Stakeholders Respond to the US Administration's International Pricing Index Proposal

Yesterday, the Trump administration released a new plan aimed at reducing Medicare’s costs for prescription drugs. Under the plan, CMS would be able to set its prices for some drugs, including biologics, based on the prices paid in other nations. Since the announcement, several stakeholders have spoken out about the proposed change.

Yesterday, the Trump administration released a new plan aimed at reducing Medicare’s costs for prescription drugs. Under the plan, CMS would be able to set its prices for some drugs, ncluding biologics, based on the prices paid in other nations.

Extending over a 5-year period, from 2020 to 2025, the proposal would allow CMS to implement a mandatory model deemed the International Pricing Index (IPI), which would enable Medicare to more closely align its Medicare payment amount for selected Part B drugs with prices paid in other nations, as well as allow for private-sector negotiation of drug costs. According to CMS, the proposal could generate 30% savings in total spending for the selected drugs. However, the report's figures do not take into account the prices of biosimilars; instead, it only compares prices of reference products.

Since the announcement yesterday, many industry stakeholders have spoken out about the proposed change.

The Community Oncology Alliance (COA), cautions the Trump administration against “disruptive changes” to the current Part B distribution and cancer care delivery system.

“COA is concerned that the IPI will either repeat past reform mistakes (such as the Competitive Acquisition Program, CAP) or introduce the same cancer treatment access challenges experienced by cancer patients today with pharmacy benefit managers and other middlemen under Medicare Part D,” read the statement.

Additionally, COA commented that “The notion that physicians, and oncologists in particular, practice medicine driven by financial incentives is not only false, but also highly offensive.”

In an interview with The Center for Biosimilars®, Ted Okon, executive director of COA, underscored his concerns about the proposal. "By bringing in private sector entities, which translates to middlemen like [pharmacy benefit managers]...we're extremely concerned about the adverse impact that this could have on patients. [CMS is proposing to] unduly complicate what is a very efficient system now."

The American College of Rheumatology (ACR) echoed COA’s concerns, explaining that while the organization agrees with the President that drug prices are too high, it is also important that efforts to address these costs do not limit access to treatment for Americans with chronic illnesses.

ACR stated that sometimes efforts to combat high costs create significant access issues and penalize doctors for providing quality care. “These proposals include those restructuring reimbursement for Medicare Part B drugs through either flat fee payments or a competitive acquisition program or allowing utilization management such as step therapy or ‘fail first’ protocols in the Medicare Part B program.”

Additionally, the president and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), Stephen J. Ubl, had harsh words in regard to the proposal. “The administration is imposing foreign price controls from countries with socialized healthcare systems that deny their citizens access and discourage innovation,” Ubl said in a statement.

"These proposals are to the detriment of American patients…the proposed Medicare Part B model would jeopardize access to medicines for seniors and patients with disabilities living with devastating conditions such as cancer, rheumatoid arthritis, and other autoimmune diseases,” he added.

However, some organizations did not share these apprehensions.

Though the report did not specifically mention the savings that could be generated by biosimilars, Juliana Reed, president of the Biosimilars Forum said, “We agree with President Trump on the importance of providing Medicare patients with access to affordable treatments and reducing overall costs…The White House’s continued support for biosimilar treatments will help increase the growth of this critical industry.”

Similarly, David Mitchell, the founder of Patients for Affordable Drugs (P4AD), tweeted that the organization “Back[s] reference pricing for Part B; it will lower drug prices for patients on some of most expensive drugs. It’s a good step. But rather than have other nations bargain Part B prices for us, I wish we did it ourselves.”

CMS is currently taking comments on the IPI model until Monday, December 31, 2018, and will aim to issue a proposed rule next spring.

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