Pharmaceutical Care Management Association Issues Public Comment on Centers for Medicare & Medicaid Services Rule

WASHINGTON, Feb. 2 -- Tim Dube, vice president for regulatory affairs at the Pharmaceutical Care Management Association, has issued a public comment on the Centers for Medicare and Medicaid Services rule entitled "Most Favored Nation Model". The comment was written on Jan. 26, 2021, and posted on Feb. 1, 2021:

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On November 27, 2020, the U.S. Department of Health and Human Services (HHS) published an interim final rule (IFR) entitled "Most Favored Nation (MFN) Model" in the Federal Register, setting a comment period to end on January 26, 2021. This IFR follows an earlier Advanced Notice of Proposed Rulemaking (ANPRM) for an "International Pricing Index Model for Medicare Part B drugs." The MFN model offered under the authority of the Center for Medicare & Medicaid Innovation (CMMI) seeks to address costs for prescription drugs by moderating payment for the top 50 list by spending for Medicare Part B drugs and biologicals (including biosimilars).

The Pharmaceutical Care Management Association (PCMA) is the national association representing America's pharmacy benefit managers (PBMs), which administer prescription drug plans and operate specialty pharmacies for more than 266 million Americans with health coverage through Fortune 500 companies, health insurers, labor unions, Medicare, Medicaid, the Federal Employees Health Benefits Program, and through the exchanges established by the Affordable Care Act. Our members work closely with plans and issuers to secure lower costs for prescription drugs and achieve better health outcomes.

PCMA looks forward to working with and supporting the new Administration's commitment to lowering the cost of prescription drugs for all Medicare beneficiaries. However, we caution against proposals that increase burdens on patients, providers, and plan sponsors. We offer in this letter comments on three main areas.

* First, patient access to and choice of drugs may be impacted by prescribing pattern shifts as providers respond to new incentives.

* Second, mandatory model participation without first subjecting a demonstration model to a robust evaluation disregards demonstration project fundamentals and CMMI's statutory intent.

* Finally, PCMA is concerned that the model will not achieve the stated goal of controlling the growth in Medicare Part B spending without adversely affecting quality of care for all Medicare beneficiaries, especially those enrolled in Medicare Advantage (MA) plans.

I. Patient Access and Medicare benefit switches

PCMA is concerned that patient access to drugs and devices may become unnecessarily convoluted. Physicians will adjust prescribing patterns and behaviors in response to the rule.

The severity of reimbursement rate reductions may affect a physician's ability to acquire Part B drugs subject to the rule at low enough prices. In this case, physicians may switch their patients to drugs covered under Part D, prescribe a lower cost Part B drug not subject to the reduced reimbursement amounts, or prescribe the Part B drug in such a way that the beneficiary's Part D plan may cover it. Any of these outcomes will confuse patients and reduce their autonomy in treatment choice. In some instances where provider costs exceed MFN based reimbursement rates, providers may prescribe fewer MFN drugs and inadvertently undermine beneficiary health outcomes. Similarly, manufacturers will attempt to recoup MFN-related revenue losses by increasing cost of non-Part B drugs including private market prescription drugs, while increasing burdens for providers, patients, and plan sponsors.

Separately, from provider behavioral changes, the model may distort the Medicare market causing more beneficiaries to switch from MA to Fee-For-Service (FFS). Centers for Medicare & Medicaid Services (CMS) declined to allow MA plans to access these prices but is reducing the payment benchmarks to account for the lower cost of Part B drugs. As beneficiaries gain a better understanding of drug costs in this bifurcated system, enrollment by individuals who use Part B drugs could shift away from MA, creating an unlevel playing field and distorting the risk profile of the programs. In net, more patients may be subject to the model than CMS estimates, while hamstringing MA plans that are otherwise successfully managing treatments with these drugs.

II. Model related considerations

We believe that CMS skipped an important step in its rulemaking by moving straight from 2018's ANPRM to this IFR. While many stakeholders had concerns over the ANPRM, this rule no longer resembles what Medicare providers, beneficiaries, and other stakeholders could have anticipated. A second round of formal notice-and-comment rulemaking could have yielded a more workable solution. This procedural flaw is the reason the rule is now in legal limbo.

More specifically, the IFR does not mention, recognize, nor build on readily available options and opportunities such as the Competitive Acquisition Program (CAP) as defined by the Social Security Act, section 1847B. Neither does the IFR reference the use of PBM tools, including formularies, tiering systems, prior authorization, or other clinical utilization management techniques as a means of controlling high cost without affecting care delivery. While the original proposal included voluntary participants and geographical 'regions' to allow for model evaluation and evolution, the IFR presents a national and mandatory model without any test or control groups. Therefore, data on cost savings will be reported without a comparator and prevent comparative cost savings analysis as required by the statute. Consequently, it will be very difficult to evaluate and quantify the impact on issues such as Part B savings, access to treatment, program costs, and quality of care without a control group.

Given the lack of any control groups, PCMA would like for CMS to define data elements, comparators, and data collection and evaluation methodologies for the IFR. Moreover, PCMA recommends that CMS be transparent as to how the Model will be evaluated in order to facilitate successful implementation and increase transparency of processes and lower provider burden.

Beyond methodological issues related to demonstration design and rollout, PCMA suggests that CMS investigate alternative models that are based on quality and value and focus on treatment outcomes versus cost of treatments. One such alternative that CMS should consider is the Institute for Clinical and Economic Review (ICER) model for value-based price benchmarks which considers a treatment's potential success and the subsequent lifetime health gains when comparing to other less costly therapies. Similarly, CMS has yet to propose a model allowing for combined management of Part B and D drugs in the same therapeutic class, despite requesting comments on this approach in 2017. Such a model would allow CMS to address cost of care from a patient-focused outcomes lens versus cost only.

In addition to PBM tools, competition within drug classes will also help lower drug costs. In earlier regulations for the CAP program, CMS required a selected vendor to offer at least one drug per HCPCS code. As a result, a CAP vendor's ability to drive down prices through competition among potentially substitutable drugs is significantly limited given the large number of HCPCS codes, relative to the more limited range of recognized categories and classes such as those promulgated by the U.S. Pharmacopeia (USP). Therefore, as one solution, PCMA suggests the use of USP drug classes for making coverage decisions within the Model. An alternative, though partial, solution would be to combine drugs (particularly biosimilars with the reference product) within HCPCS codes, though this would not address single source competition.

III. Negative Impact on MA-Part D Beneficiaries

While shifting of prescriptions from Part B to Part D is anticipated in the IFR, it would have a specific negative effect on enrollees in MA-PD plans. In the rule, CMS estimates that the demonstration will result in cuts of approximately $64.4 billion in FFS benefits, and $49.6 billion in MA payments. Based on these estimates, PCMA is concerned that the large payment cuts would lead to unforeseen consequences for beneficiaries, providers, plan sponsors, and the Medicare program at large.

The reduction in MA payments based upon the eventual incorporation of historical FFS claims in calculating payments to MA organizations, is consistent with the treatment of payments made under other CMMI models and the Medicare Shared Savings Program. If this rule moves forward, we instead encourage CMS to exclude the impact of the Model when determining FFS costs for payments to MA plans, who would not be responsible for nor privy to the MFN savings.

Therefore, MA benchmarks should be adjusted upward to account for the impact of those savings. Moreover, there is precedence for excluding FFS benefits from the MA benchmark when MA is not responsible for the benefit such as the hospice and kidney acquisition cost carve-out.

Based on CMS' own modeling, the demonstration would lead to significant cuts in the MA benchmark, negatively impacting beneficiaries' access to quality care through fewer plan choices, fewer benefits, and higher out-of-pocket costs. Also, lower payments from significant cuts would artificially degrade the value of benefits for MA-PD beneficiaries as fewer dollars would be available for additional supplemental benefits or Part D premium offsets. Any contraction of supplemental benefits may lead to the disenrollment of beneficiaries out of MA plans and hinder the effectiveness of MA-PDs in controlling costs and managing care.

Conclusion

As presented in the sections above, the complexity of this rule will create unnecessary burdens for patients, providers, and plan sponsors. It is critical that CMS consider and address the impact of these burdens.

PCMA recommends that CMS use its authority to test the use of traditional PBM tools (either directly, or indirectly through a third-party arrangement such as an insurance carrier) to negotiate drug prices, best rates, and rebates for providers and patients. This flexibility will grant significantly greater leverage to lower drug costs, in support of the goals of the demonstration while benefiting providers, patients, and plan sponsors within the Part B program. In addition, CMS should consider issuing guidance on the use of "crossover" drugs that can be covered by either Part B or Part D, depending on circumstances, especially for cases where the Part D program can absorb extra drug costs.

Finally, we caution CMS to consider the fundamentals of demonstration projects such as two phases of testing prior to mandatory national implementation. We also request that CMS focus on evidence-based efforts such as PBM tools with a direct impact on quality of care that address deficits in care, poor clinical outcomes, and potentially unavoidable expenditures.

If you need any additional information, please contact me at [email protected].

Sincerely,

Tim Dube

Vice President, Regulatory Affairs

cc: Amy Bassano, Acting Director, CMMI

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The rule can be viewed at: https://www.regulations.gov/document?D=CMS-2018-0132-2750

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