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Stephanie Pellitt

, National Council for Behavioral Health

CMS Releases Medicare Part D and MA Drug Pricing Proposal

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The Centers for Medicare and Medicaid Services (CMS) has released a new proposed rule on prescription drug pricing in Medicare Part D and Medicare Advantage (MA). Most notably, the proposal would provide new exceptions to Medicare’s “six protected classes” policy, a policy that ensures beneficiaries with complex health conditions, including mental illness, have access to a full range of medication treatment options. The Partnership for Part D Access, a coalition headed by the National Council, immediately spoke out against these changes as harmful to patients’ health. Additionally, the proposal would permit Medicare Advantage plans to use step therapy for Part B drugs, provide physicians with real-time estimates of drug prices and alternatives and require the Part D Explanation of Benefits to include new drug pricing information.

Among the key provisions included in the proposed rule:

Protected Classes: Currently, Medicare Part D plans are statutorily required, with limited exceptions, to include all drugs of the following six classes on their formularies: (1) anticonvulsants, (2) antidepressants, (3) antineoplastics, (4) antipsychotics, (5) antiretrovirals, and (6) immunosuppressants. While the proposed rule would maintain the current list of protected classes, CMS seeks to advance a much more extensive set of exceptions to the protected classes policy. The proposed rule lays out the following changes allowing Part D plans to restrict their formularies with respect to the six protected classes:

  • Prior Authorization: CMS is proposing to allow Part D plans to implement broader use of prior authorization and step therapy for protected class drugs, including to determine use for protected class indication. Previously, Part D plans were permitted to use prior authorizations to determine whether a protected class drug was being used for a medically-accepted indication, not just indications that led to the drugs being protected. Citing concerns about the overutilization of protected class drugs, CMS would allow plans to use prior authorizations to review whether a drug is being prescribed for the indication that is central to the reason for protecting the therapeutic class. For instance, antineoplastics are protected for their use treating cancer, but are also widely used to treat rheumatic disorders. This rule would allow plans to exclude protected class drugs from use for such “non-protected class indications.” As proposed, the new prior authorization authority would apply to both existing therapies and new starts.
  • Step Therapy: Similar to the prior authorization proposal, the rule would allow Part D plans to implement step therapy or “fail first” protocols for protected class drugs, that is, to start a patient with a given indication on a cheaper drug and, if it proves ineffective, to move them to a more expensive drug. CMS is seeking comment on the implementation of step therapy, specifically, whether it should apply to both existing therapies and new starts or solely to new starts.
  • New Formulations of Existing Drugs: CMS currently requires plans to cover “all or substantially all” drugs in the six protected classes. The proposed rule lays out changes allowing Part D plans to exclude new formulations of existing sole-source drugs (ex. an extended-release version of an existing drug) from their formularies. In the proposal, CMS cites their concern that pharmaceutical companies could release new drug formulations — such as an extended release version with a higher price — while withdrawing the original version from the market.
  • Price Increases Above Inflation: This rule would allow plans, starting January 1, 2020, to exclude protected class drugs whose prices rise more quickly than inflation.


In response to the rule’s release, the Partnership for Part D Access, a broad-based coalition of health care stakeholders led by the National Council, expressed concern that expanding the number of exceptions to the six protected classes policy would ultimately harm patients with the most complex conditions. In a statement the group emphasized that these changes would deny patients access to the full range of medications available to treat their condition. Having access to a full range of medications is particularly important in the treatment of mental illness where many medications are not interchangeable.

For many patients with complex and hard-to-treat conditions, once they are on an effective regimen of prescription medications, they can manage their illness and achieve a high quality-of-life without the utilization of expensive inpatient or emergency department care,” explained Chuck Ingoglia, Sr. Vice President of Public Policy and Practice Improvement at the National Council, who serves as Executive Director of the Partnership.

The Partnership also pointed to a study from Avalere Health that shows how Medicare Part D plans already have many tools to control costs while ensuring patients get access to needed drugs in the six protected classes. The study found that Part D plans are currently using formularies and employing a range of utilization management and other tools, including prior authorization and “fail first” policies, to encourage Medicare beneficiaries to use lower-costing medications for both brand and generic medications across the protected classes.


Other elements in the proposal include: 

  • E-Prescribing and Benefit Tool: CMS is proposing to require each Part D plan adopt an electronic health record-integrated, real-time benefit tool that can tell prescribers when lower-cost alternative drugs are available under a patient’s prescription drug benefits. CMS is proposing to implement this requirement on January 1, 2020.
  • Step Therapy in Medicare Advantage: CMS proposes to codify previously-released guidance that allows MA plans to apply step therapy as a utilization management tool for Part B drugs beginning in 2019. Similar to the Part D step therapy proposal, this move could restrict medication access for beneficiaries, negatively impacting patient outcomes.
  • Part D Explanation of Benefits: A proposal to require the Part D Explanation of Benefits sent to members to include drug pricing information and lower cost therapeutic alternatives.

CMS is seeking public comment on these proposals by January 25. For more information about this rule, see this fact sheet and blog post.