The Health Policy War Room

A recent JAMA Viewpoint article discusses how limited-supply agreements between brand name and generic drug makers could impact Medicare price negotiation under the Inflation Reduction Act (IRA). These agreements allow brand manufacturers to maintain some market exclusivity by limiting the supply of generic competitors. The article suggests these deals may increase as the Centers for Medicare and Medicaid Services (CMS) implements the IRA's price negotiation provisions. From a business perspective, it's understandable why brand manufacturers might find limited-supply agreements preferable to having their drugs subject to Medicare negotiation. Maintaining even partial exclusivity is likely better for revenue than triggering government-dictated price reductions. However, policymakers and patients are increasingly concerned that these deals keep prices high despite generic availability. The use of limited supply agreements could also produce unintended consequences.  Balancing som...

Access to affordable health care is a persistent challenge for many Americans. However, a recent bill, the Protecting Health Care for All Patients Act (HR 485) , is making its way through the House of Representatives, which could hinder efforts to improve affordability of prescription drugs and other health care services. The bill seeks to block the use of quality-adjusted life-years (QALYs) and similar measures in government health care programs such as Medicare and Medicaid. QALYs are a widely accepted outcome measure used in health economic studies to assess the benefit of a therapy compared to standard care. They combine two critical health outcomes—length of life and health-related quality of life—into a single measure. QALYs are calculated by assigning weights to different health states, ranging from perfect health to death. By using QALYs, policymakers can estimate the average benefits of a treatment for a specific population. The debate over the use and impact of QALY is beyond...

In the ever-evolving landscape of healthcare, the rising costs of prescription drugs continue to be a major concern for patients, providers, and payers alike. Drug spending is a complex issue with many different dynamics at play. While the Medicare program has recently been given authorities to control drug spending, some have expressed concern that these efforts will only shift drug cost pressures to different parts of the healthcare system. The escalating cost of prescription drugs is a significant burden on both patients and payers. As the prices of pharmaceuticals continue to soar, it is crucial to understand the myriad factors behind this trend. Pharmaceutical companies cite research and development costs, regulatory requirements, and the need for profit as justifications for the high prices. The ballooning drug costs have prompted federal interventions aimed at curbing the financial strain on the healthcare system. CMS now has the authority to negotiate the price of some prescri...

Recently, much has been written about the escalating costs of drug prices in the US. Increasing drug prices are present challenges to those who struggle with affordability and access to their medications. The Inflation Reduction Act brought changes to the way the Medicare program reimburses for prescription drugs. Last year, President Biden challenged the Center for Medicare and Medicaid Innovation (CMMI) to develop and test new payment models that can support value-based payments and promote high-quality healthcare. CMMI has recently proposed three models intended to improve affordability and access to drugs as well as measuring the feasibility of implementation.       1. The Medicare High-Value Drug List Model Under this model, Part D plans would be encouraged to offer a low, fixed co-payment across all cost-sharing phases of the Part D drug benefit for a standardized Medicare list of generic drugs that treat chronic conditions. Patients picking plans that particip...

In the CY 2022 Physician Fee Schedule Proposed Rule, released yesterday (https://public-inspection.federalregister.gov/2021-14973.pdf) CMS is proposing two changes to its long-standing policies on drug pricing.  First, CMS is proposing to require manufacturers of drugs covered under Part B to report ASP data even if the manufacturer does not have a Medicaid rebate agreement. Noting that many manufacturers without a Medicaid rebate agreement currently report ASP data to CMS, CMS believes its proposed will cause little upset to manufacturers and would in fact preserve the status quo.  In a 2017 report (http://medpac.gov/docs/default-source/reports/jun17_ch2.pdf), MEDPAC presented findings many repackagers do not report ASP data to CMS and that this failure to report could be skewing Medicare payment rates. In this year’s proposal, CMS presents its own findings that exempting repackagers from reporting ASP data could increase errors in ASP calculations and delay CMS’s ability to ...

On June 22, Senator Ron Wyden (D-Ore.), Chairman of the Senate Finance Committee released his own set of “principles” for lowering prescription drug prices. Characterized as a step toward “comprehensive legislation” on the matter, the principles are said to guide Wyden’s work during the summer months with the ultimate goal of delivering relief from high prescription drug prices. Wyden’s principles largely reflect the concepts that have been widely circulated as parts of many prior statements on reducing drug prices. Medicare negotiation, limiting out-of-pocket costs at the pharmacy counter, controlling price increases for older drugs, and rewarding innovation are concepts that have been debated at length in the past. Wyden also suggests that any drug pricing proposals should apply to all Americans – not just those covered by Medicare. Acknowledging the work already done by the Senate Finance Committee, Wyden’s goal is to develop a legislative package, with bipartisan support, that can ...