Federal officials recently selected 15 medicines — including several revolutionary weight-loss injections, four cancer therapies and a pill that treats bipolar disorder — for Medicare’s drug price negotiation program.
Unfortunately, doctors had no say in which medicines were selected. And they’ll have almost no input into the negotiation process unless changes are made to policies in force at the Centers for Medicare and Medicaid Services.
CMS must involve physicians in this process — and in a meaningful way. These price negotiations will reshape Medicare drug plans and affect which medicines are available to tens of millions of patients. Absent expert guidance from practicing physicians, Medicare could inadvertently limit access to lifesaving drugs.
The negotiation process has flaws. First, it threatens future clinical research. For this coming round of negotiations, CMS defined drugs with the same active ingredient — like Ozempic, Wegovy and tablet diabetes therapy Rybelsus — as a single drug. That’s clinically inappropriate.
Drugs with the same active ingredient may receive regulatory approval at different times. They may also be dispensed at various times, in different dosages, or even for different medical conditions. In other words, their applications may be distinct. Yet, they’re all subject to the same negotiated price.
Drug companies will respond by calling off research into new uses for existing medicines.
Second, the negotiations could make it harder for patients to access specific drugs.
When CMS negotiates a lower price for a drug, the insurers that administer Medicare Part D plans must cover it in some way. However, they have considerable latitude in determining how to do it. Some may make it readily available. Others may require patients and doctors to jump through hoops to get it.
Insurers have strong financial incentives to favor medicines that come with significant rebates from drug companies. So, they may impose barriers to accessing drugs subject to price negotiations since they won’t receive lucrative rebates.
Is a negotiated drug a better fit for a patient’s genetic profile or health history than a high-rebate alternative? That patient may have to jump through hurdles to gain access to it.
These warped incentives could increase out-of-pocket costs as insurers steer them toward drugs that suit their bottom line rather than those their physicians recommend.
Nevertheless, the previous administration excluded doctors from the price negotiation process. Later this month, CMS plans to host a “town hall meeting focused on clinical considerations related to the selected drugs.”
One town hall is better than nothing. However, a single meeting does not offer physicians a real opportunity to weigh in on the clinical consequences of selecting these 15 medicines for negotiation. It sounds more like a check-the-box exercise than a genuine attempt to solicit doctors’ advice.
The administration can revise CMS guidance and give physicians far more input into the final price of selected drugs. Doing so would help ensure that the price negotiation program doesn’t hurt the patients it is meant to help.
The administration — in concert with Congress — also has an opportunity to help patients by reforming the selection criteria for the price negotiation program.
Currently, biologic drugs — typically injected or administered intravenously — cannot be selected for the price negotiation program until they have been on the market for 11 years after FDA approval. By contrast, small-molecule drugs — which typically come in pill form — are eligible for selection seven years after FDA approval. All 15 of the recently selected medicines are classified as small molecules.
This “pill penalty” is causing pharmaceutical companies to pull back on small-molecule research and redirect their efforts to biologics, which offer four additional years of market-based revenue before negotiated prices take effect.
A bipartisan group of legislators has introduced legislation called the Ensuring Pathways to Innovative Cures (EPIC) Act to eliminate this pill penalty by giving small molecules the same 11-year exemption from being selected for price negotiations. It would ensure that researchers pursue the most scientifically promising medicines rather than making research and development investments based on arbitrary policy made in Washington.
Minor differences between drugs in the same therapeutic class can profoundly affect patient outcomes. Without clinicians helping to guide the drug-price negotiation program, CMS could unintentionally restrict treatment options, create ethical dilemmas for physicians, and compromise the quality of care patients receive
It’s time to set things right.
