Today, the Centers for Medicare and Medicaid Services (CMS) announced the 15 additional drugs that will become eligible for drug price negotiation in 2027. The first 10 Part D drugs to be subject to Medicare price-setting were announced in July 2023. Adina Lasser, Director of Public Policy & Government Affairs with the Alliance for Aging Research, issued the following statement in response to this morning’s announcement:
“In the waning days of the Biden Administration, the Medicare Drug Price Negotiation Program continues to be touted as a beneficiary cost-saving measure, but a close reading of CMS’ list reveals what it truly is meant to do: serve as a tool for the federal government to save money. Notably, there is no mechanism by which the savings accrued from these negotiations—which are negotiation in name only—will pass to beneficiaries of the Medicare program.
Just like the first 10 drugs selected in 2024, the 15 drugs selected this year are those with the highest level of gross covered costs to the Medicare program—not to its beneficiaries. This means that negotiation is capturing drugs that serve large numbers of beneficiaries rather than drugs that induce sticker shock. In fact, most of the drugs that were selected treat or provide symptom relief for conditions that significantly impact beneficiaries in underserved rural communities and communities of color, including type 2 diabetes and obesity, pulmonary issues, prostate cancer, and bipolar disorder.
Also, like last year, the IRA guarantees formulary inclusion for all 15 selected drugs, but it doesn’t guarantee formulary placement for any of them. If a Part D plan switches formulary tier placement for a selected drug, beneficiaries may either need to pay more out-of-pocket to stay on it, switch to a preferred drug in the same class, or switch to a new plan. We remain concerned that plans will use non-preferred placement to push beneficiaries toward products that have not been negotiated to preserve rebate revenue.
CMS must take additional steps to ensure that payers don’t engage in utilization management (UM) abuse that results in loss of access to lifesaving treatments for beneficiaries. The Alliance for Aging Research has long opposed all government price-setting and has worked to encourage CMS to put needed UM protections in place—as I recently outlined in Health Affairs. Currently, CMS has only pledged to ‘monitor’ increased rates of utilization management, and no information on that monitoring has been publicly reported. A research report from Manatt and the Alliance demonstrates the agency knows this and is not using its existing authority to provide transparency or create needed guardrails that would protect patient access.
Older adults have spent their whole lives paying into the Medicare program. It is incumbent upon CMS to ensure that older Americans realize the cost-savings that have been promised to them and preserve access to the care they need and deserve.”
If you are a member of the media and want to learn more or interview Adina Lasser, Director of Public Policy and Government Relations on this issue, email Katie Riley, Vice President of Communications, at [email protected].