President Trump and other administration officials have talked a big game about their new most favored nation model for lowering prices for Medicare Part B drugs, including cancer therapies and other potentially lifesaving treatments administered by physicians. But they failed to disclose the fine print: By their own estimates, nearly 10% of people covered by Medicare would lose access to treatment in the first year, and almost 20% by the end of the second year.
Here’s how this scheme would work: The Centers for Medicare and Medicaid Services Innovation Center would implement a mandatory nationwide “test” that would base on international drug prices how much hospitals, medical practices, and clinicians are reimbursed for using the top 50 Medicare Part B drugs.
(The irony of this move can’t be ignored: The administration is using the Innovation Center, which was created and funded by the Affordable Care Act, to conduct this experiment while simultaneously trying to kill the act in the Supreme Court.)
This dangerous experiment uses America’s seniors and providers as pawns to force drug companies to lower drug prices as the Trump administration heads out the door. It’s such a serious breach of faith with the millions of Americans covered by Medicare that the organization I lead, the Community Oncology Alliance, has sent a letter to the CMS administrator, Seema Verma, asking that the experiment be terminated immediately and filed an emergency lawsuit against CMS on Dec. 11 to stop this dangerous experiment from proceeding before it causes irreversible harm.
As CMS describes in its 257-page rule regarding the most favored nations approach, when reimbursement for these 50 drugs — 38 of which are used to treat cancer and blood diseases — are cut on Jan. 1, 2021, providers “will need to decide if the difference between the amount that Medicare will pay and the price they must pay to purchase the drugs would allow them to continue offering the drugs.”
That leaves seniors with the distressing “options” of traveling to one of the few facilities excluded from the experiment, finding a hospital that can take advantage of 340B drug discounts, or, as CMS says so blithely, “forgo access.” To take advantage of the first two options, cancer patients would have to sever ties with their oncologists and their practices and find new ones, even in the middle of treatment. The third option means the patient having “no access to treatment” or receiving a less-effective alternative drug for their cancer.
Make no mistake: If the most favored nations plan is allowed to proceed, it will have tragic and even deadly consequences. CMS is very clear in its estimates: 9% of Medicare beneficiaries will simply forgo access to treatment in the first year, increasing to 19% by 2023. Among the drugs that patients may “forgo access” to are some of the most cutting-edge immunotherapies, treatments that have had dramatic results in stopping the progression of cancer.
The president’s storyline that this experiment will dramatically reduce drug costs for seniors is simply false. People covered by Medicare pay only 20% of drug costs, with more than 94% having supplemental insurance or Medicaid to cover out-of-pocket obligations. Those without any coverage for their 20% coinsurance can obtain financial assistance from one of the foundations that community oncology practices tap into to ensure that no patients go without treatment, regardless of their means to pay for it.
Tackling the increasing cost of prescription drugs is a problem that needs to be desperately solved. The most favored nations approach isn’t the way to do it.
Real solutions lie in the 35 oncology payment reform models that community oncology practices are participating in across the country and the Oncology Care Model 2.0 that the Community Oncology Alliance is developing for Medicare, employers, and private insurers. We need to strip away regulations so drug competition is fostered in value-based arrangements, including the availability and use of lower-cost alternatives like biosimilars. The country also needs to reform the 340B program so drug discounts go directly to patients in need, not to well-endowed hospital health systems.
No model of care, even if on a limited basis, should ever endanger lives, as the most favored nations experiment does. In CMS’s own words, “While there are significant savings as a result of this model, a portion of the savings is attributable to beneficiaries not accessing their drugs through the Medicare benefit, along with the associated loss utilization.” Translation: Cancer patients won’t be able to get the drugs they need while the government saves money.
That makes the most favored nations approach a cruel and heartless experiment that will result in some Americans covered by Medicare “forgoing” treatment for cancer and other life-threatening condition, especially during the raging Covid-19 pandemic.