The Trump administration is proposing to let insurers have more control over which drugs they offer through Medicare in an attempt to lower high drug prices.
The Centers for Medicare and Medicaid Services released a proposed rule on Monday that gives insurers in Medicare’s prescription drug plan more power to negotiate for lower prices for certain types of drugs.
“Seniors are in the driver’s seat, and they have the option to choose a different plan that meets their needs,” CMS Administrator Seema Verma told reporters on a call. “These new tools will only be as common as seniors want them to be.”
Medicare Part D, the program’s prescription drug plan through which seniors use private plans to buy drugs at the pharmacy, currently requires private plans to offer all drugs in six classes, including antidepressants and antipsychotics.
The requirement has meant that private plans have not been able to fully negotiate for lower prices for the drugs in the six classes.
The proposal would allow private plans to use tools called step therapy and prior authorization for drugs in the six classes. Through step therapy, a patient would only be able to get access to a pricey drug if a cheaper version did not work. Prior authorization requires an insurer to authorize a prescription of a product before a doctor writes the prescription.
CMS also aims to allow drugmakers to withhold a protected class drug if the price for that product skyrockets over a certain benchmark.
“Some say that allowing step therapy and prior authorization would restrict access to prescription drugs,” Verma wrote in a blog post on the changes. “However, these changes protect patient access, as the Part D program is embedded with strong patient protections.”
She said that CMS still reviews drugmakers’ offerings for Part D plans and the agency has sped up an appeals process that doctors can use to get exceptions to prior authorization.
CMS is considering a similar proposal to add step therapy to physician-administered drugs covered under Medicare, such as vaccines or chemotherapy drugs.
The agency is also considering a proposal that would tackle “back-end” deals between insurers and pharmacies. Sometimes insurers or pharmacy benefit managers, which manage drug plans for employer and union-sponsored plans, collect fees from pharmacies in the form of administrative or service fees.
“Independent pharmacies have raised concerns that back-end deals with health insurance plans are eroding competition and making it harder for them to continue providing medications to beneficiaries,” Verma wrote. “Plans can set performance requirements for pharmacies that may not be achievable, leading to large financial clawbacks from pharmacies and swings in revenues that pharmacies cannot manage.”
Verma added that seniors aren’t benefiting from the deals and are paying a price that is “higher than the amount that pharmacies are actually reimbursed for drugs.”
As a result, CMS is considering a proposal to require the price that the senior pays at the pharmacy to be the lowest possible cost. Verma didn’t say when CMS would release the proposal, but said that it could be in place for the 2020 Medicare Part D plan year.
