Your thoughts on drug pricing are needed

A cornerstone of President Trump’s campaign platform was a solution to the ever-increasing cost of prescription drugs. Recently, the administration released a “blueprint” for solving the problem. Although designed to improve price competition and lower consumer and Medicare costs, many physicians are concerned the proposal may reduce patient access to drugs they need and could even increase costs. Notably, the proposal does not allow Medicare to negotiate drug prices – something President Trump embraced on the campaign trail. Nor does it allow for importation of drugs from other countries.

However, it does attempt to take on the price negotiation between drug manufacturers, insurance companies and the middlemen known as pharmacy benefit managers (PBMs). A key aspect of the blueprint is reduction of retail drug prices to reflect discounts from manufacturers often paid in the form of rebates to insurers and PBMs. Another positive aspect is that it would prohibit “gag clauses” that forbid pharmacists from informing patients they could save money by obtaining their drug outside of their plan.

The proposal also contains many more troubling proposals which could impact allergists and our patients. Two of the most significant are:

1. Switching Part B drugs to Part D: Drugs administered in the office such as biologics and IVIG are currently covered and paid for under a patient’s Medicare Part B benefits. The President’s proposal would move some drugs to Part D. Under Part D, the government contracts with private health insurance companies that negotiate discounts with drug makers. No such negotiation takes place under Part B, and the physician is reimbursed at a rate of the average sales price +6%. Medicare beneficiaries typically pay a larger share of the costs for Part D drugs – especially since they are not covered by Medigap policies. In addition, there are nine million Medicare beneficiaries enrolled in Part B that do not have drug coverage under Part D. It is unclear how their drug bills would be paid if the administration were to implement this proposal.

  • Concern: If drugs like biologics and IVIG, which are administered in the office, are moved to Part D, allergists would have to deal with multiple coverage policies from multiple Part D plans – all of which might have different policies with respect to drug utilization, step therapy and the like. Lack of transparency by Part D plans makes it difficult, if not impossible, for allergists to know up front what drugs are covered by a Part D plan and what the cost is to the patient. 
  • Concern: Many Part B drugs are already expensive and a switch to Part D could result in patients absorbing more of the cost - especially if these drugs are placed in higher cost-sharing tiers. This would limit access. 
  • Concern: Part D plans are more likely to impose unreasonable prior authorization and step therapy requirements, also reducing patient access to medically necessary drugs.

2. Reducing Part D formulary requirements: The proposal would also consider eliminating the Part D requirement that plans cover at least two drugs in each class.

  • Concern: This might cause Part D plans to further limit access to drugs for allergy and asthma be reducing their formularies to offer only very basic drug coverage.

We need your help! We would like your feedback regarding administrative difficulties you currently face in making sure Medicare beneficiaries obtain their prescribed drugs. We also would like any suggestions you may have for how these problems could be solved. Anecdotal evidence from your practice related to inappropriate coverage policies, step therapy, coverage denials and the like are welcome.

Please send your feedback to the AdvocacyCouncil@acaai.org by July 11 so we can include it in our comments to the administration.

Advocacy Issue: 
Billing, Coding & Payments