CMS Announces Medicare Part D Final Rule Maintaining Current Policy on Six Protected Classes

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The Centers for Medicare and Medicaid Services (“CMS”) announced a final rule maintaining the existing policy on coverage of drugs in the six protected classes. The proposed rule included a provision that would have allowed Medicare Part D plans to exclude protected class drugs from their formulary if the price of the drug increased beyond a certain threshold. However, CMS ultimately decided against implementing this proposed change. In addition, the final rule maintained current provisions relating to prior authorization and step therapy requirements.

When it was passed in 2003, the Medicare Modernization Act (“MMA”) created the Medicare Part D Program which provides a prescription drug benefit to Medicare beneficiaries. Medicare Part D plans are required to provide coverage for at least two drugs in each therapeutic class. However, the Centers for Medicare and Medicaid Services (“CMS”) recognized that, in some instances, the two drugs rule may be too restrictive. Consequently, CMS identified six categories of drugs, commonly referred to as the “six protected classes,” and required Medicare Part D plans to cover “all or substantially all” of the drugs in those classes. The six classes are: anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals and immunosuppressants.

In an effort to reduce costs, the six protected classes have been the target of proposed policy changes for some time. The Obama Administration proposed changes that would eliminate some of the protected classes. The proposals were unpopular, and ultimately the Obama administration withdrew them.

More recently, in May 2018, the Trump Administration, in its American Patients First blueprint, proposed changes to the Medicare Part D program as it related to the six protected classes. Specifically, HHS suggested allowing Medicare Part D plans to limit access to high cost drugs that did not provide Part D plans with rebates or negotiated fixed prices.

However, under the final rule, CMS decided against allowing Part D sponsors to exclude protected class drugs from their formulary when the price of the drug increases beyond a certain threshold. The final rule also did not include an exception which would have allowed Part D sponsors to exclude a protected class drug from their formulary if they new drug is only a new formulation of an existing drug, regardless of whether the older formulation remains on the market.

In addition, the final rule maintained the current policy on step therapy, in which a Part D sponsor is permitted to impose prior authorization and step therapy requirements for Medicare beneficiaries initiating therapy (“new starts”) for five of the protected classes. Antiretrovirals remain exempt from the prior authorization and step therapy requirements.

Stakeholder reaction to the final rule is mixed. The American Cancer Society Cancer Action Network noted “[c]urrent cancer patients will be relieved to hear their access to innovative new drug therapies will not be in question under this finalized rule … [however] [c]oncern remains … over how this may affect patients starting new therapies.” The group, Let My Doctors Decide, which advocates for the position that patients and health care providers should always make treatment decisions without interference from insurance companies or pharmacy benefit managers, is also concerned about the step therapy requirements. They noted that current step therapy policies have a negative impact on patient access to medicines, and they cautioned against further erosion of the current protections. Meanwhile, some concerned about the “skyrocketing” price of drugs contend that the Trump administration caved to drug industry pressure.

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