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Easy as B to D?

Last month the American College of Rheumatology (ACR) and eight other physician groups wrote to the U.S. Secretary of Health and Human Services, Alex Michael Azar, to voice concerns over some of the proposals set out in the President’s 2019 Budget and the Reforming Biopharmaceutical Pricing at Home and Abroad Council of Economic Advisers' drug plan (1). In particular, we believe that if the Trump Administration moved Part B drugs into the Part D system as proposed, patients could face additional delays and cost barriers.

Patients encounter significant barriers to obtaining Medicare Part D (generally self-administered) biologics and other drugs for rheumatic diseases. Many factors are involved, including delays due to prior authorization and step therapy, high copayment costs, and the coverage gap or “donut hole” – a temporary limit on what drugs the plan will cover. By contrast, the therapies that patients receive through Part B (in the office or hospital) are generally approved quickly without those utilization management tactics, and out-of-pocket costs can be mitigated by patients’ secondary insurance. As a result, patients currently have much better access to Part B drugs.

The proposal to move medicine coverage from Part B to Part D could also block access to the treatment supply. The proposal has not been fleshed out in detail, but if reimbursement for Part B drug administration were to be reduced because of fee-sharing between doctors and the Part D management companies, it would likely reduce reimbursements going to independent outpatient infusion centers. This, in turn, could threaten those centers’ financial viability – especially small practices in rural and underserved areas of the U.S. that operate on thin margins – and therefore push patients to travel to hospitals that charge higher fees. If hospital services are not covered, patients could possibly lose access to treatment altogether.

Many physicians prescribe biologics as part of medically-necessary patient care in rheumatology, oncology, gastroenterology, dermatology and neurology, among other specialties. For our patients who require biologics, there are usually no other equally effective less expensive treatment options available. Unfortunately, these are high-cost drugs, so we are particularly concerned about patients being able to afford them.

Another Trump Administration proposal – changing Part D plan formulary standards to require a minimum of one drug per category or class rather than two – would also lead to access issues for patients on high-cost biologics. Medicare Part B therapy options for the treatment of conditions like rheumatoid arthritis and multiple sclerosis are already extremely limited – with only a handful of options covered in each disease category – and all are similarly priced. Giving health plans the flexibility to negotiate stricter drug formularies with manufacturers, so that patients only have access to one drug per class – for example, one TNF inhibitor, or worse, only one biologic drug – would reduce the number of biologic medicines that are covered under Part D.

Opportunities for progress

The ACR has outlined several policy changes the Trump Administration has the opportunity to make that would increase patients’ access to treatments. These include:

  • Implement clear processes for requesting and receiving exceptions to step therapy requirements, also known as “fail first” policies, whereby insurers require patients to try and fail lower-cost therapies before progressing to more costly therapies.  Particularly in rheumatology patients where joint and/or organ damage may be irreversible, early diagnosis and expedient treatment is a necessity. These fail-first practices delay our patients’ access to critical treatments by requiring them to undergo procedures and therapy options we know won’t work for them before they are able to access the treatments they need (1).
  • Reform prior authorization policies that create therapy delays for patients. Prior authorization plans establish a preferred drugs list (PDL) and require authorization before covering drugs not on the PDL. Such programs are designed to reduce costs by steering utilization toward lower-cost medications. But according to a 2016 AMA survey of 1,000 practicing physicians, a medical practice completes an average of 37 prior authorization (PA) requirements weekly per physician, taking a physician and their staff an average of 16 hours, or the equivalent of two business days, to process. We believe this is a waste of valuable resources that results in delays in care. Several organizations representing physicians, hospitals, pharmacists, medical groups, and patients, including the ACR, have endorsed 21 prior authorization and utilization management reform principles (2) that are intended to serve as best practices and reasonable reforms for utilization management (UM) programs.
  • Improve pricing transparency among pharmacy benefit managers (PBMs). As the go-between hired by insurers to manage drug benefit programs, PBMs were originally created to control drug costs by negotiating discounts on the behalf of patients. However, PBMs have recently become incredibly effective at keeping much of the savings for themselves by often pocketing the difference between the fees they charge to pharmacies and the prices they negotiate from manufacturers – prices that exist behind a steel curtain. These practices drive up co-pays and out-of-pocket costs for patients while providing record profits to PBMs. We urge HHS to consider policies that require PBMs to be more transparent about their payment practices and the true cost of prescription drugs.
  • Amend the McCarron-Ferguson Act (a state level policy). The McCarron-Ferguson Act (15 U.S.C. 1013) exempts insurance companies from federal antitrust laws. H.R. 372, which has passed the U.S. House of Representatives, would remove this protection except for the purposes of collecting, compiling, or disseminating historical loss data; determining a loss development factor for historical loss data; performing actuarial services if the collaboration does not involve a restraint of trade; or developing or disseminating a standard insurance policy form if adherence to the form is not required. This needed change gives the federal government the ability to intervene in places where insurance monopolies exist or develop. This would be especially helpful in areas where local insurance monopolies have developed from market consolidation and other factors since the passage of the Affordable Care Act (ACA), potentially increasing patient costs for insured care and treatments.

1. The Hill, “Instead of ‘fail first,’ put patients first”, (2017). Available at: Accessed March 29, 2018.
2. AMA, Prior Authorization and Utilization Management Reform Principles, (2018). Available at: Accessed April 20, 2018.

This is problematic because the availability of an alternate therapy doesn’t mean that it will be equally safe and effective in treating our patients. Because the biologics are extremely complex, and patients who need them are suffering from complex disorders, biologic therapies interact with different patients’ bodies in different ways. For example, it is common for a patient to respond well to one type of therapy, but experience adverse reactions – such as blurred vision, tremors, and memory problems – to another, even if it is in the same drug class. Other times, a patient’s immune system might stop responding to their medication after years of successful treatment, at which point different therapy options must be explored.

Limiting the therapy options available based on the price of the drug could jeopardize a physician’s ability to effectively treat a patient who isn’t responding to the option that’s approved on their formulary, and put the patient’s health at risk.

The Trump Administration clearly agrees with virtually all U.S. healthcare stakeholders that drug prices are too high in America. The large number of ideas proposed by the White House speaks to the high priority that the Administration has placed on lowering prices – and in the letter, we do express our support for a number of proposals set out by the Administration. As details emerge about the plans, the ACR will continue to support policies that reduce costs while maintaining our patients’ access to the high-quality treatments they deserve.

No one wants patients to lose access to critical treatments that keep them healthy and prevent downstream health problems. The ACR looks forward to working with Administration officials together with other specialty coalition partners on ways to lower drug costs while protecting access to high-quality treatments.

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  1. American College of Rheumatology, “Physician group letter to HHS drug pricing proposals”, (2018). Available at: Accessed March 29, 2018.
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