CMS NEWS
FOR
IMMEDIATE RELEASE
May 16, 2019
Contact:
CMS Media Relations
(202) 690-6145 | CMS Media Inquiries
CMS Takes Action to Lower Prescription
Drug Prices and Increase Transparency
Final rule modernizes the Medicare Advantage & Medicare
Part D programs
Today,
the Trump Administration finalized improvements to Medicare Advantage and
Medicare Part D, which provide seniors with medical and prescription drug
coverage through competing private insurance plans. These changes will
ensure that patients have greater transparency into the cost of
prescription drugs, so patients can compare options and demand value from
pharmaceutical companies.
“The
improvements we are making to Medicare Advantage and Medicare Part D
deliver on the promises in the President’s blueprint to provide more
negotiating tools and more transparency for patients,” said HHS Secretary
Alex Azar. “They are significant steps toward a Medicare program, a drug
pricing marketplace, and a healthcare system where the patient is at the
center and in control.”
“Under
President Trump’s leadership, CMS is delivering on price transparency,
because patients have a right to know the cost of their healthcare
services before they receive them,” said CMS Administrator Seema Verma.
“Today’s rule requires Part D plans to adopt tools that provide
clinicians with information that they can discuss with patients on out-of-pocket
costs for prescription drugs at the time a prescription is written. By
empowering patients with information on the cost of their prescription
drugs, today’s rule will ensure that pharmaceutical companies have to
compete on the basis of price. This effort builds on new requirements for
hospitals to disclose chargemaster prices and other agency initiatives to
promote price transparency.”
After
an implementation period, Part D plans will be required to provide access
to such a tool that is integrated into clinicians’ electronic prescribing
or electronic health records (EHR) systems. CMS is encouraged that some
plans are already offering these tools, but today’s policy will require
all plans to provide clinicians with access to price information for different
prescription drugs. Getting more information on out-of-pocket costs for
prescription drugs to patients and their clinicians early in the process
is critical, as there should be no surprises at the pharmacy counter.
To
further promote transparency, after an implementation period today’s rule
will also require the Explanation of Benefits document that Part D
enrollees receive each month to include information on drug price
increases and lower-cost therapeutic alternatives. As a result of these
changes, patients and their clinicians will be able to better understand
the cost of prescription drugs and seek out high-value options, helping
to increase patient adherence and improving health outcomes.
CMS
is also codifying a policy that enables beneficiaries to select a
Medicare Advantage plan that negotiates prices for physician-administered
medicines when beneficiaries are first starting on the medicines. By
strengthening a plan’s ability to negotiate with prescription drug
companies, this policy will ensure that plans can better deliver value
for a patient’s medical needs. Many physician-administered medicines are
biologics, which are some of the most expensive therapies in use today.
Lower-cost biosimilars are coming to market to compete with biologics, and
this policy is part of the Trump Administration’s broader strategy to
foster innovation in biosimilars in order to drive competition in the
market for physician-administered drugs.
In
addition, today’s rule implements in Part D legislation signed by President
Trump to prohibit “gag clauses,” which keep pharmacists from telling
patients about lower-cost ways to obtain prescription drugs. These
efforts to promote transparency on the price of prescription drugs
complement a series of other changes towards this important goal,
including a final rule issued by CMS last week to require pharmaceutical
companies to disclose the list price of prescription drugs in
direct-to-consumer television advertisements.
In
the proposed rule, CMS announced that the agency was considering a policy
to ensure that beneficiaries pay the lowest cost for the prescription
drugs they pick up at a pharmacy, after taking into account back-end
payments from pharmacies to plans. Although CMS is not implementing this
policy for 2020, the agency appreciates the over 4,000 comments that were
received on this issue. CMS is continuing to carefully review these
comments as we continue to consider policies that would lower
prescription drug costs, address challenges that independent pharmacies
face, and improve the quality of pharmacy care.
Also
in the proposed rule, CMS proposed facilitating negotiations for
discounts for drugs in Part D’s “protected” therapeutic classes. The
agency appreciates the feedback received on this issue and has chosen not
to finalize the proposed changes to its protected classes policy at this
time, but rather is codifying existing policy. However, the
administration remains concerned that prescription drug companies are
offering seniors in Medicare substantially smaller discounts for
protected class drugs than are offered in the commercial market. Seniors
in Medicare are paying more than commercially insured beneficiaries, and
CMS will continue to execute on President Trump’s Blueprint to lower
prescription drug prices and address this problem.
For a
fact sheet on the final rule, please visit: https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-and-part-d-drug-pricing-final-rule-cms-4180-f.
The
final rule (CMS-4180-F) can be downloaded from the Federal Register at: https://www.federalregister.gov/documents/2019/05/23/2019-10521/modernizing-part-d-and-medicare-advantage-to-lower-drug-prices-and-reduce-out-of-pocket-expenses.
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