Policy Playbook: Medicare Part D Drug Pricing Negotiations

Author: Ellen Shank, MD, PGY-3 // Reviewed by: Reviewed by: Summer Chavez, DO, MPH, MPM (Attending Physician, University of Houston); Brit Long, MD (@long_brit); Alex Koyfman, MD (@EMHighAK)

Policy Playbook returns to emDOCs with a concise summary of the latest developments in emergency medicine-related health policy over the summer months. In today’s post, we’ll highlight the most important aspects of each topic.

Case:

A 65-year-old male with a history of atrial fibrillation presents to the ED with shortness of breath, fever and palpitations. Exam shows an uncomfortable-appearing febrile gentleman with a mild cough. On the monitors and subsequent ECG, you note he is in atrial fibrillation with rapid ventricular response. Workup is notable for a positive RSV test and an AKI. You administer a 1L bolus, give Tylenol and note his vital signs return to normal. You remind him to take his blood thinners, suggest supportive care measures, and send him home.

A week later, you are doing your monthly chart review and note that this patient returned to the ED several days later with acute left-sided weakness and slurred speech, and was brought emergently to the IR suite for thrombectomy of a large vessel occlusion.

Further review reveals the patient was unable to afford his refill of Eliquis and abruptly stopped taking it, leading to his acute stroke.

What happened here, and how can we advocate to prevent this going forward?

What’s the issue?

Way back in October 2022, Policy Playbook unpacked healthcare provisions in the Inflation Reduction Act (IRA), signed into law by President Biden on August 16, 2022.¹ This month’s post explores the purpose of one of those healthcare provisions- the Medicare Part D drug pricing negotiations- and the anticipated impact this will have on drug pricing transparency and, ultimately, out-of-pocket costs for patients across the country.

As a quick refresher, prior to the IRA, there was no cap on out-of-pocket spending in Medicare Part D. For Medicare beneficiaries who need high-priced medications, the out-of-pocket costs can be substantial. The IRA planned to decrease direct medication costs to Medicare beneficiaries in a couple of ways – by adding an out-of-pocket cap in Medicare Part D (starting at $2,000 in 2025)¹, and by negotiating directly with pharmaceutical companies to set drug pricing such that patients are not faced with such significant affordability challenges.

This was a very significant change to how the U.S. Government had ever interacted with pharmaceutical companies. Medicare had never previously been permitted to negotiate on behalf of its enrollees for Part B (physician-administered) or Part D (retail prescription drug plan) drug pricing.² Cost savings to the Medicare program due to this provision are an estimated $100 billion over the next ten years.³

On August 29, 2023, CMS released its ten contenders for initial price applicability year 2026 – these include Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and multiple short-acting insulin formulations including NovoLog and Fiasp.⁴ CMS plans to meet with the companies that produce these selected drugs this fall.⁵

Why does it matter?

Let’s take Eliquis, for example.

The US Health and Human Services (specifically, The Office of the Assistant Secretary for Planning and Evaluation, or ASPE) released a report detailing the out-of-pocket expenditures for drugs selected for this program.⁶

In the past year, a gross of $16 billion has been spent on part D prescriptions for Eliquis alone for 3.7 million Medicare enrollees.⁶ This means a $608 annual out-of-pocket price tag for many patients headed home from your ED after new-onset atrial fibrillation or DVT diagnosis. Research shows that nearly a third of adults report not taking medications as prescribed for cost-related reasons.⁷

How can we attempt to increase compliance with evidence-based therapy? By advocating to minimize the cost of these critical medications so that they don’t preempt patients’ abilities to budget for bills that may present as a more immediate threat to their livelihood as, say, groceries, rent, or childcare. In 2025, the IRA Part D drug-related provisions are projected to cut $7.4 billion in annual out-of-pocket costs for 18.7 million enrollees, roughly $400 in savings per enrollee.⁶

This matters for us as Emergency Medicine providers caring for patients who may not have reliable access to longitudinal care or follow up for chronic medical conditions. It also matters for drug companies! Multiple drug manufacturers and organizations have filed suit against the government because of this program, and their voices will be heard at the listening sessions. However, importantly, the manufacturers of all of these first ten drugs selected for price negotiations have agreed to participate–a very hopeful signal for Medicare beneficiaries and EM physicians across the nation.⁸

What can I do about it?

Upcoming listening sessions for each drug will be hosted between October 20, 2023 and Nov 15, 2023. These sessions are open to the public!

• Refresh your memory on the IRA’s health provision benefits.
• Petition your local advocacy organization to show up for CMS listening sessions and provide feedback.
• Sign yourself up to provide input and share your story of how high drug pricing has impacted the patients you serve.

Useful Links:

1. This Kaiser Family Foundation post details Medicare Part D prescription drug benefits as they pertain to the Inflation Reduction Act.
2. Check out the CMS guide to the nuts and bolts of Medicare Drug Price Negotiation.

This post is a collaboration between emDocs and the EMRA Health Policy Committee.

References