Medicare Advantage proposed rule earns praise, criticism from pharmacy groups and patient advocacy organizations

Thursday, December 13, 2018

A proposed rule that would expand the use of prior authorization and step therapy for Part D and Medicare Advantage beneficiaries has earned criticism from patient advocacy groups and praise from pharmacy groups.

The Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses proposed rule was published in the Federal Register November 30 and the proposals are due to be implemented January 1, 2020.

A key provision of the proposed rule is creating exceptions to the current protected classes of drugs. Under current regulations, Part D requires Medicare Advantage plans to include on their formularies all drugs in the following six classes except in certain limited circumstances:

  • Anticonvulsants
  • Antidepressants
  • Antineoplastics
  • Antipsychotics
  • Antiretrovirals
  • Immunosuppressants for treatment of transplant rejection

CMS is proposing to create three exceptions to this policy that it says will allow plans to negotiate lower prices and reduce beneficiaries’ expenses, according to the press release.

The first exception would allow plans to use prior authorization and step therapy for protected class drugs including to determine use for protected class indications without distinguishing between new starts and existing therapies. The exception would also allow indication-based formulary design and utilization management for protected class drugs. In addition, plans would be allowed to exclude the protected class drug from the formulary for non-protected class indications.

The second exception would allow plans to exclude protected class drugs that are a new formulation of a protected class Part D drug that does not provide a unique route of administration even if the older formulation is removed from the market.

The third exception would permit plans to exclude from the formulary any protected class drug whose price increases beyond the rate of inflation. The inflation rate would be calculated on the Consumer Price Index for all urban consumers.

The proposed rule would still require plans to cover at least two drugs in a protected category.

Several patient advocate groups have raised concerns that introducing step therapy and prior authorization could prevent patients from receiving quality care and ultimately lead to higher costs and poorer outcomes. According to the Partnership for Part D Access, the six protected classes of drugs are used by some of the most complex patients. Disrupting treatment for organ transplant patients or patients living with HIV, for example, could have serious or life-threatening consequences. Prior authorization is contrary to current federal HIV treatment guidelines, The AIDS Institute said in a statement. It also pointed out that step therapy is unheard of in HIV treatment due to the danger of developing resistance to an entire class of drugs and potential side effects. The National Kidney Foundation said that because prescribing effective immunosuppressant drugs to transplant patients must be tailored to the individual patient all drugs must be available. In a statement, the Partnership for Part D Access noted that legislation similar to the proposed rule was defeated in 2014.

“As a physician who practiced HIV medicine for over 20 years, the thought that an insurer could restrict access to a life-saving medication is abhorrent. The range of medications now available for HIV have changed the treatment paradigm dramatically from treatment of a fatal illness to a chronic manageable disease that can be controlled,” says Ronald Hirsch, MD, FACP, CHCQM, general internist and HIV specialist and vice president of R1 RCM in Chicago. “But in some patients, drug mutations are transmitted that require novel therapy. To be forced to have a patient fail a therapy which is known to have no efficacy before getting access to the right therapy is unconscionable.”

However, when a pharmaceutical company makes a simple molecular change to enable new patent protection with no new efficacy, as is seen with some of the newer antidepressants, restricting coverage or requiring step therapy is not unreasonable, Hirsch says. “But I would prefer to see a neutral party assess the medical literature and determine when restrictions or step therapy would not jeopardize a patient’s health.” 

Some pharmacy groups are hailing other provisions of the proposed rule that would see cost savings passed directly to patients by reforming direct and indirect remuneration (DIR) fee policies. DIR fees are price concessions that are not reflected at the point of sale for pharmacies. These fees are assessed weeks or months after prescriptions are filled and pharmacies might not realize until months later that they didn’t recoup their costs. In addition, beneficiary cost-sharing is based on a drug’s price at the point of sale; therefore, under current DIR policy the patient saves nothing.

The proposed rule would include DIR fees at the point of sale, allowing both the patient and the pharmacy to benefit from the savings, the American Pharmacists Association said. The National Community Pharmacists Association, the National Association of Chain Drug Stories, and the National Association of Specialty Pharmacy issued a joint statement praising the proposal, saying that it will ensure better price transparency.

Organizations should review the proposed rule to determine what, if any, impact the proposed changes would have. Comments on the proposed rule are due by 5 p.m. on January 25, 2019. Comments may be submitted electronically, by regular mail, or by express or overnight mail. When commenting on the proposed rule, organizations should keep in mind that CMS’ intention is to reduce beneficiaries’ costs and protect the Medicare Trust Fund without jeopardizing beneficiaries’ health and safety. Comments should address specific sections of the proposed rule and be supported with clear, thorough explanations.