December 17, 2015

Senators Press Administration On Efforts To Lower Prescription Drug Costs

WASHINGTON – Today U.S. Sens. Mark R. Warner (D-VA), Bill Nelson (D-FL), Jeanne Shaheen (D-NH), Heidi Heitkamp (D-ND), and Tim Kaine (D-VA) wrote to Centers for Medicare & Medicaid Services Acting Administrator Andrew Slavitt, seeking more information on the agency’s efforts to inform consumers and health care providers about prescription drug costs and maximize CMS’ existing authorities to contain cost.

“In 2014 alone, spending on prescription drugs rose by 12.2%.  Inevitably, these rising costs squeeze American household budgets as well as federal and state budgets, Medicare, Medicaid, and other public health care programs that use taxpayer dollars to pay for drugs,” the Senators wrote. “There are numerous reasons why patients and heath care payers are experiencing rising prescription drug costs, and the solutions are not simple.”

In today’s letter, the Senators asked CMS for more information on how the agency expects to use its existing authority to improve transparency on drug pricing and bring down drug costs. They pose a series of questions about the existing authority of CMS to halt rising drug prices, along with understanding how the Department as a whole can leverage information to better assess the effectiveness of treatments and provide better information to consumers about their options. Questions include:

  • How does CMS plan to leverage the authority of the Center for Medicare and Medicaid Innovation (CMMI) to examine the potential of alternative payment mechanisms, including examining methods to increase use of and access to competitive generic medications, and alternatives to the current ‘ASP+6%’ model?
  • A number of outside, independent organizations and researchers including the Patient Centered Outcomes Research Institute (PCORI) and the Institute for Clinical and Economic Review (ICER) are assessing the comparative effectiveness of various treatments. How can CMS use this information to improve beneficiary outcomes and lower program spending?
  • Within the individual private insurance market, an increasing number of consumers are enrolling in high-deductible plans. How does CMS plan to continue to use its regulatory authority to ensure consumer access to prescription drugs on the individual market?

The full text of the letter is below. 

December 17, 2015

Mr. Andrew Slavitt,
Acting Administrator Centers for Medicare & Medicaid Services 
Department of Health and Human Services 
200 Independence Avenue, SW
Washington, DC 20201

Dear Acting Administrator Slavitt:

We are writing to express our concern regarding rising prescription drug costs. In recent years, U.S. spending on prescription drugs has increased dramatically and is now growing at a rate faster than any other health care item or service. As our country focuses on advancing a health care system that delivers better care at lower costs for all Americans, high drug prices threaten the gains our country has made in this sector.

Our pharmaceutical system, while not perfect, rewards innovation and incents drug developers to take on scientific uncertainty, enabling us to cure diseases, improve patient quality of life, and avoid costlier medical treatments. Here in the United States Senate, we have consistently supported efforts to further public sector medical research and have worked to foster pharmaceutical innovation in the private sector. However, the choice between innovation and affordability is a false one. In 2014 alone, spending on prescription drugs rose by 12.2%. Inevitably, these rising costs squeeze American household budgets as well as federal and state budgets, Medicare, Medicaid, and other public health care programs that use taxpayer dollars to pay for drugs.

There are numerous reasons why patients and heath care payers are experiencing rising prescription drug costs, and the solutions are not simple. We commend the Department of Health and Human Services Forum on Pharmaceutical Innovation, Access, Affordability and Better Health, but urge CMS to engage and collaborate with industry, patient groups, providers, and other relevant stakeholders to chart a path to reducing drug costs moving forward. To that end, we are seeking answers to the following questions:

1.      What statutory authority, if any, does CMS have to limit the impact of rising prescription drug costs on consumers? Under what circumstances has CMS exercised this authority?

2.      How does CMS plan to leverage the authority of the Center for Medicare and Medicaid Innovation (CMMI) to examine the potential of alternative payment mechanisms, including examining methods to increase use of and access to competitive generic medications, and alternatives to the current ‘ASP+6%’ model?

3.      A number of outside, independent organizations and researchers including the Patient?Centered Outcomes Research Institute (PCORI) and the Institute for Clinical and Economic Review (ICER) are assessing the comparative effectiveness of various treatments. How can CMS use this information to improve beneficiary outcomes and lower program spending?

4.      Current Medicaid drug pricing and policy infrastructure was designed for a fee-for-service environment. How is CMS working with the states to ensure that coverage and costs remain reasonable for consumers, particularly as Medicaid moves towards a system of managed care?

5.      How does CMS plan to evaluate new ways to empower consumers and healthcare providers to make informed decisions about the cost of the prescription medications available to them?

6.      Within the individual private insurance market, an increasing number of consumers are enrolling in high-deductible plans. How does CMS plan to continue to use its regulatory authority to ensure consumer access to prescription drugs on the individual market?

7.      The federal exchange represents a way for the federal government to help consumers compare drug costs, as well as enable them to compare coverage among plans. CMS recently enabled to consumers to access a tool allowing them to compare drug coverage and cost-sharing within individual plans. How does CMS plan to engage stakeholders to ensure that this and other tools reduce out-of-pocket drug costs for plan enrollees?

As our healthcare system continues to foster innovation and move towards achieving the aims of better care, better health, and lower costs, we urge CMS to continue to ensure that consumers have access to affordable and consistent drug coverage.

Sincerely,

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