Patient access to drugs that are currently “protected” under the Centers for Medicare & Medicaid Services’ (CMS’) Medicare Part D plan, or drugs that the plan is required to pay for, may be severely impaired should a rule proposed by the CMS in 2018 be approved, according to a research letter that was published in JAMA. While the proposed policy is intended to produce savings for the Medicare program, it may also have an adverse effect on patient outcomes, argued the authors of the letter.
The researchers investigated the effect of the proposed rule on the currently protected drug classes, which include antineoplastics, antiretrovirals, antidepressants, antipsychotics, anticonvulsants, and immunosuppressants for transplant recipients. The proposed rule dictates that any brand-name, protected-class drugs that have list price increases that outpace inflation for the previous 3 years be excluded from Medicare Part D formularies.
They reviewed CMS Drug Data files from 2012 to 2017 for a list of these protected drugs, excluding generic drugs, biosimilar drugs, and what they described as “noninnovator” medications from the analysis. They looked at Medicare’s prerebate price changes per dosage unit of these therapies versus inflation over 1, 3, and 5 years. And, for 98 of the 143 drugs for which net price estimates were available (which account for negotiated rebates and discounts), they compared price changes compared with inflation.
The investigators found that prerebate prices for 126 (88.1%) of the protected-class medications outpaced inflation over the 1-year period of 2016 to 2017. At 5 years, of 80 of these drugs that had prices available for review during the period, 75 had prediscount price increases that exceeded inflation.
Furthermore, although the pharmaceutical industry often points to rebates and discounts as a reason for why drug prices remain high, the researchers performed a sensitivity analysis to calculate net drug prices and found that net price increases were still higher than inflation for nearly all (92.7%) protected brand-name medications, with a median increase of 36.5% over the study period (IQR, 22.4%-60%).
Thus, if the proposed rule were to become policy, nearly all of the drugs that the Part D plan is currently required to cover would be excluded, leaving patients with very few treatment options if drugs continue to be priced the way they are currently priced. And although the authors acknowledge they only used net price estimates for the analysis, and that final net costs are confidential and may differ from the estimates, they attest that real-world results would be similar to their estimated results. They added, “it is unclear to what extent any policy changes may encourage companies to restrain future price increases.”
Lastly, while the authors focused on Medicare Part D, they also concluded that a greater proportion of commercial plans and plans through the Affordable Care Act excluded protected-class drugs compared with Part D during the study period.
Because commercial insurers often follow what Medicare does for coverage determinations, this could imply that if the policy were to be passed as-is, the proportion of drugs that are excluded across commercially available plans could also increase further.
Hwang TJ, Dusetzina SB, Feng J, Maini L, Kesselheim AS. Price increases of protected-class drugs in Medicare Part D, relative to inflation, 2012-2017 [published online July 16, 2019]. JAMA. doi:10.1001/jama.2019.7521