CMS makes revisions to Medicare Drug Price Negotiation Program guidance

Following extensive public comments CMS received on the initial guidance released in March 2023, the revised guidance makes some steps towards increasing transparency in the highly controversial drug pricing program established under the Inflation Reduction Act. 

Late last week (June 30, 2023), Centers for Medicare & Medicaid Services (CMS) announced revised guidance for the Medicare Drug Price Negotiation Program required through the Inflation Reduction Act. Through this program, Medicare, the federal health insurance program for people 65 or older, will for the first time be able to negotiate maximum fair prices with companies for certain medicines. The new guidance comes after several lawsuits have been filed in recent weeks by claiming the mandated drug pricing provisions to be ‘unconstitutional.’ How this revised guidance affects these lawsuits remains to be seen and, according to Xavier Becerra secretary of the Department Health and Human Services whilst oversees CMS, the agency remain forthright in their plan. 

“Pharmaceutical companies have made record profits for decades. Now they’re lining up to block this Administration’s work to negotiate for better drug prices for our families. We won’t be deterred. President Biden made it possible for Medicare to negotiate prescription drug prices. Today’s action is a critical step in reaching that goal.” 

 

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Extensive feedback 

With CMS due to announce the list of 10 Medicare Part D drugs to be selected for negotiation for 2026 by September 1, 2023, the agency is under pressure to meet the timeline to implement the Medicare Drug Price Negotiation Program. The revised 198-page guidance considers some of the >7500 comments the agency received on the initial guidance from various stakeholders including consumer and patient organizations, drug companies, pharmacies as well as academic experts, thought leaders and other individuals. The revised guidance will be used in the negotiation process to set the maximum fair prices for drugs in 2026; the comments received may also be used in development of program guidance for years 2027 or 2028, and further public comment will be sought for this guidance. 

Meena Seshamani, Director, Center for Medicare at CMS explained, “Public feedback, both through seeking comments on the initial guidance and extensive engagement, has been instrumental in our policymaking and implementation efforts to date. We look forward to ongoing collaboration and engagement with all interested parties on the Negotiation Program and other provisions of the drug law as we continue our thoughtful implementation.” 

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Key changes  

As noted in CMS’ press release, many of the changes within the new guidance have been made, “to improve transparency and foster an effective negotiation process.” For example, CMS has revised its confidentiality policy and the guidance now includes provisions for the agency to provide a narrative explanation of the negotiation process when the explanation of the maximum fair price is published. 

CMS also provided more clarification towards how it will identify selected drugs. For orphan drugs, for instance, a drug with more than one designation from the FDA for a rare disease or condition will not qualify for the Orphan Drug Exclusion, even if the drug has not been approved for any additional indications. 

The guidance also sets out additional opportunities for the agency to facilitate communication during the negotiation process on the selected drugs with both drug companies as well as patients. Importantly, through patient-focused listening sessions patients, the first of which will take place later in 2023, caregivers, patient advocacy organizations and others will be able to share input on a selected drug’s therapeutic alternatives, how the drug addresses unmet medical need, and how the drug impacts specific populations. This will enable CMS to, “take a qualitative perspective when reviewing a selected drug and consider the evidence, including real-world evidence, clinical input, and patient and caregiver input, in totality.” 

Once the first 10 Medicare Part D drugs are announced in September, the public is then invited by CMS, until October 2, 2023, to provide data for therapeutic alternatives to the selected drugs. CMS will consider data including comparative effectiveness data, real-world evidence, patient-centered outcomes, and patient experience data as well as data related to unmet medical need, and data on impacts on specific populations.