Third Wave of Medicare Drug Price Negotiation Adds More Potential Peril
The Centers for Medicare & Medicaid Services (CMS) recently announced its selections for the third cycle of drug price negotiations. For this iteration, not only is it the first time Medicare Part B drugs are on the list, but it is also the first time an infectious disease drug is on the list. The infectious disease drug selected is Biktarvy, a widely used HIV antiretroviral. The decision to start including Part B drugs has many stakeholders concerned, given the distinctly different nature of administration and reimbursement in comparison to Part D drugs. The inclusion of an infectious disease drug, specifically, Biktarvy, is significant because the previous focus was on non-infectious chronic conditions. Including HIV-antiviral drugs and other infectious disease treatments is concerning, given the potential for adverse effects on access.
The selection of Part B drugs is significant because those are medications that cannot be self-administered. These drugs are often administered in a clinical setting, such as an infusion center, hospital outpatient department, or physician's office, or, in certain circumstances, in a home setting by authorized personnel. Part B drugs often include cancer chemotherapy, immunosuppressants, and some vaccines. Entyvio, Orencia, Cosentyx, Cimzia, Xolair, and non-cosmetic Botox are the drugs clearly delineated as Part B-qualified on the third cycle list. The aforementioned drugs treat conditions including Crohn’s disease, ulcerative colitis, plaque psoriasis, asthma, and ankylosing spondylitis. These are potentially debilitating conditions that patients depend on for an acceptable quality of life.
Many physician-administered Part B drugs are purchased by practices via a ‘buy-and-bill’ system. This is when physicians buy, store, and administer the medications directly and then bill Medicare. Presently, physicians are reimbursed on the Average Sales Price (ASP) plus an additional 6% fee. The Maximum Fair Price (MFP) drug negotiation structure means that reimbursement would be limited to the negotiated price. Thus, physicians would be at a higher financial risk of having to purchase medications at acquisition prices higher than the MFP reimbursement rate. In theory, the CMS guidance is supposed to require manufacturers to offer physician-administered drugs to practices at the MFP. However, Part B drugs are not privy to the rebates and PBM negotiations that Part D drugs are.
Therefore, the cost differential between acquisition prices and MFP is higher. If the lack of enforcement results in physicians purchasing drugs at acquisition prices well above MFP reimbursement, then they are financially at a loss. If practices then have to wait on the proposed Medicare Transaction Facilitator (MTF) to recoup full reimbursement from manufacturers, they are financially floating a fiscal deficit. In this case, time is literally money, which adversely affects practices’ ability to function and provide care. Moreover, physicians would have to manage the purchasing of inventory of the same drugs at non-MFP commercial prices for their non-Medicare patients. This not only increases the administrative burden but also the up-front financial risk.
The selection of Biktarvy for the drug negotiation list generates a nuanced, different subset of concerns. HIV medications are generally covered under Medicare Part B. A notable exception is provider-administered HIV pre-exposure prophylaxis (PrEP) drugs for prevention that are covered with no cost-sharing, thus zero dollar deductibles or copays, as long as it is for prevention and not treatment. HIV treatment medications, such as Biktarvy, under Part D are subject to deductibles, copays, and coinsurance based on the particular plan, such as Medicare Advantage. Starting in 2025, Part D includes a $2,000 annual cap on out-of-pocket drug spending. Additionally, antiretrovirals are among the six protected classes that Medicare plans are required to cover regardless of the drug formulary.
Medicare Part D patients cannot use patient assistance programs (PAPs), such as ‘copay coupon cards’ for medications like Biktarvy. However, they are eligible for financial assistance through AIDS Drug Assistance Programs (ADAPs), State Pharmaceutical Assistance Programs (SPAPs), charitable organizations, and the Medicare Low-Income Subsidy (LIS/Extra Help). Notably, over 70% of HIV patients on Medicare are enrolled in the LIS program for financial support in obtaining their medications. Thus, setting an MFP for Biktarvy would not lower the out-of-pocket cost for the medication since cost-sharing is a direct product of plan design. The only savings potentially generated would be for the federal government.
HIV is a unique infectious and chronic disease. Successful treatment is very individualized and has specific requirements based on biological factors. HIV treatment involves the consideration of comorbidities, immune system status, contraindications, the likelihood of successful adherence, and more. It is not a chronic disease in which multiple medications are immediately interchangeable or can be readily swapped out for something that appears ‘cheaper’ on the surface. There is also a distinct difference between a treatment and a regimen. Biktarvy is a single-pill treatment consisting of several drugs. It is less cumbersome in terms of adherence than multiple-tablet regimens (MTRs), in which several medications are taken in single-drug-ingredient form.
Biktarvy is the only 1A DHHS-recommended single-tablet regimen (STR) that does not have viral load restrictions, does not require HBV testing, and has no resistance testing requirements. The 1A DHHS recommendation indicates the highest strength of recommendation based on the highest quality of evidence from clinical trials and other research. Studies across Medicare, commercial, and managed Medicare populations show consistently higher persistence on Biktarvy compared to other DHHS 1A-recommended regimens. Higher persistence indicates fewer medication switches, suggesting patient satisfaction and adequate disease control.
Moreover, direct-comparison studies show that Biktarvy has significantly lower total costs than dolutegravir and multi-tablet regimens, despite its higher price, due to better control and patient outcomes. (Note: these studies did not include Dovato as they were done before its widespread usage). Cost is not limited to the initial drug price. Costs include advanced medical care as a result of other ineffective regimens due to drug characteristics, barriers to adherence, or even the development of resistance. Biktarvy is also overwhelmingly recommended for initial rapid-start HIV therapy. Rapid initiation of treatment is the ideal path to successful treatment and ultimately an undetectable viral load. This is especially important given that in the Medicare-aged community, when undiagnosed transmission is discovered, it is at a later stage of disease progression, where more immune system damage has been done. Therefore, evidence-based, consistent, effective, and reliable therapy is essential.
Ongoing data already indicate that the Medicare Drug Price Negotiation program poses significant risks to patient access, pharmacy stability, and adverse disturbances to provider services. HIV and the medical conditions most often represented in Part B coverage are all conditions that are debilitating, without vast amounts of treatment options. Most importantly, HIV is an infectious disease that is forward-promoting, meaning that its control is a matter of public health. Undetectable viral load means untransmittable disease. Adding these drugs to the third wave of negotiations risks the well-being of vulnerable patients, pharmacies, and the healthcare provider ecosystem. Ultimately, the only benefactor of any real savings would be the federal government.