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Medicare Drug Price Negotiation Program and Drug Pricing Reform: Eligible Drugs to Know and Understanding What’s Next

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA), which contains prescription drug pricing reform provisions. The three main Medicare prescription drug pricing reform provisions included are as follows:

  • Drug Price Negotiations: Allows the federal government to negotiate for a select number of vaccines and/or drugs
  • Inflation-Based Rebates: Mandates that manufacturers pay a rebate to the federal government when the list prices of Part B or Part D drugs grow at a faster rate than the inflation rate
  • Part D Benefit Redesign: Implements an out-of-pocket maximum for beneficiaries at $2,000 and redistributes liability among manufacturers, health plans, patients and the federal government across phases of the Part D benefit starting in 2024.

Leveraging data from the Centers for Medicare and Medicaid Services’ (CMS’s) Medicare Drug Spending Dashboard and FDA databases, McDermott+Consulting has identified the potential list of drugs subject to negotiations.

This information is particularly valuable for pharmaceutical companies, health plans, patients, pharmacies and other stakeholders as they evaluate and consider the implications of this legislation. In less than one year, on September 1, 2023, the Health and Humans Services (HHS) Secretary will publish the first list of selected drugs subject to drug price negotiations. Understanding the statutorily mandated negotiations framework, timeline and potential drugs that may be included is critical to support stakeholders’ efforts to obtain optimal outcomes.

This report describes the drug price negotiation program, an implementation timeline for drug price reforms from the IRA and information on which drugs are likely to be first subject to price negotiation.

Download the report.




EEOC Potentially Limits Employer’s Right to Mandate COVID-19 Testing

On July 12, 2022, the US Equal Employment Opportunity Commission (EEOC) revised its guidance on compliance with disability discrimination law during the COVID-19 pandemic. While previous guidance, initially published on December 14, 2021, provided that COVID-19 viral testing was permissible for on-site employees and did not run afoul of the Americans with Disability Act (ADA) due to health and safety priorities of the pandemic, the recent EEOC updates now only permit screening and viral testing measures when such measures are job-related and consistent with business necessity, holding COVID-19 testing to the same standard as other workplace medical tests. The July 12 update “makes clear that going forward employers will need to assess whether current pandemic circumstances and individual workplace circumstances justify viral screening of employees to prevent workplace transmission of COVID-19,” the EEOC said.

Read more here.




Pfizer’s Full Approval Triggers New Vaccine Mandates

The full US Food and Drug Administration (FDA) approval of the Pfizer-BioNTech COVID-19 vaccine has led to vaccine mandates by both governments and businesses. More companies will implement their own vaccine requirements in light of the FDA approval, according to McDermott partner Michelle Strowhiro in this The Hill article.

“What employers are trying to balance right now is implementing the right safety standards for their workforce while also being cognizant of the fact that the labor market is so difficult and many employers are already struggling with having the right number of people on staff,” Strowhiro said.

Access the article.




Obtaining Payer Coverage for New Tests Continues to Be Difficult

Clinical laboratories continue to face challenges to obtain positive coverage decisions by government and private payers for new tests. According to McDermott+Consulting Senior Director Deborah Godes, payers require reasons to establish new coverage assays.

“[The] key to getting a positive coverage decision from payers is making a solid case through good quality evidence,” Godes notes in a recent Dark Report article. “Clinical laboratories need to demonstrate that a particular assay actually works as it is intended and also that it is used by clinicians to make decisions regarding patient care. ”

Not all payers will be persuaded by the same arguments. Each payer has its own coverage determination process, and clinical laboratories should be prepared to deal with each one individually.

“You need to determine what drives that payer’s denials and then present evidence to address those concerns,” Godes says.

Access the article.




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