The Pharmaceutical Research and Manufacturers of America (PhRMA) has identified key areas where it believes CMS could improve transparency in the Medicare drug price negotiation process. These areas include the agency’s application of the bona fide marketing standard, improving transparency in the selection of therapeutic alternatives, evaluation of real-world evidence, and selection of studies used to determine the maximum fair price (MFP) for drugs. CMS has expressed its commitment to greater transparency, noting that it plans to reach out to stakeholders for input as it continues the second cycle of the negotiations. However, CMS may need to go through a formal rulemaking process to implement any changes to ensure clear guidance and avoid legal challenges.
Frier Levitt partner Matthew Kupferberg sheds light on this topic in an Inside Health Policy article titled, “PhRMA Pegs Key Areas to Hike Transparency in Drug Price Negotiations.” Matthew states, “If CMS elects to informally reach out to manufacturers, without any rule making process evidencing a change in CMS existing policy, CMS risks potential lack of clear guidance, industry and public confusion, as well as enforcement challenges and the potential for additional litigation…It may also be a potential dereliction of their duty to engage in and implement changes via the rule making process per statutory requirement. While CMS has a certain amount of discretion with respect to rule development and implementation, it is likely the agency would try to use the rule making process to arrive at increased transparency.”
The piece further explores the need for enhanced clarity in areas such as: bona fide marketing, therapeutic alternatives, data from studies and patient listening sessions, additional data sources used to determine MFP, the evaluation of real-world evidence, and monitoring and compliance.
