CMS listens to BIO and understands proposed policies could have harmed patients, innovation

A new suite of rules governing drug rebates in Medicaid has been finalized, removing months of uncertainty about whether the Centers for Medicare and Medicaid Services (CMS) would move forward with proposals that would increase uncertainty, devalue innovation, and hamper patient access.

The final rule for “Medicaid Program: Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (MDRP)” was published on Sept. 20, more than a year after a proposed version of the rule was released.

The Biotechnology Innovation Organization (BIO) provided feedback to CMS and other agencies throughout the process. That feedback included an evidence-driven comment letter to the agency; bipartisan, bicameral engagement with lawmakers that highlighted policies go give states flexibility while protecting innovation; and education of advocacy groups and providers about how elements of the proposed rule could create unpredictability and access challenges.

The final version excluded  several provisions that would have harmed  the patients-first innovation ecosystem, including:

• CMS decided to abandon a controversial proposal that would have “stacked” different rebates that drug manufacturers offer on medicines, artificially driving prices down and threatening the viability of the Medicaid market. CMS said in May that they would not move forward with the stacking proposal, and the final rule makes that decision official.
• CMS will not move ahead with its initial plans to send a survey to the manufacturers of certain drugs that would have asked for extensive details on the pricing of those drugs. Such information is not necessary for the operation of the MDRP, and collecting the data would have been burdensome and raise the possibility of CMS attacks on innovative products based solely on price.
• CMS elected not to define “vaccine,” declining to institute a definition of “vaccine” that would have had the potential to disrupt a system that offers broad access to a range of innovative vaccines.
• CMS aligned its policy on patient assistance programs with an earlier federal court decision. The final rule bars the use of patient assistance dollars, when retained by pharmacy benefit managers (PBMs) as a part of an accumulator program, from being used to lower the Medicaid best price. Such a move would have imperiled patient copay support.

However, while CMS narrowed the definition of “covered outpatient drug,” it still allows for some bundled drugs to be included, as long as certain requirements are met. This could compromise direct reimbursements that allow providers to be fully reimbursed for cutting-edge biotech treatments.