PhRMA Statement on CMS Final Guidance on the Price Setting Provisions in the IRA

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The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are laser focused on developing innovative medicines that transform lives and create a healthier world. Together, we are fighting for solutions to ensure patients can access and afford medicines that prevent, treat and cure disease. Over the last decade, PhRMA member companies have invested more than $850 billion in the search for new treatments and cures, and they support nearly five million jobs in the United States.

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WASHINGTON, D.C. (June 30, 2023) – Today, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued the following statement in response to the Centers for Medicare & Medicaid Services (CMS) releasing final guidance on the Inflation Reduction Act’s (IRA) price setting provisions:

“While patients, providers, manufacturers and other stakeholders should have a say in how a policy of this magnitude is implemented, CMS incorporated very little of the feedback provided on its final IRA price setting guidance. The very few substantive changes to the final guidance demonstrate CMS saw this as a box checking exercise, not an opportunity to mitigate the negative impacts this price setting policy will have on patients or the broader health care sector.

“The approach CMS took in this final guidance confirms what we claimed in our lawsuit – Congress’ unconstitutional shortcuts taken in the law have given the administration far too much flexibility to set prices at their whim without any oversight or accountability to anyone. The final guidance demonstrates the administration is more focused on scoring political points than minimizing harm to patients, providers and future R&D.”

Outlined below are a few serious concerns with this final guidance:

Transparency has been severely limited.
- While we appreciate CMS recognizing it went well beyond legal limits and rescinding the proposed “gag clause” in the final guidance, CMS will continue to limit opportunities for manufacturers to raise issues of concern and provide feedback.
- CMS will not share any information about how or why decisions are made until months after the price is set.

Patient perspectives have been discounted.
- CMS has not committed to stating what evidence they intend to use in evaluating a medicine and setting its price.
- While there will be “listening sessions” with patients in the fall of 2023, it’s not clear how much patients and providers will truly be able to affect the process of price setting, or how much CMS will share with stakeholders.

Patients could lose access to medicines.
- Part D beneficiaries could have less access to medicines because of fewer plans and more restrictive formularies.
- While CMS has committed to reviewing formularies to evaluate formulary placement and utilization management for medicines selected for price setting, they have not addressed other medicines in the category and class that were not selected for price setting. This creates concern that seniors will not have robust access to medicines in a therapeutic class like they do now.
- CMS is disincentivizing manufacturers from conducting research and development for new treatment options, which would especially affect younger patient populations and those with rare diseases who have significant unmet medical needs.

You can learn more about these concerns here.

About PhRMA

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier and more productive lives. Since 2000, PhRMA member companies have invested more than $1.1 trillion in the search for new treatments and cures, including $102.3 billion in 2021 alone.

Connect with PhRMA

For information on how innovative medicines save lives, please visit:
www.PhRMA.org
www.Innovation.org
www.MAT.org
www.Facebook.com/PhRMA
www.Twitter.com/PhRMA

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