BIO submits comments on IRA’s Medicare Drug Price Negotiation Program

drug price negotiation

On Friday, April 14, the Biotechnology Innovation Organization (BIO) weighed in on initial guidance regarding the Drug Price Negotiation Program (Negotiation Program) under the Inflation Reduction Act of 2022 (IRA). When the IRA was passed, it was the Act’s Negotiation Program that had the biotech industry particularly worried.

“We are very concerned about the significant and negative impacts the IRA will have on companies’ investments in research and development,” BIO explains in their comments, “Which in turn will harm beneficiary access to future treatments and cures, particularly for rare, hard-to-treat diseases and those areas with high unmet need.”

As BIO’s Chief Policy Officer Deputy Counsel of Healthcare, John Murphy III, said in September 2022, “Getting this rolled out is going to be critical to ensuring there is a pathway for continued investment in novel innovative bio-therapeutic products.” BIO’s recent comments are a way for the industry to make good on its collaborative promise. 

In their letter, BIO outlines larger industry concerns saying, “We believe it’s imperative to underscore our views on the IRA,” continuing that, “We have long supported a Medicare Part D out-of-pocket cap and the ability for patients to spread these costs throughout the year… At the same time, we believe that patient out-of-pocket costs will never be truly addressed unless the broken rebate system—which benefits pharmacy benefit managers (PBMs) over patients—is addressed.”

Walking back transparency

PBMs are not the only issues that were addressed by BIO in their letter regarding the Drug Price Negotiation Program. “We also note our strong disappointment that key aspects of this guidance have been issued as final without soliciting comment, which is a concerning step backward from CMS’s stated commitment to transparency.” 

Despite the Centers for Medicare & Medicaid Services’s (CMS) previous comments to “prioritize transparency and robust engagement” in its implementation of the Negotiation Program, as BIO’s letter notes, “the Agency solicits comment on only certain policies, and finalizes other policies with no opportunity for comment—specifically, the foundational policies set forth in Section 30 of the Initial Guidance,” thus delegitimizing their own stance.

BIO explains in their letter the fundamental disadvantage that the industry must work against as a result of the underlying structure of the negotiation program being legally flawed. “In review of the punishing penalties for non-compliance, and the general inflexibility of the process for product selection and maximum fair price (MFP) implementation, these legal flaws cannot be overcome through general guidance clarity at this stage.” 

BIO continues, “Nevertheless, we provide herein several suggestions for CMS to consider that might be helpful in the transparency objective of the Agency as it implements this program.  None of these resolve the more fundamental legal infirmities of the overall program, nor could they.”

BIO’s letter is comprehensive and dives deeply into the challenges that the Act’s Negotiation Program presents for 70 pages. As BIO explained, the organization “appreciates the steps the agency has taken to establish a dialogue with key stakeholders about the Negotiation Program and other elements of the IRA, but has significant concerns about the Initial Guidance and the limitations on comments CMS has imposed.” 

BIO will continue to advance its member priorities and engage with CMS to push for needed changes to the negotiation program.

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