PhRMA submits comments to CMS on Medicaid proposed rule

In response to the Centers for Medicare and Medicaid Services’ (CMS) proposed rule regarding changes to Medicaid, PhRMA provided feedback on how the changes included would have widespread impacts on the biopharmaceutical marketplace and patient care. Specifically, PhRMA noted two significant areas of concern for the Administration to consider.

• It could lead to patients paying more out of pocket for medicines through changes related to patient assistance programs. As noted in PhRMA’s comments, “Patient assistance programs provide an important source of financial support for eligible patients and can improve patient adherence, leading to improved patient outcomes.” Unfortunately, CMS is proposing to make it more difficult for manufacturers to offer assistance, despite the positive impact that this assistance can have on patients and their health. “If finalized, these changes could potentially reduce the availability of patient assistance, which could, in turn, inhibit the ability of patients to pay their out-of-pocket costs. As a result, these proposed changes could lead to patient abandonment of necessary therapies and could worsen health outcomes.”

• It risks impeding progress in patient care through its proposed revised definition of a “line extension.” As explained in PhRMA’s comments, “The [Medicaid] statute expressly delineates the bounds of a ‘line extension’: product alterations similar to changing an immediate release drug to an extended release formulation. Congress passed this narrow definition to target ‘slight’ changes in drugs, such as changes in color … .” Yet CMS is proposing a new definition that would sweep in many categories of innovative medicines not just those medicines with “slight” changes, subjecting them to higher Medicaid rebates. “If finalized, the proposal would create serious financial penalties for manufacturers seeking to improve their products based on continually evolving research and science and risks impeding progress in patient care at a time when pharmaceutical innovation is more important than ever.” Now is not the time for policies that could discourage continued investment in research and development of innovative medicines.

At the same time, PhRMA also recognized some of the other pieces of the proposed rule as potential steps in the right direction. For example, the Administration’s continued efforts to help support market-based solutions, such as value-based arrangements (also called value-based contracts), are greatly appreciated. At the same time, PhRMA’s comments highlighted one aspect of the value-based arrangements proposal that was particularly unclear – the proposal for “multiple best prices.” Having identified a number of key policy and operational questions that need to be addressed, PhRMA asked CMS to issue a revised proposed rule on this concept.

The proposed rule includes a number of complex changes with significant implications for patient care. Despite this, the Administration crammed all these changes together in one rule with an extremely short review period – diminishing the importance of taking the time to ensure these changes are in the best interest of patients. Rather than rushing to advance such far-reaching policies, CMS should fully consider the impacts these changes could have and carefully review the comments submitted by all of the stakeholders before moving forward.

For more information, read our full comments here.