Nine Physician Groups Voice Opposition to Medicare Drug Pricing Proposals

Yesterday, 9 physician groups sent a joint letter to HHS Secretary Alex Azar in which they voiced concerns about the President’s 2019 Budget and the Council of Economic Advisers’ drug plan.

The groups say that the proposal to increase Medicare Part D formulary flexibility to limit or reduce coverage for patients could create problems for patients taking high cost drugs like biologics and biosimilars. This proposal would change the Part D plan formulary standards to require a minimum of 1 drug per category or class rather than the current 2. “We believe Part D benefits should not limit patients’ access to the medical therapy judged by the treating physician to be the most efficacious choice,” say the groups.

In addition, consolidating Part D drug coverage under the Medicare Part D program could also lead to access problems and force patients to use higher-cost sites of care. Given the different formulary structure and cost sharing between Part B and Part D, the groups worry that out-of-pocket costs for patients would increase, particularly for patients taking biologics prescribed by rheumatology, oncology, and neurology providers.

The groups also oppose a restructuring of Medicare Part B physician reimbursement for in-office treatment that would pay physicians 3% above the average sales price (ASP) of a drug rather than the current ASP plus 6%, and the letter urges HHS to repeal the sequester cuts to Part B drug reimbursements: “Many small and rural practices lack the ability to negotiate bulk discounts in their drug purchases and have already been forced to stop administering biologic therapies to Medicare patients,” the letter states.

Finally, the groups call for further clarification on introducing physician reimbursement that is not tied to drug prices, as physicians have no control over the cost of drugs or ancillary services, nor do they control the severity of the illnesses that these drugs treat. “Our physicians should not be penalized for rampant inflation in these sectors,” they said.

The physician groups made it clear that they support proposals that would:

• Require Medicare Part D plans to apply a substantial portion of rebates at the point of sale
• Establish a beneficiary out-of-pocket maximum in the Medicare Part D catastrophic phase, providing beneficiaries with better protection against high drug costs
• Decrease the concentration in the pharmacy benefit manager market and other segments of the supply chain
• Provide guidance from CMS on how drug-related value-based contracts and price reporting would affect other price regulations

The letter was signed by the American Academy of Dermatology Association, American Academy of Neurology, American Academy of Ophthalmology, American Academy of Physical Medicine and Rehabilitation, American College of Gastroenterology, American College of Rheumatology, American Gastroenterological Association, American Urological Association, and the Infectious Diseases Society of America.