National Association of Chain Drugs Stores Issues Public Comment on Centers for Medicare & Medicaid Services Rule
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I. Introduction
NACDS supports efforts to curb the rising costs of prescription drugs and has supported many reforms we believe will help accomplish that goal. However, we urge CMS to be mindful that any actions it takes must be balanced with ensuring access to needed prescriptions drugs for Medicare beneficiaries. NACDS believes CMS should abandon the MFN Model due to potential negative impact on beneficiary access and health; and because benefits to beneficiaries are minimal and CMS should focus efforts on the Part D program.
II. Impact on Beneficiary Access and Health
Consistent with our support for efforts to lower prescription drug prices for seniors, NACDS supports prescription drug transparency and other significant remedial reforms, especially the reform of needless higher out-of-pocket costs for seniors caused by Medicare Part D direct and indirect remuneration (DIR) fees, discussed in greater detail below.
CMS should consider that access to prescription medication could be negatively impacted when drastic price controls are deployed, undercutting the
NACDS is also concerned about the mandatory nature of the Model. Mandatory participation in payment models runs counter to the spirit of the Innovation Center to test new and innovative approaches to healthcare delivery and the potential for new and different models of care to be expanded to the entire program. Additionally, requiring participation in the Model would increase provider burdens that could impede access to medications because of providers that would be unable to participate.
The mandatory nature of the Model, and the potential for reductions in reimbursement for Part B drugs, may well challenge pharmacies' abilities to carry and dispense all the medications they currently provide. This could result in reduced access to Part B drugs, which would impact beneficiary medication adherence and lead to increased health care costs and poorer health outcomes.
The importance of patient medication adherence is well-established. Healthcare spending on non-optimal medication therapy is estimated at
Also, the lack of medication adherence causes approximately 125,000 deaths, at least 10% of hospitalizations, and hundreds of billions of preventable healthcare spending./3
For Medicare beneficiaries in the Part D program, it was recently estimated that medication nonadherence for diabetes, heart failure, hyperlipidemia, and hypertension resulted in billions of Medicare fee-for-service expenditures, millions in hospital days, and thousands of emergency department visits that could have been avoided. If 25% of beneficiaries with hypertension who were nonadherent became adherent, Medicare could save
Should CMS continue to move forward with the MFN Model, to keep overall Model costs to a minimum, we encourage the Agency to review pharmacy dispensing fees and to adjust them to reflect the true cost of dispensing prescription medications to Medicare patients.
III. Misplaced Focus on Part B Drugs
In addition to concerns about the possible negative impact on beneficiary access and health, NACDS believes CMS would create more savings for the government and for beneficiaries by focusing on reform in the Part D program instead of the Part B program. One of CMS' goals of the MFN Model is to save beneficiary cost sharing for Part B drugs. However, many beneficiaries with only Medicare Part B already have some form of supplemental or "Medigap" coverage that covers Part B drug costs. Because so many beneficiaries are already covered by supplemental insurance, the MFN Model will not impact their costs and achieve the savings desired for beneficiaries.
Instead, CMS should focus its efforts on making reforms in the Part D program. As CMS has recognized in the past, the increasing use of direct and indirect remuneration (DIR) fees in the Part D program has led to an increase in beneficiary cost-sharing, an increase in subsidy payments made by Medicare, and an overall decrease in plan liability for total drug costs, despite growth of Part D drug costs in recent years.
Access to affordable medications and pharmacy services is critical, and even more so during the ongoing pandemic and public health emergency. However, that access has been increasingly undermined by DIR fees in Medicare Part D. Pharmacy DIR fees are the result of a loophole in Medicare regulations. Under this loophole, health plans and pharmacy benefit managers (PBMs) - take back money paid to pharmacies, which can occur weeks or months after a pharmacy had already been paid.
Pharmacy DIR fees contribute to increased beneficiary cost-sharing and medication nonadherence. The amount that Medicare patients pay for a prescription drug is supposed to be based on the cost of the drug. However, health plans and PBMs often calculate patients' drug costs without subtracting the dollars that are taken back from pharmacies. This inflates patients' drug costs because the calculation is based on a figure that is higher than what the plans actually pay. Higher patient drug costs discourage them from adhering to their medication regimens. Thus, NACDS continues to advocate that pharmacy DIR fees should be assessed at the point of sale, and not retroactively after a patient has left the pharmacy counter. CMS has recognized that "when [pharmacy DIR fees] are not reflected in the price of a drug at the point of sale, [patients] do not benefit through a reduction in the amount they must pay in cost-sharing, and thus, end up paying a larger share of the actual cost of a drug."/5
According to CMS, reforming pharmacy DIR fees will save patients
In addition to the retroactive nature of these fees, plans and PBMs claw back monies from pharmacies because they claim they are due to a pharmacy's performance on "so-called quality measures." However, these measures are unpredictable, inconsistent, and often outside of a pharmacy's control. Thus, these measures are fundamentally unfair because the goals of the measures are opaque and constantly shifting, making it extremely difficult for a pharmacy to maintain a sustainable business model. Indeed, pharmacy DIR fees are increasingly contributing to pharmacies closing their doors because it is difficult for pharmacies to plan for the large retroactive bills they may receive.
Pharmacy DIR reform under Medicare Part D will help bring much needed clarity to the true price Medicare pays for a Part D drug and provide financial relief to beneficiaries, many of whom struggle to afford their medications. If finalized, pharmacy DIR reform can help preserve beneficiary access to community pharmacies and lower out-of-pocket costs - both of which can improve prescription drug adherence and health outcomes.
These changes are consistent with the goal to reduce drug costs and would produce real and substantial savings for beneficiaries in the Part D program. CMS should focus on creating savings in the Part D program as opposed to the MFN Model which will likely produce minimal savings for beneficiaries.
IV. Conclusion
NACDS has serious concerns with the MFN Model and urges CMS to revoke the interim final rule. Instead, CMS should focus on other changes it could make to the Medicare program to achieve beneficiary savings while helping to preserve access to medications.
If we can provide further assistance, please do not hesitate to contact
Sincerely,
President and Chief Executive Officer
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Footnotes:
1/ Watanabe JH, McInnis T, Hirsch JD; "Cost of Prescription- Drug Related Morbidity and Mortality;" Annals of Pharmacotherapy;
2/ Rosenbaum L, Shrank WH; "Taking Our Medicine - Improving Adherence in the Accountability Era;"
3/ Viswanathan M, Golin CE, et al.; "Interventions to Improve Adherence to Self-Administered Medications for Chronic Diseases in
4/ Lloyd, Jennifer T., Maresh, Sha, Powers, Christopher, Shrank, WH, Alley, Dawn E; "How Much Does Medication Nonadherence Cost the Medicare Fee-for-Service Program?"; Medical Care;
5/ 83 Fed. Reg. 231, 62174 (published
6/ 83 Fed. Reg. 231, 62154 (published
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The rule can be viewed at: https://www.regulations.gov/document?D=CMS-2018-0132-2750
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