Cancer Groups Object to Medicare Proposals to Cut Part B
- FLASCO
- July 20, 2018
- News
Cancer Groups Object to Medicare Proposals to Cut Part B
Source: Medscape – Kerry Dooley Young – July 19, 2018
Oncology groups are opposed to some of the proposals currently under consideration in the United States that are aimed at
reducing the high cost of drugs.
In recent years, a flood of new cancer drugs has been approved, and all of them have had high price tags. Many are among
the most expensive drugs on the market.
The White House in May put forward a sweeping report, which it called a blueprint, on an array of options for controlling rising
drug prices. These included proposals for long-term legislative fixes and ambitious major policy changes. Among these was a
suggestion for a vendor-run competitive acquisition program for drugs covered by Part B. On July 12, Medicare unveiled a
proposal to cut initial Part B reimbursement for drugs administered by physicians.
Yet, there could be a more immediate impact on drug costs from the tweak proposed in the 2019 Medicare physician fee
schedule. The Centers for Medicare & Medicaid Services (CMS) faces a November 1, 2018, deadline for updating this rule.
Through it, CMS is seeking to drop payment for newly introduced drugs to a stated 3% premium to the wholesale acquisition
cost (WAC) from the current 6%. (Federal budget-sequester law has shaved Part B drug payments in recent years.) The
change could take effect by January 1, 2019.
Groups that represent cancer specialists have weighed in with initial statements opposing the plan.
“The proposal would trigger major cuts to physician reimbursement for Part B drugs that have been newly introduced to the
market and make an already turbulent cancer care delivery system even more unstable,” the American Society of Clinical
Oncology said in a statement.
“Additionally, the cuts could hinder patient access to newer, innovative therapies — potentially stalling progress against
cancer and almost certainly making it more difficult for oncologists to provide essential services to patients with cancer,”
ASCO said.
The Community Oncology Alliance (COA), a nonprofit organization that represents more than 5000 community-based
oncologists, has objected to the proposals. In June 2018, the COA filed a lawsuit to stop the US Department of Health and
Human Services and the White House Office of Management and Budget from using sequestration to cut reimbursement for
Medicare Part B drugs.
In a statement released on July 13, the COA said that it finds the proposals in the 2019 Medicare Physician Fee Schedule to
be “puzzling.”
Factoring in the budget sequester, the CMS proposal would drop reimbursement for new cancer drugs to a premium of about
1.35% to WAC for the first 6 months the drug is on the market, it said. (The sequester has dropped the current slated
payment of WAC plus 6% to about 4.3%.)
Ted Okon, executive director of COA, said in a statement that the CMS Part B proposal may backfire. Manufacturers might
increase WAC list prices “so that their new products will not be at a competitive disadvantage to existing products which are
reimbursed at the ASP [average sales price] plus 6%,” he said.
COA also objects to a CMS proposal in the draft physician fee schedule to overhaul billing for evaluation and management
services. Okon described this as a “scheme to pay a physician the same amount for evaluating a case of sniffles and a
complex brain cancer” that “simply defies all logic.”
“It is the antithesis of value-based healthcare and cheapens the medical care seniors are entitled to under Medicare,” Okon
said.
COA, ASCO, and other groups almost certainly will offer more detailed objections to the Part B plan during the comment
period on the CMS draft rule, which ends September 10, 2018. The American College of Rheumatology already has
expressed concerns with the Part B drug proposal in the draft rule.
In offering comments on Trump’s drug-pricing blueprint, the American Medical Association touched on this approach to
cutting reimbursement. In a July 16 letter to the Department of Health and Human Services, the AMA said this approach
might be “reasonable” when drugs are new to market and no ASP data are available, but the AMA raised reservations.
“The size of the reduction should be evidence-based, and we are not sure that an analysis of the data would justify a
reduction” at the level CMS proposes, wrote James L. Madara, MD, chief executive of AMA. “The data will have to be
carefully analyzed.””
In the draft rule, CMS appears to anticipate opposition and spells out its case for the change for Part B payment.
WAC prices do not include discounts and typically exceed the ASP level, the agency said. It also cited a supportive
Medicare Payment Advisory Commission’s June 2017 recommendations. The commission’s work is closely followed by
lawmakers, to whom medical groups may appeal to try to block CMS’ bid to cut the Part B premium for newly introduced
drugs.
CMS defends its plan as a bid to control costs for both Medicare and the people covered by the program.
Medicare’s Part B drug spending rose from $17.6 billion to $28.0 billion from 2011 to 2016. CMS notes that there are a
“growing number of drugs with high annual spending and high launch prices where single doses can cost tens or even
hundreds of thousands of dollars.” As a result, senior citizens are facing higher out-of-pocket costs for new medicines, CMS
said.
CMS does not cite any specific products in the draft rule’s discussion of the Part B WAC premium change, but a new
Novartis drug fueled debate about pharmaceutical prices last year. Its tisagenlecleucel-T (Kymriah, Novartis) drug hit the US
market with a $475,000 price tag.
“A 3 percentage point reduction in the total payment allowance will reduce a patient’s 20 percent Medicare Part B copayment
— for a drug that costs many thousands of dollars per dose, this can result in significant savings to an individual,” CMS said.
