CMS must address Part D plan abuse of IRA provisions designed to protect patient access

The Biotechnology Innovation Organization (BIO) has once again requested that the Centers for Medicare & Medicaid Services (CMS) take steps to protect patient access, asking the agency to address concerns over Medicare Part D plan policies aimed at medicines developed and marketed by small biotech companies.

This builds on BIO’s ongoing advocacy to CMS focused on ensuring that the agency fulfills its duty to protect patient access to all needed therapies under the Inflation Reduction Act (IRA).

Why does this matter? Many IRA-related changes are happening to the Part D benefit beginning in 2025. This includes a new Part D discount program where manufacturers must pay a portion of Part D costs: 10% before the catastrophic threshold of $2,000 and 20% after it.

• Because these changes will be hard for smaller biopharmaceutical companies to absorb all at once, the law included phase-in provisions, including a phase-in of this 10%/20% contribution over seven years. When a company qualifies for the phase-in, plans must pay the difference between the phased-in amount and the full rebate.
• Congress intended to protect small biotech companies with this provision, as well as patient access to these medicines.

Yet there are now instances where Part D plans have asked small manufacturers – those who the law was explicitly designed to protect – to pay Part D plans an increased rebate.  This is to account for the fact that plans must bear phase-in costs or else be subject to burdensome utilization management, such as step therapy, or even non-coverage.

• As a result, in addition to a request that CMS increase its overall oversight of Part D plan formulary rules, BIO is specifically asking CMS to scrutinize access restrictions that Part D plans may be placing on medicines made by small manufacturers who qualify for the rebate phase-in, urging the agency “to be transparent in how it has updated its formulary review processes given these changes and the specific steps the agency has taken for 2025 to protect beneficiary access to all needed therapies.”
• Some elements of the phase-in are designed to assist in access for those receiving low-income subsidies, making the action of the Part D plans dangerous not only for our most innovative companies, but also for our most vulnerable patients.
• BIO will continue to push the agency to do the right thing in the interest of patients and ensure that PBM/Part D plan shenanigans are stopped.