NPC Submits Comments on Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses

January 25, 2019

The Honorable Seema Verma
Centers for Medicare & Medicaid Services
U.S. Department of Health and Human Services
200 Independence Ave., SW
Washington, DC 20201

Submitted electronically via

RE: Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses (CMS-4180-P)

Dear Administrator Verma,

The National Pharmaceutical Council (NPC) appreciates the opportunity to submit comments regarding the Centers for Medicare and Medicaid Services (CMS) notice of proposed rulemaking, Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses.

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. NPC is supported by the major U.S. research-based biopharmaceutical companies. We focus on research development, information dissemination, education and communication of the critical issues of evidence, innovation and the value of medicines for patients. Our research helps inform important health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible.

NPC supports the agency’s ongoing interest to develop Medicare Advantage products which better meet individual beneficiary’s health care needs and reduce individual out-of-pocket spending. However, these goals require sound evidence and strategies that reflect patient-centered principles. As the agency considers new regulatory frameworks, it is imperative that these policies focus on the clinical benefits and harms rather than relying on blunt policy instruments focused on costs. In our comments below, we highlight the critical need to consider patient heterogeneity when making clinical and coverage determinations and identify how the utilization management strategies outlined in the proposed rule may restrict patient access to necessary medications and harm patient wellbeing.

As a research organization, our comments focus specifically on elements related to providing plan flexibility to manage protected classes and the use of step therapy for Part B Drugs in the Medicare Advantage program. Our comments do not extend to topics otherwise covered in this proposed rule. 

Providing Plan Flexibility to Manage Protected Classes

The proposed rule would allow greater “plan flexibility” to apply limits to the six protected classes of drugs in Medicare Part D. Broadly, the rule proposes three exceptions to the protected class policy: (1) implementing broader use of prior authorization and step therapy for protected class drugs for both new starts and existing therapies, (2) excluding a protected class drug from formulary if it is a new formulation of an existing single-source drug or biological product, and (3) excluding a protected class drug from a formulary if the wholesale acquisition cost (WAC) of the drug increases beyond inflation. However, these exceptions focus on costs without careful consideration of the clinical benefits or harms.

Utilization management strategies assume one size fits most patients

Similar to our March 7, 2014[1] and November 20, 2017[2] comments to CMS, NPC strongly recommends preserving existing patient access protections in market-based insurance products, most notably the six protected classes. The original protected class policy was created by CMS in 2005 and codified by Congress in 2008. As outlined, these proposals could have serious implications for patients. When delivering health care, it is easier to consider the needs of large populations or provide treatment options based on how “average” patients fare. However, research shows that patients often respond in different ways to the same treatment, which is one of the reasons that the protected class policy was initially instituted. A treatment that is best for most patients may not be the one that is right for an individual. Some patients may experience uncomfortable or adverse side effects that another patient does not. Most important, one patient may have their condition successfully treated while another patient experiences no benefit or even harm from the exact same treatment. Previous NPC research has demonstrated variations in treatment responses in certain subpopulations. These subpopulations include racial and ethnic groups as well as the elderly, a key subpopulation among Medicare beneficiaries.[3],[4]

Health care coverage and benefit design focused on “average” treatment response may restrict patient access to the treatment option most effective for him or her. NPC and other organizations have conducted extensive research examining heterogeneity of treatment effect (HTE) and the policy implications of a one-size-fits-all approach to clinical and formulary decision-making. For example, an analysis of a comparative effectiveness research trial for antipsychotic drugs, one of the six protected classes, in the Medicaid program found that restrictive reimbursement for “losing” drugs would increase overall costs by $1.3 billion and worsen conditions for mental health patients.[5],[6] Similarly, an analysis that simulated possible HIV formulary scenarios found that less restrictive formulary designs led to better patient outcomes and reduced costs for patients.[7] Quality in health care delivery, measured by patient outcomes, cannot be achieved unless we acknowledge individual treatment effects and provide access to care for patients accordingly.

Policies should consider when patient heterogeneity is most critical

To achieve better health outcomes for both the individual patient and the larger population, heterogeneity or individual treatment effects must be well understood and reflected in patient access to therapeutic options. NPC and our partners have developed resources on the problems of a one-size-fits-all approach as well as resources on how decision makers can make informed choices. These resources include:

  • The Good, the Bad, and the Different: A Primer on Aspects of Heterogeneity of Treatment Effects”: This article, published in the Journal of Managed Care Pharmacy, provides tools and resources that can help when considering the variation among patients, subpopulations of patients, and clinical studies when making coverage and reimbursement decisions at the population level.[8]
  • Individual Treatment Effects: Implications for Research, Clinical Practice, and Policy”: This article, published in the American Journal of Managed Care, suggests a framework for understanding individual treatment effects and its impact in addition to providing recommendations for researchers, providers, and payors considering comparative effectiveness research and its implications on their work.[9] In the framework, four factors were identified that indicate when it may be inappropriate to narrow treatment choices through restrictive or logistical hurdles. The factors include when:
    1. Consequences of treatment choice are high: There are more significant consequences associated with delaying the optimal treatment choices for some conditions than others. For example, a person suffering from hay fever may try several successive treatments before finding the right one, with no long-term impact, while a person facing acute organ failure may not have the luxury of time or the disease may progress irreversibly while other alternatives are tried.
    2. Patient diversity exists: Patients with the same disease often vary in the symptoms they experience. For example, some patients with depression may have sadness, insomnia, or lack of interest in daily activities, whereas others may also have anxiety and agitation. Among patients enrolled in the Medicare Advantage program, patient diversity may be based on race, age, disease severity, comorbidities, access to care, and other sociodemographic characteristics.
    3. Treatment response is independent of other treatments: The similarity between a patient’s likely responses to the available treatments for a condition (level of “treatment independence”) may vary. Some patients may be very likely to have consistent responses to other treatments, but in other conditions, such as depression, their response may vary even when treatments belong to the same or different classes of medicines.
    4. Patient preferences vary: Dosing, tolerance of particular side effects, willingness to make necessary behavioral changes and other physical and lifestyle factors all can impact the suitability of a particular treatment regimen for an individual patient.
  • Pharmacy benefits: Super-sized, minimized or right-sized?”: This article, published in Employee Benefit News, outlines a framework for the consideration of treatment flexibility in benefit design. The framework, derived from interviews and focus groups, was designed to help employers and health plans determine when benefit designs for particular conditions are “super-sized,” “minimized” or “right-sized.” A similar framework could be applicable for other utilization management criteria.[10]

While these considerations are applicable across a variety of clinical conditions and classes, the considerations are particularly relevant for clinical conditions associated with antidepressants, antipsychotics, anticonvulsants, immunosuppressants for the treatment of transplant rejection, antiretrovirals, and antineoplastics. 

Medicare Advantage and Step Therapy for Part B

After first sending out a memo to plans in August 2018, CMS is now proposing how Medicare Advantage plans could implement step therapy protocols for covered Part B medications. These proposals include only allowing step therapy to be applied to new prescriptions or administrations and using a 108-day lookback period, similar to Medicare Part D, when determining whether a prescription is “new.” In addition, CMS is proposing that a Pharmacy & Therapeutics (P&T) committee must play a role in determining the policies for a step therapy protocol and that the agency will use the current annual review and approval processes it conducts to review step therapy usage.

Step-therapy protocols should consider clinical rather than cost considerations

Step-therapy protocols were initially developed to encourage the use of preferred agents with improved efficacy and fewer safety concerns. However, over time, these protocols have often had a greater focus on cost rather than clinical criteria. Findings on the use of step therapy in commercial health plans can provide insight into the utilization and design of these protocols should they become part of Medicare Advantage plans. An NPC analysis of the data available in the Tufts Medical Center Specialty Drug Evidence and Coverage (SPEC) database showed wide variation in the frequency with which plans apply step therapy in specialty drug coverage decisions. Utilization of step therapy ranged from 2 percent to 49 percent across the plans included in the SPEC database, [11],[12] which obtains information from publicly available coverage decisions issued by 17 of the largest 20 commercial health plans for their commercial lines of business. Even within the plans that utilize step therapy, the set-up of the protocols varies greatly, with some protocols being more onerous and burdensome than others. In the SPEC database analysis, of the just over 1,200 coverage decisions that included step therapy, 63 percent required beneficiaries to step through a single therapy while 37 percent required multiple therapies. Fifteen percent of the total coverage decisions included three or more steps and some protocols even required patients to fail on up to five treatments before they could access a specified therapy. Depending on the clinical conditions utilized in a step therapy program, a beneficiary could face irreversible harm or a delay in treatment use. The more restrictive a step therapy program is, the more problematic and burdensome it can be for an elderly patient or a patient with a disability.

Medicare covers both the elderly and patients with disabilities, meaning beneficiaries tend to be older, in poorer health, have more comorbidities, and take multiple medications. Logistical burdens could arise with step therapy protocols, such as additional lab tests and more doctor visits. These challenges can be more burdensome in the aged and disabled population of the Medicare program, especially those patients with severe conditions, limited mobility, and/or limited transportation options. For example, beneficiaries with metastatic cancer facing limited survival time may see a delay in therapy as they face the administrative and logistical hurdles of a step therapy protocol. Additionally, beneficiaries may struggle to navigate the Medicare system or the appeals process. Again, delays in treatment could occur, further exposing these patients to harm.

When considering implementation of step therapy protocols, policies should be guided by strong, patient-centered principles

While CMS has recently proposed these changes for step therapy in Part B drugs under Medicare Advantage plans, several provider societies and coalitions, along with states, have been developing principles and legislation to improve the development and administration of step therapy policies. These efforts emphasize prioritizing clinical benefits and risks over costs.

In a systematic review of these principles, we found agreement across key components of step therapy implementation to ensure patient-centered principles. [13],[14],[15],[16] First, coverage decisions must be equitable and non-discriminatory. The needs of Medicare beneficiaries who face unique circumstances, such as life-threatening conditions, rapidly deteriorating conditions, multiple comorbidities, concomitant prescriptions, and limited generic availability, must be taken into account as step therapy protocols are designed. In addition, the time to failure on any step in the protocol should prevent long-term harm by providing flexibility. Providers must be able to present documentation in support of limiting a step and the protocol should account for Medicare’s unique patient population by varying the time limit for each step as specified in clinical criteria documentation. Any communication between patients, physicians, and a health plan, including any request of protocol details, tracking of patient progress, and physician submission of appeals requests, should be done through a clear, accessible electronic process. Similarly, a clear and accessible electronic process should be utilized for the plan’s appeals process. This includes granting request for exceptions when the appropriate clinical documentation is presented; deciding on appeal requests within a limited number of hours of receiving the request; providing clinical justification, alternative medication options, and a process for external review should the appeal be denied; and including appeals statistics on the website of the health plan. 

These principles should inform how step therapy protocols are designed so that the unique needs of the Medicare population are addressed both in the clinical criteria used and in the interactions between beneficiaries, health care providers, and the health plan itself. NPC encourages the use of patient-centered principles that will ensure beneficiaries receive the right care for their needs. Protocols should remain consistent with sound clinical practice guidelines while respecting the experience and judgment of health care providers. In an era when others are providing additional guidance for step therapy and prior authorization, careful consideration of policies that promote the same patient-centered and evidence-based drug utilization is needed.[17]

Pharmacy and Therapeutics committees should incorporate beneficiary perspectives

We appreciate the consideration of CMS to require the use of a Pharmacy and Therapeutics (P&T) committee to review and approve step therapy policies and procedures. Requiring the majority of the P&T committee members to be practicing physicians and practicing pharmacists is consistent with the Part D requirements for a P&T committee. However, in an era of patient-centered research, consumer-directed health insurance, and other federal and private sector initiatives which actively engage with patients to deliver more appropriate care, the patient or representative beneficiary perspective should also be incorporated.

Outside the United States, health technology assessment (HTA) processes have begun seeking patient and public input to guide resource allocation and coverage decisions. [18],[19],[20] For instance, the National Institute for Health and Care Excellence (NICE) in the United Kingdom receives input from a panel of 30 members of the public on a range of moral and ethical issues when producing guidance documents. Alternatively, to address questions regarding the patient and caregiver experience, the Scottish Medicines Consortium invites comments from registered patient groups, local support groups, and volunteer organizations after the announcement of a drug appraisal.[21]

While the context of a centralized HTA system in a single payer system would not be appropriate for the US market-based health system such as the Medicare Advantage program, these processes can guide thinking about how to incorporate patient and public input when determining resource allocation and coverage policies. Similar input from patients and consumers to guide beneficiary access to medications in the United States, however, is less common. In a review of standard operating procedures for developing medical policy among 17 of the largest commercial health plans, 15 actively seek specialty provider society or network input. Yet, no health plans offered the same opportunity to seek patient or beneficiary input.[22] The inclusion of patient-beneficiary input in the P&T process would ensure that elements of greatest importance to beneficiaries remain central to health care decision-making and out-of-pocket spending for beneficiaries.


The National Pharmaceutical Council shares CMS’ goal to provide patients and health care providers with safe and effective therapies that will best serve the needs of patients and the health care system. Meeting that goal will require strategies based on sound evidence and strategies that reflect patient-centered principles which include clinically nuanced approaches to care, rather than blunt policy solutions. Thank you for the opportunity to provide these comments. We would be pleased to meet with you to expand upon our comments, share our research, and continue this important discussion.


Robert W. Dubois, MD, PhD
Chief Science Officer


[1] National Pharmaceutical Council. “NPC Comments on CMS‘ Proposed Changes to Protected Classes.” March 7, 2014. Available at

[2] National Pharmaceutical Council. “NPC Submits Comments on CMS Request for Information on New Direction for Innovation Center.” November 20, 2017. Available at

[3] Wertheimer, A. (2002). Pharmaceuticals for Elders: Why Innovation Matters. Healthcare and Aging. 9(1).

[4] Burroughs, V.J., Maxey, R. W., and Levy, R.A. (2002). Racial and Ethnic Differences in Response to Medicines: Towards Individualized Pharmaceutical Treatment. Journal of the National Medical Association. 94 (10 Suppl), 1-26. Available at

[5] The Manhattan Institute for Policy Research. (2011). Blue Pill or Red Pill: The Limits of Comparative Effectiveness Research. New York: Philipson T.J. and Sun, E. Available at

[6] Basu, A., Jena, A.B., and Philipson, T.J. (2011). The impact of comparative effectiveness research on health and health care spending. Journal of Health Economics. 30(4), 695-706. Available at:

[7] Baumgardner, A., Huber, C., Kabiri, M., Yoon, L., Chou, J., et al. (2018). Modeling the Impacts of Restrictive Formularies on Patients with HIV. American Journal of Managed Care. 24(Spec Issue No. 8), SP322-SP328.

[8] Malone, D.C., Hines, L.E., and Graff, J.S. (2014). The Good, the Bad, and the Different: A Primer on Heterogeneity of Treatment Effects. Journal of Managed Care Pharmacy. 20(6), 555-563. Available at:

[9] Graff, J.S., Grasela, T., Meltzer, D.O., and Dubois, R.W. (2014). Individual Treatment Effects: Implications for Research, Clinical Practice and Policy. American Journal of Managed Care. 20(7), 544-551. Available at:

[10] Graff, J. Pharmacy benefits: Super-sized, minimized or right-sized? Employee Benefit News. December 22, 2016. Available at:

[11] Chambers, J., Kim, D., Pope, E., Graff, J., Wilkinson, C., and Neumann, P. (2018). Specialty Drug Coverage Varies Across Commercial Health Plans in the US. Health Affairs, 37(7), 1041-1047. Available at:

[12] Chambers, J., Panzer, A., and Neumann, P. (2018). Variation in the Use of Step Therapy Protocols Across US Health Plans. Health Affairs Blog. Available at:

[13] Hoffman, S. (2018). "Step Therapy: Legal and Ethical Implications of a Cost-Cutting Measure". Faculty Publications. 2009. Available at:

[14] American Medical Association. (2017). Prior Authorization and Utilization Management Reform Principles, available at

[15] American Society of Clinical Oncology. (2017). American Society of Clinical Oncology Statement on the Impact of Utilization Management Policies for Cancer Drug Therapies. Journal of Oncology Practice. 2017. 13(11): 758-762. Available at:

[16] Consensus Statement on Improving the Prior Authorization Process. (2018). Available at:

[17] National Pharmaceutical Council. Adherence to Generally Agreed Upon Principles for Step Therapy Policies. Research underway.

[18] Whitty JA. (2013). An International Survey of the Public Engagement Practices of Health Technology Assessment Organizations. Value in Health. 2013;16:155-163.

[19] Rosenber-Yunger ZRS, Bayoumi AM. (2017). Evaluation Criteria of Patient and Public Involvement in Resource Allocation Decisions: A Literature Review and Qualitative Study. International Journal of Technology Assessment in Health Care. 2017: 33(2):270-278.