For Immediate Release: February 9, 2024
Contact: Michael Pratt, 202-827-2088, firstname.lastname@example.org
Washington, D.C. – A new research letter published in JAMA Health Forum found that current Medicare beneficiary access to many of the drugs selected for the first round of the Inflation Reduction Act’s (IRA’s) Medicare Drug Price Negotiation Program (DPNP) was high in 2019 and 2023, supporting concerns that the unintended consequences of the IRA may include harm to patient access. The publication from the National Pharmaceutical Council (NPC), “Medicare Part D Coverage of Drugs Selected for the Drug Price Negotiation Program,” was co-authored by NPC’s Julie Patterson, PharmD, PhD; Tyler Wagner, PharmD, PhD; John M. O’Brien, PharmD, MPH; and Jon D. Campbell, MS, PhD.
This research letter comes the week after the Centers for Medicare & Medicaid Services (CMS) sent initial offers to the manufacturers of the first ten prescription drugs selected for negotiation under the DPNP. The final price set by the government for the selected drugs will go into effect in 2026.
The research found that access to the ten drugs was often high without prior authorization or step therapy in 2019 and 2023. The increased utilization management requirements that are likely in response to Part D redesign could actually reduce patient access – exactly the opposite of what the program intends to do.
“Our research showed beneficiary access to the first ten selected drugs was high in 2019 and 2023: most of these drugs were on formularies without prior authorization or step therapy requirements,” said co-author Dr. O’Brien, NPC’s President and CEO. “This is important to note before the DPNP prices go into effect as the IRA creates strong perverse incentives for plans to maximize rebates by potentially using utilization management and adverse tiering for the drugs selected.”
“Steering patients towards nonselected therapeutic alternatives with higher rebates may help middlemen retain revenue after ‘Maximum Fair Prices’ (MFPs) go into effect for the selected drugs,” said co-author Dr. Campbell, NPC’s Chief Science Officer. “NPC has been warning that the effectuation of the MFP and Part D formulary coverage of selected drugs are built on a chassis ripe with perverse incentives.”
Current CMS guidance is strong when it comes to requiring Part D plans to include all dosage forms and strengths of selected Part D drugs on their formularies, but is murky when it comes to how Plan D sponsors make final utilization decisions.
NPC’s review of the Medicare formulary and pricing files for Part D plans for the first quarters of 2019 and 2023 supported these concerns, most notably highlighting that:
- There is considerable uncertainty around the review process in place to ensure meaningful access to patients once payers begin formulary coverage decision-making.
- Because of the lack of requirements, Plan D sponsors have freedom to apply utilization management tools like prior authorization and step therapy in a way that may benefit them more than it benefits patients. The final CMS guidance raised concerns that Part D sponsors may take advantage of the lack of tiering or utilization management guidelines to steer beneficiaries towards nonselected drugs that may offer higher rebates than selected drugs in the same class.
- The program might be breaking a system that does not necessarily need fixing. The IRA’s formulary inclusion requirement may improve access to selected drugs previously excluded from the plan (like insulin), but access concerns beyond formulary inclusion remain — including the potential for copays for selected drugs to increase if their formulary placement changes.
“Additional preventive measures — beyond the vague and uncertain ‘monitoring’ that CMS has mentioned — may be needed to protect patient access,” said corresponding author Dr. Patterson, NPC’s Senior Director of Research. “NPC will be watching closely to see if patients encounter increased barriers to treatments or higher copayments as a result of changes to access and utilization management practices in Part D.”
More on potential unintended consequences of the IRA DPNP from NPC:
- Unintended Consequences of the Inflation Reduction Act: Clinical Development Toward Subsequent Indications, The American Journal of Managed Care (February 2024)
- How The IRA Could Delay Pharmaceutical Launches, Reduce Indications, And Chill Evidence Generation, Health Affairs Forefront (November 2023)
About the National Pharmaceutical Council
The National Pharmaceutical Council (NPC) is a health policy research organization dedicated to the advancement of good evidence and science, and to fostering an environment in the United States that supports medical innovation. Founded in 1953 and supported by the nation's major research-based pharmaceutical companies, NPC focuses on research development, information dissemination and education on the critical issues of evidence, innovation and the value of medicines for patients. For more information, visit www.npcnow.org and follow NPC on LinkedIn.