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In comments recently submitted to the administration, PhRMA raised concerns with a number of changes included in the Centers for Medicare & Medicaid Services (CMS) Medicaid proposed rule. Today, we’re diving deeper into CMS’s proposal to vastly expand the types of medicines that would fall under the definition of a “line extension” and how that change threatens future development of needed cures and treatments by establishing a tax on innovation.

To provide some context, the proposed change builds on a concept initially introduced by Congress in the Affordable Care Act, which created a higher Medicaid rebate for “line extensions” of medicines – meaning slight changes to a medicine, such as a tablet’s color or shape, that were viewed as not providing any meaningful difference for patients. CMS’ proposed change to the line extension definition under the rule, however, would extend well beyond Congress’s original intent. In general, it would broaden the definition of a “line extension” to include any change to a “parent” medicine, where the “child” medicine contains at least one active ingredient in common with the parent medicine. This definition could include treatments with new dosage forms to improve administration, new indications and combination therapies that could reduce pill burden – improvements that often make a big difference for patients.

Through this revised definition, CMS is undercutting the importance of changes like a new dosage form or new indication, choosing to instead penalize manufacturers for pursing an improved version of a medicine. In a recent analysis, Xcenda identified 17 clinical trials that would likely be impacted by the overly-broad definition that CMS is considering.

Here is closer look at a few of these critical therapies that CMS is undervaluing and considering penalizing manufacturers for developing:

• COVID-19 treatments: There are currently more than 950 clinical trials testing investigational medicines for the treatment of COVID-19 that have been previously approved for other indications, such as antiviral combinations originally created to treat other viruses. As biopharmaceutical companies continue to repurpose existing medicines, CMS’s proposed definition could sweep in these new indications and could impact – and even halt – the research and development (R&D) of potential COVID-19 therapies.
  
  
• HIV combination therapies: Researchers have drastically reduced the number of daily medicines patients need to take and simplified previously complex treatment regimens for patients with HIV by combining as many as four different therapies into a single tablet. Ongoing investment in R&D has led to 22 combination therapy approvals, but by imposing higher line extension rebates, CMS is discouraging manufacturers from developing new ways to continue to improve HIV treatment.
  
  
• Mental health medications: Continuing innovations for mental health conditions are evolving to better meet the needs of patients where adherence is critical. For instance, a treatment first approved for patients with schizophrenia, and subsequently indicated for patients with bipolar disorder and major depressive disorder, is now available in a range of dosage forms, including tablets, oral solutions and long-acting injectables. For a patient with a mental health condition that impairs memory (such as Alzheimer’s disease), a medicine that can deliver a more steady or slower release dosage form is critical – it can help it stay in the body longer, in case they forget to take their medicine. Breakthrough advances and new delivery methods like these would fall within CMS’s proposed broader definition of what constitutes a line extension and are thus in jeopardy if higher Medicaid rebates are applied.

If finalized, the revised definition of a line extension would threaten the vitality of hundreds of medicines that are a result of years of R&D, as well as treatments that have undergone rigorous clinical trials and merited FDA approval. Perhaps most alarming is that CMS, through this proposal, is ignoring that an improvement could be the difference between a patient remaining adherent to their medicine or not. Proper medication adherence can help reduce costs to the entire health care system while improving patient care, quality and outcomes.

PhRMA opposes the finalization of the revised definition in CMS’s proposed rule and urges the agency to forego all changes that broaden the line extension definition. For more information, read our full comments here.

Nicole Longo

Nicole Longo is Deputy Vice President of public affairs at PhRMA focusing on Medicare, 340B, importation and more. She previously worked for a D.C.-based public affairs firm where she assisted a wide range of clients with communications efforts on everything from trade policy to agriculture policy to health care policy. Outside the office, Nicole can be found trying new restaurants (usually Italian), taking an occasional barre class and cheering on the Cincinnati Bengals.

Nicole Longo

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