CMS Administrator Seema Verma discussed the Trump administration's drug-pricing initiatives in Medicare during a speech at the Biopharma Congress in Washington, D.C. on Nov. 14.
Here are quotes on nine topics from Ms. Verma's talk:
1. Dan Best, HHS Secretary Alex Azar's senior adviser for drug pricing reform, who recently died. "For those of you who had the privilege of getting to know Dan, you know that he brought tremendous energy and passion to his role. I am grateful to have had the opportunity to work with him. We miss Dan, and we are keeping him and his family in our thoughts and prayers," she said.
2. President Donald Trump's drug pricing blueprint. "In May, the president released the historic American Patients First blueprint, which was the most sweeping set of policies to lower drug prices ever proposed by an administration. CMS has been hard at work to make the president and Secretary Azar's vision a reality — because the status quo is simply unacceptable."
3. Why the U.S. needs to transform the way Medicare pays for drugs in the Part B program. "In Part B, Medicare pays doctors for physician-administered drugs at an amount equal to the sales price of the drug plus a percentage-based add-on fee. Medicare is simply a price-taker for these drugs. There is no competition and no negotiation. Medicare Part B, by law, pays the average sales price for a drug, whatever that price may be. As drug prices continue to rise, accepting the sales price is not sustainable for the millions who depend on Part B."
4. How the administration looks to upend the Part B payments. "Under the new model, Medicare would slowly phase in a payment level based on international prices. Why? Because other developed countries see far lower prices for these drugs than we do, even though Medicare is the single largest purchaser of these drugs."
5. How the new model will help lower prices "The model would generate savings of 30 percent for beneficiaries and taxpayers, for total savings of up to $17.2 billion over five years. Beneficiaries would potentially see lower Part B and Medigap premiums, and lower cost-sharing on the order of $3.4 billion. That could mean that a senior receiving a medicine that costs Medicare $1,800 a month but costs other countries just $300 a month would see their annual coinsurance drop from $4,400 a year to just $900 a year. That's real savings."
6. Physicians, don't worry. "The goal of the IPI [International Price Index] model is to maintain financial stability for physicians – essentially to keep doctors whole, contrary to information being put out by some stakeholders. Instead of basing physician payment on the price of a drug, physicians would receive a fixed payment amount that could vary by physician specialty, physician practice, drug class or some other variable. We are open to input, and we are working with physicians on this."
7. Adding generic competition. "Earlier this year, we finalized a rule that allows plans to substitute generic drugs for branded drugs more quickly on formularies, so beneficiaries can access low-cost generics as soon as they're approved."
8. Gag clauses are illegal. "Thanks to President Trump and bipartisan leadership in Congress, gag clauses are now illegal. I was honored to be at the White House recently for the signing of two bills to end the practice. Pharmacists can now help their patients find the best deal on prescription drugs.
9. Value-based care arrangements with drugmakers. "I'm honored to announce that today CMS is approving a proposal from Michigan to enable the state's Medicaid program to enter into value-based payment arrangements with drug manufacturers. This is the second proposal of its kind that CMS has approved, following a similar waiver from Oklahoma this summer. Michigan's waiver will empower the state to demand results from drug manufacturers in exchange for paying for medicines."