With just a few weeks left in 2023, moderator Jayson Slotnik, JD, Principal and Founding Member of Health Policy Strategies, began this session by inviting panelists to answer one pressing question: what’s going on with PBM reform?
According to Nicolas Ferreryos, Managing Director of Community Oncology Alliance, the simple answer is, a lot.
“We’re tracking about 25 bills right now…and they cover everything from delinking the profit margins that PBMs take from the price of a drug to transparency on drug pricing structures to patient cost and out-of-pocket expenses,” he said. “But out of all that, I think the most we’ll see before year-end is transparency and reporting.”
Randy Burkholder, Vice President of Policy and Research at PhRMA, had a more optimistic view. “There’s an understanding that there’s a legitimate problem that needs some serious work to be solved,” he said, “and I think too many people have worked too long and hard on real reform to just let things stop at transparency. I would hope we’ll see some real reform related to delinking and potentially some targeted pass through of savings at the net price level to the patient—at least in Part D.”
340B Stalled but Drug Shortages Gaining Traction
The conversation next turned to the 340B Drug Pricing Program. When asked if it will happen this year, Shelley Mui-Lipnik, Head of Federal Government Relations for Cencora, seemed doubtful.
“It’s going to need bipartisan support and they’re not there yet. This being said, we have other bills, such as the Pandemic and All-Hazards Preparedness Reauthorization Act (PAHPRA), that need to be taken care of first,” she said. “Prescription drug shortage is another pressing priority.”
It’s a sentiment shared by Jerrica Mathis, Director, Federal Government Relations, Cardinal Health.
Like her fellow panelist, Ms. Mathis agrees that this is not the year, nor the Congress, where 340B reform gets passed. But there has been movement in the area of drug shortages, what she calls the number 2 health policy priority next to PBMs.
“There was a House- and Senate-sponsored request for information about how Congress could mitigate drug shortages, that came after a wave of shortages of cancer medications and generic injectables,” she said. “Now draft legislation has been developed. I think, broadly speaking, the only thing we would ask is that they don’t pass policies that ultimately exacerbate drug shortages when the intent is to mitigate them.”
Among some of the ways these shortages could be overcome, according to panelists, are tax incentives or reimbursement. Other stop-gap measures could include creating a buffer to help meet demand.
“I think the fundamental problem is economics,” said Mr. Ferreryos. “These generic sterile injectables are not reimbursed at a rate that incentivizes manufacturing and you run into these shortages. So, we keep going through these cycles because there is a tremendous misunderstanding of the types and pricing of the drugs at issue.”
Regardless, panelists agree that the solution will need to be multipronged to allow for other more complex, long-term solutions to come into play.
Implications of the Inflation Reduction Act Both Now and in 2024
Finally, the panel turned to a much-discussed topic during this year’s AVBCC, the Inflation Reduction Act (IRA).
“I should say at the outset, there are some positive affordability provisions for patients in the IRA,” said Mr. Burkholder. “Obviously the out-of-pocket cap is going to be incredibly important for oncology patients. The other important piece that everyone should keep an eye on is what is now being called the Medicare Prescription Payment Plan (MPPP). This will let patients who are highly likely to have very high out-of-pocket costs during a plan year to average them out over the course of the plan year.”
He explained that this has tremendous implications for keeping people with cancer on treatment. Now, instead of walking away from a script, they can sign up for a program that enables them to afford their medications over the course of the year.
Another item to pay attention to, according to Mr. Burkholder, are the likely effects of redesign and the maximum fair prices efforts, which together could create some real unintended consequences and real pressures around utilization management and formulary design.
“We hope to work as closely as we can with the Centers for Medicare & Medicaid Services to ensure that patient choice and patient access isn’t being compromised as a result of some of the plan incentives,” he said.
One challenge with the IRA, brought to light by Mr. Ferreryos, is that it only touches Medicare. He explained that this leaves a whole host of the country out of anything that’s going to come through. Other concerns focused on the potential, unintended consequences of the IRA on providers—what he calls the “tweaks and fixes” that need to happen with policy like this. Several of the panelists shared that they are actively working to advance corrections that need to be made with the IRA. Some of these will happen this year, others may not happen until there’s a new Congress. Regardless, they all agreed that the IRA will certainly be a central talking point in the 2024 elections.
