Alliance Submits Comments on Drug Pricing Blueprint
Find a full copy of the comments here (https://www.agingresearch.org/app/uploads/2018/08/AAR-Drug-Pricing-Blueprint-Comments-002.pdf).
VIA ELECTRONIC SUBMISSION THROUGH www.regulations.gov
To:
Secretary
Re: Request for Information on the
Dear Secretary Azar,
Introduction
Medicare Part D provides vital access to prescription drugs for more than 43 million older adults and people with disabilities (1). When Part D beneficiaries take their medicines as prescribed, there is increasing evidence that their health outcomes are improved. Overall, surveys show that Part D beneficiaries are satisfied with the program (2). Yet there still are beneficiaries who experience challenges with it.
Despite premiums recently remaining stable, the cost-sharing requirements for drugs covered by plans have increased over time (3). Because it has no annual cap on out-of-pocket spending, Part D coverage "does not fully protect beneficiaries from high drug costs...Enrollees who do not receive low-income subsidies are required to pay 5 percent of total drug costs above the catastrophic threshold. (4)"
In 2016, one-half of all adults age 65 and older had less than
The Alliance understands the proposals in the Blueprint are exploratory and lack sufficient detail to analyze them as in the regulatory process. Therefore, we urge HHS to utilize the formal rulemaking process as it explores options to lower drug prices and reduce OOP costs.
Our comments focus on four themes: beneficiary access, beneficiary coverage, and transparency and communication, and innovation. Although we are aware that the Blueprint recommends an "All or None" 5-Part Plan for Part D, we have addressed these points separately because we realize the difficulty in implementing all points simultaneously.
Sharing Rebates at Point of Sale with Part D Enrollees
The Alliance applauds the Administration's move to require Part D plans share a portion of rebates at the point of sale to permit Medicare enrollees to benefit directly from the discounts and rebates provided by manufacturers. A
However, we remain concerned that the Administration states that this would "allow beneficiaries to share directly in the savings from discounts." This could lead to raising premiums for everyone by increasing plan costs.
Changing Calculation of "TrOOP"
A 2016
Currently, the required 50 percent manufacturers discount in 2018 will increase in 2019 to 70 percent on the price of brand-named drugs filled by beneficiaries in the coverage gap. Although considerable savings have been generated for Part D beneficiaries who get to the coverage gap, this policy change also helps speed more enrollees through the coverage gap. (9) Although the number of low-income subsidy (LIS) beneficiaries who reached catastrophic coverage between 2007 and 2008 was comparatively steady, it has increased each year since then from .5 million in 2012 to 1 million in 2015. (10)
If the value of the manufacturer discount was excluded from calculating TrOOP, Part D beneficiaries who reach the coverage gap would face higher OOP costs in that phase and would travel through the coverage gap more slowly, meaning fewer enrollees would reach the catastrophic coverage gap. Higher OOP costs could lead to fewer beneficiaries getting and/or taking their prescription therapies. Although this could lead to lower utilization and possibly lower premiums, this likely would not lead to improved health for patients. For these reasons, the Alliance opposes excluding manufacturer coverage gap discounts from TrOOP costs.
Adding an Out-of-Pocket Limit to Part D
The Medicare Part D benefit is multifaceted and levies high OOP costs on enrollees, through deductibles and copayments. With numerous specialty tiers, subject to coinsurance and excluded from cost sharing exceptions, beneficiaries pay a significant amount of their medication costs. Many older adults, who have comorbidities, may need to pay for multiple drugs. For prescription therapies covered by the specialty tiers, beneficiaries pay between 25 to 33 percent, pocketing thousands of dollars in OOP costs for drugs and biologics to treat numerous chronic, disabling, serious or life-threatening diseases, such as Alzheimer's, heart disease, cancer, diabetes, arthritis, and other conditions.
Patients who can afford their prescribed medications often pay high OOP costs to stay healthy. A study published in 2017 cited the following average annual cumulative OOP costs for Medicare beneficiaries (11):
* Rheumatoid arthritis:
* Multiple sclerosis:
* Chronic myeloid leukemia:
Adding an OOP cap would reduce OOP costs for Part D beneficiaries who get to the catastrophic coverage phase of the benefit. Although an estimated 30 percent of Medicare enrollees receive a Part D LIS, too many seniors are hit with unaffordable OOP drug costs (12). According to
Narrowing Part D Formulary Standards
Part D Medicare plans currently are required to cover at least two drugs in each therapeutic class - that is, a group of drugs used to treat the same disease or condition - and to cover all or substantially all drugs in six "protected" classes. The protected therapeutic classes include anti-retrovirals, immunosuppressants, antidepressants, antipsychotics, anticonvulsant agents, and anti-neoplastics. Among the diseases and conditions these drugs treat are HIV-AIDS, organ rejection, epilepsy, cancer and mental illnesses. (14) Because many older adults have multiple diseases with myriad sequelae, these drugs are often in older individuals. Twenty-five percent of cancer patients have clinical depression. (15) A large number of older patients have complicated medical needs and significant comorbidities, so they may need to try a variety of nuanced therapies before they find treatments that are appropriate and effective.
An
The Administration has said this proposal would allow Medicare Part D plans (PDPs) to "better manage" the drug benefit. Eliminating the protected class designation could allow PDPs to obtain savings through leverage in price negotiations, and thus could lower Medicare and plan costs, and possibly lower premiums. However, according to a 2018
The Alliance strongly supports the existing policy that requires Medicare Part D plan sponsors to cover two drugs in each drug class, including the six protected classes and strongly opposes allowing plans to cover only one drug per category and class. If Part D formulary standards were narrowed, beneficiaries could have more restrictive plan formularies. They would face increased burdens in obtaining some prescribed medications, and they could have more difficulty in finding plans to cover their needed pharmaceutical therapies. In addition, beneficiaries and Medicare could face additional costs from avoidable physician visits, hospitalizations and other interventions that would have been unnecessary had there been increased access to prescription drugs.
Eliminating cost sharing for generics for low-income enrollees
Beneficiary access to prescription therapies and care is often derailed by copayments and coinsurance. For low-income enrollees, relatively small copayments can mean the difference between purchasing a prescription and leaving it at the pharmacy counter, or splitting pills, or skipping doses. By permitting generics to be available without any OOP cost, the Administration helps low-income beneficiaries have access to therapies they need to adhere to prescribed treatments. Therefore, the Alliance strongly supports eliminating cost-sharing for generics for low-income beneficiaries and appreciates the agency's leadership on this topic. When no generic products are available, which is often the case for certain serious illnesses, the Alliance encourages HHS to look for ways to lower or waive copays for brand products.
Establishing differential copays for off-label indications
Medicare has long-standing policy of providing coverage and payment for off-label therapies, so long as certain criteria are met. This policy, from its inception, has enjoyed broad support among a bipartisan group of members of
Very often prescriptions used off-label are to treat cancer, autoimmune conditions, and neurodegenerative conditions, such as Multiple Sclerosis. New research unambiguously shows that cost-sharing prevents Medicare Part D beneficiaries from initiating and adhering to a new, life-saving cancer treatment. Congressional intent in creating the off-label policy was to facilitate and ensure beneficiary access to needed treatments and as part of that intent, envisioned that the policy would level the playing field for beneficiaries needing off-label prescriptions. As such, efforts to increase OOP spending associated with off-label usage would discriminate against beneficiaries with certain diseases and conditions, impede patient access to much-needed treatment, and run counter to Congressional intent and long-standing Medicare payment policy. The Alliance would have serious concerns about the barriers this change could present to older patients who need life-saving and life-sustaining care.
Prohibiting "Pharmacy Gag-Clauses" in Part D
Patients have a right to accurate information regarding their health care choices. The Alliance supports the Administration's efforts to prohibit Part D plans from preventing pharmacists from informing patients of lower cost options available to them in "gag clauses" of a plan-pharmacy benefit manager contract. For example, for certain medicines, patients may save money if they pay out-of-pocket outside of their plan or use (often less expensive) generic alternatives. Health insurance is intended to help patients access health care by making it more affordable, including the medicines they need, and "gag clauses" do the contrary by withholding information about for patients.
However, one potential unintended consequence is that patients may choose lower-cost options outside of their plan and end up paying more in the long run as they stop making out-of-pocket payments that count to their total out-of-pocket costs (TrOOP). We fully support the Administration's effort to end gag clauses but encourage greater pharmacist education to ensure that they are aware of this unintended consequence.
Providing Improved Transparency and Communication/Non-Medical Switching
The Alliance believes that providing more information in an easy-to-understand format is helpful for Medicare beneficiaries. The Alliance supports the Administration's proposal to update the Medicare and Medicaid drug-pricing dashboards to make prices increases more transparent, including highlighting products that have not taken price increases.
We would also like to address an issue with the complexity of language used in the dashboard as it currently stands. The level of language used by this decision tool in its introduction surpasses the health literacy of the average American. If information were provided in a more "user-friendly" format, it would make information provided more useable to patients.
We would encourage HHS to call for strategies to improve beneficiary medication adherence. The Alliance has been active on the specific issue related to "non-medical switching" of oral anticoagulants. Non-medical switching refers to a formulary decision-making process designed by Part D drug plans to limit prescription coverage to less expensive medications (also called formulary-driven switching). The change in medication is determined by the plan formulary without any consideration of the medical repercussions or a physician's knowledge and reasoning behind the selection of the original prescription medication. We encourage HHS to explore the scale and impact of the medical consequences of switching and whether there should be a mechanism in place for providers to be notified before a change is made at the pharmacy counter.
Smoothing Out OOP Expenses/Fixing the "Seasonality" of Triggering Catastrophic Coverage
There are numerous Medicare Part D beneficiaries who are prescribed different medicines for multiple diseases. If someone has an income that is 400 percent of the Federal Poverty Level, they are ineligible for LIS. So, this hypothetical person has high coinsurance requirements, up to 33 percent, for relatively new classes of prescription drugs. If they should be prescribed and need such a medicine for only one of his illnesses, they likely could not afford it. Furthermore, under Part D, the coinsurance requirements for expensive specialty medicines decrease across the year, with the highest costs earlier in the year. Therefore, this person could pay 40 percent coinsurance at the beginning of the year, but when they enter the Catastrophic Coverage Phase, they only would pay 5 percent coinsurance. (18)
The seasonality of OOP expenses and hitting the annual OOP cap is not only a concern for patients on Medicare, but also for individuals with commercial insurance. Thus, we urge the
REMS Abuse
The Alliance believes that for medicines with known or potential risks, the appropriate use of Risk Evaluation and Mitigation Strategies (REMS) is an important tool to ensure patient safety. However, the Alliance shares HHS' view that misapplication of REMS (or other distribution restrictions) often prevents generic and biosimilar product developers from buying enough of the brand product to conduct the comparison studies required for FDA approval of a generic or biosimilar. Additionally, in cases in which FDA requires that a brand and generic share a single REMS, extended negotiations may delay generic product entry into the market.
The Alliance supports the efforts to prevent REMS (or non-REMS based limited distribution schemes) from being a barrier to the development and market entry of lower-cost generic and biosimilar products. We encourage any effort in this regard to fully protect patient safety and look forward to the opportunity to work with
Biosimilars
The Alliance is supportive of policies that can improve competition in the biosimilars market by promoting innovation and competitiveness of biologic products. According to a RAND Study, specialty drugs are administered in 1 to 2 percent of the
Shift from Part B to Part D
The Alliance shares the concerns of the
We agree with AVAC's recommendation for CMS to support billing systems that enables providers to review a patient's Part D vaccine coverage and to directly bill Part D plans for the cost and administration of covered vaccines. We would also request that CMS commission on a study on the impact this system would have on vaccination rates and its cost-effectiveness to the Medicare program.
Conclusion
The Alliance appreciates the opportunity to provide comments on the
Sincerely,
President and CEO
Vice President of Public Policy
Footnotes:
1. Cubanski J. What's in the Administration's 5-Part Plan for Medicare Part D and What Would It Mean for Beneficiaries and Program Savings?
2. Nearly 9 in 10 Seniors Are Satisfied with Part D. http://medicaretoday.org/resources/senior-satisfaction-survey/. Published 2017. Accessed
3. Cubanski J. What's in the Administration's 5-Part Plan for Medicare Part D and What Would It Mean for Beneficiaries and Program Savings?
4. Ibid
5. Income of Today's Older Adults. Pension Rights Center. www.pensionrights.org/publications/statistic/income-today's-older-adults Accessed
6. Barnhart J and Gomberg J of
7. Assessing the Impact of MedPAC's Proposed Part D Reforms to Modify Beneficiary Cost Sharing. Avalere; 2016. http://avalere.com/expertise/life-sciences/insights/avalere-analysis-on-medpacs-proposed-part-d-reforms-to-modify-beneficiary-c. Accessed
8. Ibid
9. Cubanski J. What's in the Administration's 5-Part Plan for Medicare Part D and What Would It Mean for Beneficiaries and Program Savings?
10. Ibid
11.
12. The Medicare Part D Prescription Benefit.
13. Cubanski J. What's in the Administration's 5-Part Plan for Medicare Part D and What would It Mean for Beneficiaries and Program Savings?
14. Policy Proposal: Revising Medicare's Protected Classes Policy.
15.
16. Ibid.
17. Policy Proposal: Revising Medicare's Protected Classes Policy.
18.
19. Mulcahy, Andrew W.,
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