The Trump Administration has continued their to reduce the rising cost of prescription drugs in their latest to the ACA’s benefit and payment parameters. The benefit and payment parameters rule governs key elements of the ACA including the general operations for both federal and state insurance marketplaces and qualified health plan (QHP) benefits.
In a , CMS said this rulemaking “represents the Trump Administration’s ongoing commitment to improve access to more affordable health coverage options.”
While there are a few expected changes to risk adjustment, the changes to the prescription drug benefit caught my eye. So far, most of the proposed changes to reduce pharmaceutical costs have only addressed Medicare and Medicaid, thereby leaving employer-sponsored insurance and other forms of commercial insurance untouched. With this latest proposal, HHS is strongly encouraging the use of generic medications and, to the extent plausible, limit unnecessary costs associated with the use of brand-name pharmaceutical therapies when a medically appropriate generic is available.
One proposal would allow mid-year formulary changes for plan years starting on or after January 1, 2020. According to , a formulary is “a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.” A group of experts known as the pharmacy and therapeutics (P&T) committee is responsible for developing the formulary. The P&T committee usually consists of doctors, pharmacists, nurses and other clinical professions. They determine which medications get placed on a formulary. In addition, formularies are usually split into different groups, known as tiers, based on price. Each tier has a different out-of-pocket cost associated with it. For example, a drug in a higher-priced tier will have a higher copay or coinsurance amount.
Formulary changes can be made for a variety of reasons, such as an FDA recall. However, they often result in disruption to patient care. Because of this, CMS sets strict guidelines for when formulary changes can be adopted and the notifications that must be sent to enrollees prior to making the change.
Under this new CMS proposal, health plan issuers would be allowed to remove a brand-name drug from their formulary or place it on a different cost-sharing tier when a cheaper generic becomes available during the course of the plan year. As written, this proposal would require issuers to notify enrollees in writing of any formulary change at least 60 days prior to the effective date. During these 60 days, enrollees have the option to try out the generic and see if it is as effective as the brand-name drug. They can also work with their prescriber to find an alternative medication that is covered by their plan or request continued coverage of their brand-name medication.
Allowing issuers to drop brand-name drugs or place them on a higher cost-sharing tier will incentivize enrollees to use generic drugs. In turn, it should generate cost savings for both issuers and enrollees. As such, URAC submitted comments lending support to this provision but strongly encouraged CMS to only allow such changes when coupled with specific actions to protect patients.
You can read URAC’s comments in full here.