11/04/2024 | News release | Distributed by Public on 11/04/2024 17:05
Public policy is all about tradeoffs. With price controls in the Inflation Reduction Act (IRA), the Biden administration traded patients' certainty of access to the medicine they need in exchange for the appearance of savings. Despite what Dr. Seshamani, the Director of the Center for Medicare, would have you believe in her recent op-ed, it has been clear from the beginning that the IRA's price setting provision was not a negotiation. Instead, it's a deeply flawed and overly politicized process that puts the government between patients and their medicines.
Here are three things everyone should know about those price controls to see through the narrative being pushed by those who implemented them.
Price-setting is already causing disruptions in access to treatments and failed to rein in abusive insurer and PBM practices.
Dr. Seshamani claims that CMS prioritized protecting patient access in implementing the IRA's price setting provision when in fact, the IRA's price controls are threatening senior's access to medicines they need. Some 60% of insurers have stated they expect to add a utilization management requirement in response to price-setting, and 78% say they will limit therapeutic options available to Part D enrollees. This will make it harder for patients to get the medicines they need when they need them. Compounding this issue, in 2024 seniors saw the fewest standalone Part D plans available since the program was created and fewer low-income subsidy benchmark plans.
While the IRA made positive changes like the annual out-of-pocket cap in Medicare Part D, it failed to rein in abusive insurer and PBM practices that limit patients' access to care. Instead, these price controls have upended existing coverage plans, threatening millions of seniors' access to medicines they need. In fact, most seniors with Part D coverage are not expected to see any cost savings from price setting, and millions of seniors are expected to face increased costs.
The price setting process was a black box and failed to incorporate feedback from patients and providers.
Although Dr. Seshamani states that she is aiming to provide insight into the process, there is very little in her op-ed that constitutes new information. For example, CMS only allowed 30 days for stakeholders to comment, and it's unclear if any feedback from patients and physicians was factored in. Also, CMS did not collect any stakeholder feedback on critical parts of its guidance including the orphan drug exclusion and the special rule for biosimilars. The specific process and information CMS developed to arrive at these "maximum fair prices" (MFPs), remain largely a mystery to the public.
The administration is touting inflated figures, signaling false savings to voters.
The administration has touted an egregious claim that Medicare patients would save an estimated $6 billion. This is a far reach, considering the numbers are based on 2023 data and the new prices don't take effect until 2026. Changes in utilization of medicines in this three-year gap across Medicare patients will determine the true figure, making this estimate a shot in the dark.
At the end of the day, the IRA price setting framework is irreparably flawed, and can never be truly patient-centered, or truly negotiation. If CMS hopes to improve the process, the agency needs to reconsider the significant feedback that stakeholder groups have already provided. CMS should also make use of the full extent of its authority to ensure patient access is not disrupted in Part D, and work with Congress to rein in PBMs and insurers - if the agency truly wants to lower costs for patients.