- The Department of Health and Human Services will continue barring Medicare Part D plans from applying the drug utilization management tools prior authorization and step therapy for beneficiaries taking HIV antiretroviral drugs. A rule proposed in November 2018 would have permitted such practices.
- Gilead voiced opposition to the original proposal, saying physicians need to have the flexibility to prescribe the right medicines for patients. Under the proposal, patients would have needed to fail treatment on less expensive drugs before being allowed to receive more costly ones.
- The government has also backed off a plan that would have allowed Part D plans to more tightly manage drugs in six "protected classes" if they raise prices too much or represent just a reformulation of an existing product.
Medicare requires that private health plans managing beneficiaries' drug benefits include in their coverage all drugs in six classes: HIV antiretrovirals, antidepressants, antipsychotics, anticonvulsants, cancer drugs and immunosuppressants for treatment of transplant rejection. These "protected classes" prevent managed care and Part D plans from excluding necessary drugs from their formulary, which could result in poorer health outcomes.
In five of the six classes, it has been Medicare policy to allow some utilization management: step therapy, which requires that less expensive drugs fail before patients can proceed to the more costly ones; and prior authorization, which requires that physicians file paperwork to justify prescribing the pricier choices. HIV has been exempted from that policy, but a November proposal threatened to revoke that exemption.
The final rule published Thursday codifies the use of these utilization management strategies for patients newly beginning therapy in the five other classes.
The continuing HIV exemption was seen as a positive for Gilead Sciences, which is leaning on its HIV franchise for growth.
"For Gilead, the bear thesis was that limiting the protection of HIV under Medicare would usher in more formulary management," Bernstein analyst Ronny Gal wrote in a May 16 note to clients. He characterized the final rule as a "direct alleviation of this concern."
The Centers for Medicare and Medicaid Services also pulled back from a plan to ban reformulations of existing protected class drugs from gaining that status, along with drugs that see price increases greater than the inflation rate.
CMS stated that it declined to follow through on the reformulation proposal because it potentially could leave patients without access in cases where a reformulation completely replaces an older version of a drug.
The agency dropped its plan to drop drugs with big price increases because it would take away a negotiating tool from Part D plans. Many contracts with drugmakers already include price protections, which the manufacturers may offer in return for favorable access.
CMS' retreat removes one policy from the Trump administration's push to curb drug prices. It recently finalized a rule to require drugmakers list prices in television ads and is working on a proposal that would recast how rebates work in Medicare and Medicaid.