CMS Issues Letter to Plans and PBMs on Growing Concerns Related to Pharmacy Sustainability
The Centers for Medicare & Medicaid Services (CMS) issued a letter addressed to Pharmacy Benefit Managers, Medicare Part D Plans, Medicaid Managed Care Plans, and Private Insurance Plans. The letter appreciates their collaboration in providing healthcare coverage but expresses growing concerns about practices that threaten pharmacy sustainability, hinder access to care, and burden healthcare providers. CMS urges cooperation to address these issues, particularly regarding vaccines and treatments for influenza, COVID-19, and RSV during the winter respiratory virus season.
CMS emphasizes the critical role of pharmacies, especially small and independent ones, and discusses the finalized pharmacy price concessions provision for Medicare Part D. Concerns about potential impacts on pharmacy cash flow lead CMS to delay the provision’s effective date by one year and encourages Part D plan sponsors and PBMs to make necessary cash flow arrangements. The letter also highlights payment issues for vaccine administrations, concerns about vertical integration leading to anticompetitive behavior, and challenges in navigating exceptions processes for contraceptive drugs. It concludes by noting Medicaid and CHIP coverage for routine vaccinations and urging plans and states to ensure compliance with federal coverage requirements. The letter is signed by key CMS figures.
House Price Transparency Bill Passes with Bipartisan Majority
The “Lower Costs, More Transparency Act” passed along a bipartisan majority vote in the House. The bill aims to streamline the Food and Drug Administration’s (FDA) approvals of generic drugs to increase competition with high-cost name-brand drugs. The bill would also increase price transparency for patients and employers to make informed health care decisions in a timely and accurate manner about the costs of care, treatments, and services—by making price information publicly available online. Additionally, the bill seeks to fully pay for expiring programs to strengthen the broader health care system, including supporting Community Health Centers for rural and underserved populations, supporting training programs for new doctors, and preserving Medicaid for hospitals that take care of uninsured and low-income patients.
House Passes SUPPORT Reauthorization Act
The House passed the SUPPORT Reauthorization Act, a comprehensive legislative package aimed at addressing the opioid use disorder epidemic. The original SUPPORT Act, passed five years ago, lapsed on September 30 due to legislative inaction. While the House reauthorization faced delays over a dispute on reclassifying xylazine as a controlled substance, House Republicans successfully included the provision, garnering nearly 385 votes. The language for the bill now heads to the Senate for consideration, where the Senate HELP committee recently passed their own version of the reauthorization. Because of the conflicting bills, there are concerns about the reauthorization’s completion by year-end, as differences between the two chambers need reconciliation. The Senate’s version features notable changes such as doubling the Substance Use Disorder Treatment and Recovery Loan Repayment Program, expanding access to test strips for fentanyl and xylazine, and a 70% increase in funding to train more behavioral health care workers. However, the process was hindered by competing interests and disagreements, with discussions in the Senate primarily centered on appropriate funding levels. Despite passing six amendments, the Senate rejected others, including one to codify telehealth prescribing for medications treating opioid use disorder.
The National Institute for Public Employee Health Care Policy Releases New Research on How Public Sector Plans Tackle Rising Drug Costs
The National Institute for Public Employee Health Care Policy released its first white paper, “How Public Sector Health Care Purchasers Are Addressing Rising Drug Costs.” Based on a comprehensive survey of diverse purchasing organizations that collectively represent the interests of more than 5 million public sector employees and retirees, the paper explores strategies employed by public sector purchasers to sustain drug affordability. The paper also examines their relationships and contracting practices with pharmacy benefit managers. Further information for Roundtable members who are interested in joining the Institute will be made available in the new year.
The Centers for Medicare and Medicaid Services (CMS), Office of the Actuary published a fact sheet on U.S. health care spending in 2022. In 2022, U.S. health care spending reached $4.5 trillion, growing 4.1%, faster than 2021 but slower than the spike in 2020. This increase was influenced by robust Medicaid and private health insurance spending, partly offset by reduced federal COVID-19 supplemental funding. The insured population hit a historic high of 92%, with private health insurance and Medicaid seeing respective increases of 2.9 million and 6.1 million enrollees. Health spending by funding sources indicated a 5.9% rise in private health insurance, 5.9% increase in Medicare spending, and 9.6% growth in Medicaid spending in 2022. Overall, federal and household contributions represented the largest shares of national health spending (33% and 28%, respectively), with the federal government’s Medicaid payments contributing significantly to the increase.
- U.S. Senators Elizabeth Warren (D-Mass), Catherine Cortez Masto (D-Nev.), Bill Cassidy (R-La.), and Marsha Blackburn (R-Tenn.) sent a letter to the Centers for Medicare and Medicaid Services (CMS) regarding concerns with CMS’ data collection and reporting practices for Medicare Advantage (MA) plans. The Senators urged CMS to close data gaps to strengthen oversight of MA plans and improve care for Medicare beneficiaries. Specifically, the Senators urged CMS to collect and publish data including, prior authorization requests, denials, and appeals by type of service, justification of prior authorization denials, timeliness of prior authorization decisions, complete encounter data, and utilization of supplemental benefits and associated out-of-pocket costs. They also requested that CMS publicly release data that the Agency is already collecting, such as out-of-pocket costs and provider payment information, disaggregated disenrollment data, and plan comparison information. Lastly, they are also asking CMS to provide a staff-level briefing on its plan to improve its data collection and reporting practices for MA plans by December 27, 2023.
- The Congressional Research Service (CRS) released a report on the Medicare Drug Price Negotiation Program established under the Inflation Reduction Act (IRA). Enacted as part of the 2022 budget reconciliation legislation, the IRA empowers the Secretary of Health and Human Services to negotiate prices for certain drugs under Medicare Part B and Part D. The Program, which focuses on single-source chemical drugs and biological products, imposes criteria such as Food and Drug Administration (FDA) approval for at least 7 years for chemical drugs and 11 years for biological products. This report addresses various congressional concerns regarding the IRA’s implementation, including ongoing litigation, potential impacts on drug innovation and research, and questions about its relationship with pharmaceutical patents and federal marketing protections. Stakeholders have urged Congress to reconsider certain IRA provisions they believe may negatively affect pharmaceutical research and development and undermine existing patent and marketing protections.