CMS Aims To Ramp Up Medicare Part D Plans’ Negotiating Power Over Drug Costs With Formulary Change

CMS is allowing the plans to pursue what are known as “indication-based formulary designs,” which are already used by private insurers. “By allowing Medicare’s prescription drug plans to cover the best drug for each patient condition, plans will have more negotiating power with drug companies, which will results in lower prices for Medicare beneficiaries,” CMS administrator Seema Verma said

Friday, Aug 31 2018 UPDATED 8:58 AM

Stat: CMS Wants Medicare Part D Plans To Loosen Formularies  In a bid to lower drug costs, the Trump administration is allowing Medicare Part D plans to alter their formularies — or lists of medicines for which insurance coverage is provided — in hopes of encouraging greater negotiation between the plans and drug makers. Specifically, the Centers for Medicare and Medicaid Services will permit plans to include different indications, or uses, for prescription drugs. Currently, a Part D plan that places a medicine on its formulary must cover each indication that was approved by the Food and Drug Administration, even if a plan would otherwise want to cover a different medicine for that purpose. (Silverman, 8/30)

In other pharmaceutical news —

Stat: CVS Exec: Our New Reliance On Cost Effectiveness Should Make Drug Makers ‘Think About Launch Prices’ In a bid to dampen rising drug costs, CVS Caremark plans to allow its clients — such as health plans and employers — to exclude from their formularies any new medicine that has a higher price than a particular benchmark for determining value. The pharmacy benefit manager will set a threshold of $100,000 per QALY, or quality-of-life years, a barometer that measures both the quantity and quality of life generated by providing a treatment or some other health care intervention. The move, which begins Jan. 1, comes as PBMs are under pressure to demonstrate their own value at a time of rising drug prices. We spoke with Dr. Troyen Brennan, an executive vice president and chief medical officer at CVS Health (CVS), the parent company, about the implications. (Silverman, 8/31)

The Associated Press: Judge Tosses Lawsuit Against California Drug Price Law A federal judge has dismissed a lawsuit seeking to block a California law requiring pharmaceutical companies to give advance notice before big price increases. U.S. District Judge Morrison England Jr., ruled Thursday in Sacramento that the Pharmaceutical Research and Manufacturers of America failed to show that the court has jurisdiction to hear the case. He gave PhRMA 30 days to refile. (8/30)

Atlanta Journal-Constitution: How Georgia Parents Are Reacting To EpiPen Shortage Duke is one of many Georgia residents who have expressed concerns about the U.S. Food and Drug Administration’s response to the shortages of EpiPen, which is used for the emergency treatment of allergic reactions including those that are life-threatening. Even with use of an EpiPen, health experts still advise a visit to the emergency room. (Rhone, 8/30)

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