Medicare Drug Benefit Formulary Proposal Set To Be Unveiled
The United States Pharmacopeial Convention is set to unveil as early as Thursday its proposed formulary for the new Medicare prescription drug benefit, the Wall Street Journal reports (Mathews/Hensley, Wall Street Journal, 8/19). CMS chose the relatively unknown not-for-profit firm USP to determine which classes of drugs Medicare should cover, in part because it has experience writing drug formularies for the U.S. Army, the Department of Veterans Affairs and the United Mine Workers of America. USP, which will receive $1.1 million to create the guidelines, began working on the project in April and has created a committee to write the formulary as well as four advisory panels that represent beneficiaries, health care providers, drug companies and companies that will sell drug insurance, including pharmacy benefit managers (American Health Line, 7/27).
The process to create the formulary has resulted in a "fierce lobbying battle" between drug and insurance companies, the Journal reports (Wall Street Journal, 8/19). Insurers and PBMs say that private health plans generally have 50 to 90 separate drug classes, and they contend that a Medicare drug formulary with a small number of classes would create more competition among drug makers and give negotiators more leverage to procure lower drug prices.
However, the Pharmaceutical Research and Manufacturers of America says that it found the number of drug classes in four private-sector formularies ranged between 157 and 311 classes. Drug makers want more than 200 drug classes to enhance their companies' odds of having products listed on the formulary and to give consumers broader access to drugs (American Health Line, 7/27).
In a preliminary blueprint for the formulary dated Aug. 16, USP proposed listing 146 classes of drugs, according to the Journal. Although the number of classes comes between insurers' and PBMs' requests, in a number of "important areas, the drug makers appear likely to lose out," the Journal reports. In some areas, USP has proposed narrow classification of drugs, suggesting, for example, at least five classes of anti-HIV drugs. However, in categories such as antidepressants, cholesterol-fighting drugs, arthritis medications and high blood pressure drugs, the proposal appears to be leaning toward combining newer medications with older ones often available in generic form, the Journal reports.
Such a class configuration could give PBMs more leverage in negotiating discounts and make it more difficult for brand-name medicines to be included in the formulary, according to the Journal. The Journal reports that the proposal could still change, and the draft set to be released to the public this week could change further following a round of public comment. A final plan is expected to be developed by the end of the year.
CMS is "expected to announce that it considers the USP draft only a first step," and it may ultimately "take a different tack," according to the Journal. CMS could require more medicines than "might be necessary" in USP's proposal to "ensure that all its enrollees can get the drugs they need," the Journal reports. A spokesperson for USP did not comment on the draft other than to say that details were still being considered and could still change.
A spokesperson for the Pharmaceutical Care Management Association, which represents PBMs, said that although the draft released Aug. 16 is "broader than what is typically found in the commercial marketplace, this could be a step in the right direction."
However, a spokesperson for Indianapolis-based Eli Lilly said, "These guidelines reflect a lack of adequate representation by recognized medical organizations," adding that if the draft proposal were implemented, "practically speaking, patients would be denied access to the most effective therapies" (Wall Street Journal, 8/19).