CMS Final Rule Expands Step Therapy to Part B, Makes Concessions on Protected Classes

Last week, CMS issued a final rule that makes changes to Medicare Advantage and Medicare Parts D and B.

“The improvements we are making to Medicare Advantage and Medicare Part D deliver on the promises in the President’s blueprint to provide more negotiating tools and more transparency for patients,” said HHS Secretary Alex Azar in a statement announcing the final rule. “They are significant steps toward a Medicare program, a drug pricing marketplace, and a healthcare system where the patient is at the center and in control.”

Under the rule, Part D sponsors will still have to include on their formularies all drugs in the protected classes of antidepressants, antipsychotics, anticonvulsants, immunosuppressants for transplant rejection treatment, antiretrovirals, and antineoplastics. Part D sponsors can impose prior authorization and step therapy requirements, but only for new patients.

CMS did not finalize its intended plan to create exceptions that would have allowed Part D sponsors to exclude a protected class drug on the basis of price hikes, or to exclude a protected class drug if it represents only a new formulation of an existing product.

All Part D sponsors will be required to adopt 1 or more real-time benefit tools, capable of integrating with electronic health records, by 2021. These tools will inform prescribers when lower-cost therapies are available under an individual patient’s prescription drug benefit, and CMS says it hopes this information will reduce drug costs, minimize out-of-pocket costs, and improve adherence. Part D plans will also be required to send members information on drug price increases and lower-cost alternatives.

CMS is also finalizing regulations under which Medicare Advantage (MA) plans can implement step therapy for Part B drugs for new patients. Step therapy approaches must be approved by the plan’s pharmacy and therapeutics committee, and when patients appeal a denial of a drug, the plan’s decision-making timeframe will be shorter than it is currently and will mirror Part D rules. CMS changed its plan to use a 108-day lookback period for Medicare Part B therapies to determine whether a patient had been actively taking a medication and determining whether the patient would become subject to step therapy. Instead, CMS will use a 365-day lookback period as a way to ensure uninterrupted care.

The rule also prohibits so-called “gag clauses” in pharmacy contracts; these clauses have historically restricted Part D sponsors disclosing a lower cash price for a prescription to an enrollee. The new prohibition against such clauses, says CMS, will help Medicare beneficiaries find lower-cost alternatives, such as therapeutically equivalent drugs or interchangeable biosimilars.

CMS also codified a policy enabling beneficiaries to select an MA plan that negotiates prices for physician-administered drugs, which the administration says will help support the uptake of biosimilars and increase competition in the market for physician-administered drugs.

In a statement on the rule, the American College of Rheumatology (ACR) praised CMS for changing the duration of its lookback period; Angus Worthing, MD, chair of the ACR Government Affairs Committee, said that “The originally proposed 108-day lookback period would have put many of our patients at risk for having to go through step therapy all over again. Extending this period to 365 days will help to protect these patients, and we appreciate CMS listening to our feedback.”

Worthing also praised CMS for making drug pricing information more readily available, but cautioned that pricing information should not be used as a means to force stable patients to change their treatments. Finally, ACR called on CMS to require MA plans to make their step therapy exception processes readily available—and easily understandable—on their websites for providers, patients, and caregivers.

Barbara L. McAneny, MD, president of the American Medical Association (AMA), said in a statement that “seriously ill patients who faced the prospect of new hurdles to accessing their medication can breathe a sigh of relief now that the Trump administration has discarded the proposal” related to exclusion of protected-class drugs under Part D, and commended the administration for listening to the concerns of AMA and of patients.