Drug Pricing Plan Could Boost Step Therapy, Formulary Restrictions

APA is urging the Trump administration to include patient protections in its proposal for lowering prescription drug prices in Medicare Part D plans and Medicaid managed care organizations to avoid increased use of utilization management tools, such as step therapy, prior authorization, and formulary restrictions.

APA filed formal comments on the proposal last month with the Health and Human Services’ Office of Inspector General on behalf of its 38,500 members. The administration proposed the controversial plan aimed at lowering prescription drug prices in February (Psychiatric News, March 14, 2019).

If finalized, the rule would upend the current way drugs are priced by barring the practice of drugmakers’ giving rebates to certain health plans and their pharmacy benefit managers (PBMs) under contract with them.

“We support the administration’s efforts to enhance price transparency and lower out-of-pocket costs of medications,” wrote APA CEO and Medical Director Saul Levin, M.D., M.P.A., in formal comments submitted April 8. “However, we are concerned about unintended consequences that may result from the proposed rule, such as additional use of utilization management protocols.”

The concern is that if the proposal reduces profits for the plans or PBMs by doing away with the rebates, the plans may react by adopting additional utilization management practices, to the detriment of patients and physicians.

“As you move forward with this effort, we urge you to include protections to prohibit the use of additional utilization management tools (i.e., step therapy, prior authorization, and formulary restrictions). These tools increase provider burden while reducing patient access to critical, life-saving mental health and substance use disorder medications,” Levin wrote.

The proposed rule would impact the 44 million mostly senior citizens enrolled in Medicare Part D drug plans and the 65 million lower-income individuals enrolled in Medicaid managed care plans. The changes, however, could eventually trickle down to the rest of the health care marketplace.

Health care policy analysts have pointed out that the proposal would raise monthly premiums across the board by as much as 22% while providing uncertain benefits for many enrollees. Although the rule would allow drugmakers to start giving rebates to plan enrollees at the point of sale to lower their costs, there is nothing in the rule to compel drugmakers to do so. Since many medications would not be eligible for the rebates, including generic drugs or drugs for which there is no substitute, patients taking these drugs would not see lower costs.

Moreover, patients taking medications in the Part D “protected classes,” which include antipsychotics, antidepressants, and anticonvulsants, would not likely see reduced drug prices.

“A beneficiary using high-cost drugs in protected classes is less likely to benefit from a reduced pharmacy purchase price, because manufacturers generally offer low or no rebates to plans for these drugs, since drugs in protected classes must be included on Part D plan formularies,” according to the proposed rule. ■

APA’s letter can be read here. The proposed rule “Fraud and Abuse; Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees” can be accessed here.