step therapy for Part B drugs under Medicare Advantage (MA) plans, ACCC is concerned about the impact this proposal could have on oncology patients across the country.

Despite the summer slowdown in drug pricing reform, the Trump Administration has taken a series of quick actions over the last two months to advance their reform efforts. On October 15, the administration announced work on legislation that will make pharmaceutical companies disclose list prices in their TV advertisements. The White House Budget Office is also reviewing two rules for potential overhaul – of Medicare Part B – these rules are expected to be released before the end of the year.

ACCC continues to follow these policy proposals closely and examine their impact on the oncology community and the care that you provide to patients across the country. Stay tuned for more updates.