The Alliance for Safe Biologic Medicines (ASBM) in collaboration with the Generics and Biosimilars Initiative (GaBI) held a webinar on the 2022 Inflation Reduction Act (IRA), on 26 July 2023. An outline of this webinar, ‘Medicare drug price negotiations: impact on healthcare development and patient access to medicines’, was published in GaBI Journal [1].
As brief background, in the US, a Medicare drug price negotiation provision was introduced in the form of the 2022 IRA. The ‘negotiation’ authority is granted to the Centers for Medicare and Medicaid Services (CMS). This is designed to empower the US Secretary of Health and Human Services (HHS) and enable them to develop and implement methods and a process to negotiate a limited number of maximum fair prices (MFPs) for prescription drugs in the Medicare programme, directly with manufacturers. At present, under the new drug price negotiation programme, the US government has selected 10 Part D drugs for negotiation for initial price applicability in year 2026 [2]; and this will scale up to 20 Part B and Part D drugs by 2028 [3].
Together, ASBM and GaBI, held a webinar on the introduction of the IRA to discuss its implications on medicines innovation and impact on patient access to medicines. Six expert speakers, including a pharmacist, a patient advocate, a drug developer, a policy expert, an industry expert from Europe and the US, presented at the webinar.
The expert speaker presentations were followed by a Q&A with the panel, and the audience also had the opportunity to ask questions online throughout the webinar.
The expert speaker presentations examined how the Medicare drug price negotiation provision in the IRA can be considered a type of price-setting policy, similar to the European-style price control policies applied to medicines. In addition, the threat that government price setting poses regarding innovation and access to medicines for patients was discussed. Experiences with cost containment efforts in different countries and their impact on patient care and innovation were a key focus.
The webinar provided important insight on key elements of the IRA’s Medicare drug price negotiation provisions, and the concerns surrounding their modification of successful, market-based models for delivering prescription medicines via a medical benefit (Medicare Part B) and pharmacy benefit involving competing prescription drug plans (Medicare Part D) that are strongly supported by beneficiaries.
Several flaws with the IRA’s drug pricing provisions emerged, both in the construct of the statute and the approach CMS has taken to implementing it via sub-regulatory guidance. These highlight that the programme is actually a form of government price setting, not negotiation. It also highlighted several issues that are not found in European systems. Concerns were raised with regards to the impact on progress and patient access to treatments. These include extreme penalties for manufacturers failing to agree to negotiate, a basic lack of clarity and predictability in evidence standards and decision-making by CMS, lack of an open and transparent process by which patients and physicians can provide meaningful input, and a prohibition against appeals and judicial review.
It was concluded that the statute will have several damaging effects. These are likely to be felt most acutely among US patients with cancer, chronic conditions like diabetes, cardiovascular disease, and immune-related conditions, and rare disease patients who are relying on current and future advances in small molecule medicines.
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References
1. Reilly SM, et al. Medicare drug price negotiations: impact on healthcare development and patient access to medicines. Generics and Biosimilars Initiative Journal (GaBI Journal). 2023;12(3):95-105. doi:10.5639/gabij.2023.1203.015
2. GaBI Online – Generics and Biosimilars Initiative. First drugs for Medicare price negotiation selected [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2024 Jun 25]. Available from: www.gabionline.net/policies-legislation/first-drugs-for-medicare-price-negotiation-selected
3. CMS.gov. Inflation reduction act and Medicare drug price negotiation [homepage on the Internet]. [cited 2024 Jun 25]. Available from: https://www.cms.gov/inflation-reduction-act-and-medicare/medicare-drug-price-negotiation
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