PhRMA urges CMS to address IRA price program concerns

TL/DR –

PhRMA has outlined five key concerns related to the Inflation Reduction Act (IRA) and its price-setting provisions. Their concerns include the price-setting process being arbitrary and susceptible to politicization, patient access to medicines in Medicare Part D being at risk, the undermining of the competitive marketplace, government price setting causing harm to innovation, and the absence of patients and clinicians’ views in CMS’s approach. Despite a similar feedback given last year, CMS has largely ignored it, prompting PhRMA to call for a course correction.

Price Setting Provisions of Inflation Reduction Act: Impact on Patients and Innovation

Patients and innovation are caught in a deadlock due to the Inflation Reduction Act’s (IRA) price setting provisions. It’s imperative to address these unintended consequences to safeguard patients nationwide.

In reaction to CMS’s draft guidance for the second year of price setting under the IRA, five critical concerns have been highlighted.

• Politicization and arbitrariness of price setting process: The IRA provides CMS immense power to set prices and impose penalties, steering away from true negotiation. This could lead to political decisions affecting medicine prices.
• Risk to patient access to Medicare Part D medicines: Significant changes made by the IRA, including government price setting, might increase insurers’ use of utilization management and coverage exclusions, disrupting access to medicines. It’s crucial CMS employs authority to maintain patient access.
• Threat to competitive marketplace: The IRA undermines competition, the cornerstone of the US health care system, by allowing the government to set excessively low prices on brand medicines, potentially dissuading biosimilar and generic manufacturers.
• Impact on innovation and future treatments: The IRA jeopardizes future drug development by shifting existing R&D incentives. This might affect the development of chronic disease treatments and cause companies to reconsider investments in certain R&D projects.
• Lack of patient and clinician views in CMS’s approach: It’s unclear whether CMS is prioritizing the views of patients and clinicians in setting medicine prices. The lack of proper feedback mechanisms could have serious implications for patient access and future treatment development.

Despite similar feedback from PhRMA and multiple stakeholder groups last year, CMS largely disregarded it. As we head into the second year of price setting, it’s crucial for CMS to correct its course.

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