PhRMA comments in response to request for information on competitive bidding program in Medicare Part B

PhRMA raised a couple key areas for the Administration to consider before moving forward on any CAP proposal

Nicole LongoSeptember 25, 2018

PhRMA comments in response to request for information on competitive bidding program in Medicare Part B.

Yesterday, the Pharmaceutical Research and Manufacturers of America (PhRMA) submitted comments in response to the recent 2019 Hospital Outpatient Prospective Payment System proposed rule, including the request for information (RFI) regarding the creation of a competitive acquisition program (CAP) in Medicare Part B through the Center for Medicare & Medicaid Innovation (CMMI). In the comments, PhRMA raised a couple key areas for the Administration to consider before moving forward on any CAP proposal, including:

  1. Protect patient access to medicines: “Part B’s current structure ensures the availability of a range of treatment options. Due to the personalized nature of many medicines in Part B and the diseases that they treat, physicians and patients need maximum flexibility to tailor … treatments to meet patients’ needs, consistent with clinical evidence and the physician’s expertise and knowledge of individual patients’ needs and preferences. For this reason, imposing conventional, cost-driven formularies or other utilization management tools would put patient access to treatment at risk.”

  2. Leverage existing authority under the CAP statute: “As it considers developing a competitive bidding model, we urge CMMI to adhere to the existing CAP statute. Many of the challenges associated with the CAP statute were addressed in rulemaking after the program had ended. We suggest that reviving CAP with these changes … could be enough to meet CMMI’s stated goals to ‘test private market strategies and introduce competition to improve quality of care for beneficiaries, while reducing both Medicare expenditures and beneficiaries’ out of pocket spending.’”
  3. Finalize guiding principles for CMMI outlined in New Direction RFI: “If CMS chooses to implement competitive bidding in Part B using CMMI authority, this proposal should be preceded by codifying in rulemaking the CMMI Guiding Principles laid out in the CMMI New Direction RFI and the additional protections recommended by PhRMA and other stakeholders. These principles included prioritizing voluntary models and small-scale testing. Consistent with these principles, any new model should allow stakeholders the option of whether or not to participate.”

  4. Preserve market-based structure of Medicare Part B: “One example of the successful market-based system can be understood by looking at Average Sales Price (ASP), which works to moderate price growth for Medicare Part B medicines. … Reimbursement for Part B drugs is generally based on ASP, which reflects the weighted average of discounts and rebates given to providers and payers, subject to certain exceptions. This means that the Medicare program and beneficiaries benefit from the discounts health plans and providers negotiate on these drugs. Due to this market-based competition, ASP prices are often substantially lower than list prices.”

Since its creation more than 50 years ago, the Medicare Part B program has played a crucial role in ensuring patients with some of the most complex, chronic conditions continue to have access to the care and treatment they need. The program has done so while controlling costs and evolving with the changing health care landscape. As policymakers consider changes to Part B, it will be important to consider the successes of the program and the many implications for some of our nation’s most vulnerable patients.

Read our full comments here and learn more about Medicare Part B at


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