Conversation with Medicare director focuses on drug price negotiations

By Prerna Mona Khanna, M.D., MPH, California Health Journalism Fellow

In this Q&A session at Health Journalism 2024, Meena Seshamani, director of the Center for Medicare at CMS, provided updates on negotiations and implementation of Medicare's historic prescription drug price negotiations, implemented as part of the Inflation Reduction Act (IRA).

"It's the biggest change to the Medicare Prescription drug program since Part D was introduced," Seshamani said as she opened the session by highlighting the historical significance, importance and impact of the ongoing prescription drug price negotiations.

The negotiations have the potential to affect 65 million total Medicare enrollees, with an estimated $7.4 billion savings in out-of-pocket costs, Seshamani said, with service add-ons, like creating a code for provider billing and training unpaid family caregivers.

More than the 30,000-foot numbers, patient stories still stand out as the best barometer of the impact of the drug program. One story shared was about a woman who was vaccinated for COVID four times because it was free but had passed on the shingles vaccination because it cost up to $200 per out-of-pocket per injection. After the drug price negotiations program was implemented, the woman was able to obtain the shingles vaccination free of charge.

Drugs that are targeted for price negotiations include those that are "top spend," or more than $200 million annually, those that meet unmet needs, and those that advance equity of DEI populations, among other criteria, Seshamani said.

One of the ways the government has tried to soften the pushback by Big Pharma is by proactively holding good faith negotiations and listening tours with patient groups, providers, thought leaders and drug companies, she said. This engagement has further been boosted by a thoughtful implementation, taking stakeholder feedback into consideration and offering technical assistance every step of the way.

For example, Seshamani talked about an outreach roundtable she participated in with senior citizens in New York City the day before the AHCJ session to understand better how seniors can access information. Aside from online, telephone, and printed materials outreach, she echoed a familiar theme of many panelists at HJ24 by stating that she relies on health care journalists to help get information out and help increase awareness of the issues at play.

An indirect advantage of the program is the potential for downstream and generalizable effects of Medicare initiatives. "Where Medicare goes, sometimes pharmaceutical companies will decrease costs for others as well," said Seshamani, pointing to the expanding $35 cap for insulin co-payments that began as a benefit for 4 million Medicare patients.

But despite these advances, a non-interference clause in the law hampers her office's ability to make other changes, such as influencing drug price negotiations between pharmacies and health plans, she said. This is somewhat mitigated in that if manufacturers increase the cost of a drug more than inflation, they have to pay the difference back to Medicare.

After the panel remarks, several audience questions centered on patient confusion about Medicare plans and Medicare coverage, especially misleading advertising directed at enrollees. Seshamani stated that her office rejected more than 1,000 television ads for being misleading and not representing all coverage options for seniors.

Prerna Mona Khanna, M.D., MPH, is a triple board-certified physician and independent medical reporter based in Palm Springs, Calif. She is a 2024 AHCJ-California Health Journalism Fellow.