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WASHINGTON, D.C. - Congressman Brett Guthrie (KY-02), who serves as the Chair of the Health Subcommittee on the House Energy and Commerce Committee, joined by Rep. Buddy Carter (GA-01), led a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure urging CMS to withdraw a recently proposed rule related to the Medicaid Drug Rebate Program. More than twenty Republicans on the Energy & Commerce committee joined Guthrie to express their strong concerns with the proposed rule, including how the rule will impact patient access to life-saving drugs including curative cell and gene therapies.

 

Key Excerpt:

“We are also troubled by other significant overreaches by the agency in rewriting several statutory definitions in the proposed rule that will curtail innovation and undercut patients’ access to essential care. In regards to proposed changes to the definition of “covered outpatient drugs” (COD), CMS diverges from the original text of the statute, which excludes bundled drugs from the definition, to overturn the established precedent that governs the types of drugs that qualify as CODs, by moving towards an inclusion of all drugs identified on an invoice regardless of whether they are bundled.  An accurate definition of COD is critical, since drugs defined as CODs are required to pay rebates under the Medicaid Drug Rebate Program {MDRP}, which would implicate rebates and potentially 340B liabilities if the rule was finalized. CMS’ redefinition of CODs puts certain state payment arrangements at risk, specifically states paying direct reimbursements of gene therapies, which ensures providers are reimbursed adequately for both drug product and services. This could lead to significant disruptions in the health care system, especially at facilities primarily administering life-saving and curative cell and gene therapies that are relying on these innovative reimbursement approaches for these treatments.”

 

Background

• The Centers for Medicare & Medicaid Services’ (CMS) proposed rule would exceed statutory authority by requiring manufacturers to “stack discounts” offered in the commercial markets. Current law only requires manufacturers to count the lowest discount offered in the commercial market on a drug to calculate “best price”.
• Additionally, the proposed rule would require manufacturers to report proprietary pricing information to CMS, putting unnecessary, costly reporting burdens on manufacturers.
• The proposed rule would also require inpatient administered drugs to be classified as “Covered Outpatient Drugs”, meaning that classes of drugs that have not otherwise been subject to Medicaid's mandatory 23.1% rebate would be immediately subjected to these high rebates.
• The above provision of the proposed rule is especially concerning given that hospitals are paid through bundled payments for drugs administered to Medicaid patients to account for other clinical costs associated with these treatments. The proposed rule could result in hospitals receiving less reimbursement for these drugs and cut access to care for vulnerable patients.

Click here to read the full letter.