Medicare withdraws plans to exclude drugs from Part D protected classes


Proposals that would have allowed Medicare Part D prescription drug plan sponsors to exclude certain drugs in the six protected classes have been withdrawn by the Centers for Medicare & Medicaid Services.

Pills and capsules atop a spread of $100 bills Kenishirotie/Thinkstock

In a final rule that targets drug pricing in Medicare Advantage and Part D – released online May 16 and scheduled for publication in the Federal Register on May 23 – CMS did not finalize a proposal that would have allowed a plan sponsor to exclude a drug in a protected class from a formulary, if the price of that drug increased faster than the rate of inflation.

“In considering whether to propose these exceptions, CMS took our other enrollee access protections into account, which have successfully protected beneficiary access to needed medications in the more than 12 years the Part D program has been operational,” the agency stated in the final rule.

Agency officials cited rules on formulary transparency, formulary requirements, reassignment formulary coverage notices, transition supplies and notices, and the expedited coverage determination and appeals process as policies that have protected beneficiary access.

Agency officials said that they believe the current enrollee access protections are “sufficient,” and they are not finalizing the pricing threshold exception.

The agency also chose not to finalize a plan’s ability to exclude a drug in a protected class if the drug represents a new formulation of an existing single-source product, regardless of whether the older formulation remains on the market.

Part D plan sponsors are required by law to cover “all or substantially all” drugs in six classes: antidepressants, antipsychotics, anticonvulsants, immunosuppressants for the treatment of transplant rejection, antiretrovirals, and antineoplastics.

CMS chose not to finalize this proposal because it was persuaded by comments noting that under the proposed policy, “in a scenario where our other formulary requirements did not require Part D sponsors to have the new formulation on their formulary, a Part D enrollee who is stable on the old formulation could be left without access to the new formulation,” the agency stated in the final rule. “Consequently, we decline to finalize this exception.”

The final rule codifies in regulation a plan’s ability to impose prior authorization and step therapy for beneficiaries initiating therapy in five of the six classes, as has been the policy since 2006 (antiretrovirals are excluded from prior authorization and step therapy).

CMS also finalized a policy implemented in 2019 that allows Medicare Advantage plans to implement step therapy for drugs administered in the physician office under Medicare Part B. Similar to step therapy in Medicare Part D, this applies only to beneficiaries newly starting on treatment and includes an appeals process similar to Part D.

Another proposal finalized is one that prohibits so-called “gag clauses” in Part D contracts, which prevent or penalize pharmacists from discussing lower-cost pharmaceutical options with customers.

CMS also will be requiring Part D plans to adopt tools no later than Jan. 1, 2021, that integrate with a prescriber’s electronic health record or e-prescribing software to inform providers when lower-cost pharmaceutical options are available under a patient’s drug benefit. Similarly, the Part D explanation of benefits statement, effective the same date, will be required to inform beneficiaries of drug price increases and lower-cost alternatives.

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