January MedPAC Recommendations: Rebates & Biosimilars

0 288

The Medicare Payment Advisory Commission (MedPAC), responsible for advising Congress on Medicare issues, held its January 2019 public meeting in Washington, DC on the 17th and 18th of the month.

During the meeting, MedPAC discussed what specifics Congress should focus on in its efforts to reduce drug costs.

During the meeting, Commissioners expressed their dismay that some of the drugs that are covered by Medicare continue to face regular price increases, which frustrates the Commission’s goal of stability for Medicare beneficiaries. “Session after session, we’re looking at increasing prices on the various chapters that have been reviewed. And in my mind all of those represent failures in our overall goal of price stability,” said Commissioner Bruce Pyenson during the meeting.


One of the biggest issues, as viewed by the Commission, is the so-called “rebate trap.” The “rebate trap” is when pharmaceutical manufacturers offer rebates on their drugs to make them a preferred drug for pharmacy benefit managers (PBMs). This can mean that when biosimilars do make their way to the market, many consumers do not have access to them because their PBM does not offer it.

“The rebate trap is the salmonella in the whole pricing buffet,” said MedPAC Commissioner Brian Debusk, Ph.D. Pyenson offered a similar sentiment, noting that, “I don’t think any of this—any of the other suggestions will work if [the rebate trap] is not addressed,” he said. “Biosimilars have failed here. In other countries, biosimilars are aggressively promoted by national systems and are in very wide use. And various obstacles we’ve seen in the U.S. have been resolved. Yet issues that are not supported by the science are repeatedly brought up.”


An issue often discussed is that of biosimilars, especially when comparing the United States to Europe. According to Pyenson, the industry will never reach the promises of precision medicine if it didn’t solve the problem of biosimilars. Failure of biosimilars “destroy the potential of personalized medicine. Because we can’t have efficient production of biologic drugs on a mass scale” without them, he said.


One of the recommendations from the session was that Congress should replace Medicare’s current hospital quality programs with a new hospital value incentive program (HVIP) that would include a small set of population-based outcome, patient experience, and value measures; score all hospitals based on the same absolute and prospectively set performance targets; and accounts for differences in patient’s social risk factors by distributing payment adjustments through peer grouping.

Another recommendation was that for CY 2020, Congress should require APRNs and PAs to bill Medicare directly, eliminating “incident to” billing for services they provide.

With respect to ambulatory surgical centers, MedPAC recommended that Congress eliminate the CY 2020 update to the Medicare conversion factor and that the Centers for Medicare and Medicaid (CMS) Secretary should require ambulatory surgical centers to report cost data.

Comments on CMS Part D and MA Modernization Proposal

MedPAC also took the opportunity to comment on the CMS proposed rule, “Modernizing Part D and Medicare Advantage to lower drug prices and reduce out-of-pocket expenses.” The Commission noted that “Measures outlined in CMS’s proposed rule are consistent with the Commission’s position on giving Part D plan sponsors greater flexibility in their formulary tools. We understand that CMS is pursuing changes it can make through its regulatory authority, and we are generally supportive of such steps.” However, MedPAC also commented that “new formulary flexibilities likely would not be sufficient to keep Part D financially sustainable into the future. Over time, a growing share of Part D subsidy payments to plans have taken the form of cost-based reimbursements rather than fixed-dollar payments per enrollee.”

MedPAC offered pointed and specific feedback on several provisions. One such comment was with respect to providing plan flexibility to manage protected classes. MedPAC noted that it generally supports the proposed changes, and recommends that CMS provide plan sponsors with greater flexibility to use formulary tools, including removing two of the six drug classes from protected status.” Another specific point of feedback related to MA and step therapy for Part B drugs. The Commission offered its support to use step therapy for Part B drugs.

The next MedPAC public meeting is scheduled to take place March 7th and 8th at the Ronald Reagan Building, International Trade Center, in Washington, D.C.

Leave A Reply

Your email address will not be published.