Pro­posal to limit Medi­care drug cov­er­age draws strong op­po­si­tion


An al­liance of drug com­pa­nies and pa­tient ad­vo­cates, joined by Democrats and Repub­li­cans in Congress, is fiercely op­pos­ing an Obama ad­min­is­tra­tion pro­posal that would al­low in­sur­ers to limit Medi­care cov­er­age for cer­tain classes of drugs, in­clud­ing those used to treat de­pres­sion and schizophre­nia.

Op­po­nents warn that the pro­posal, if en­acted, could harm pa­tients. Federal of­fi­cials say it would lower costs and re­duce overuse of the drugs.

The pro­posed rule, which would lift a re­quire­ment that in­sur­ers cover “all or sub­stan­tially all” drugs in cer­tain treat­ment ar­eas, is just one of a se­ries of changes to the drug pro­gram that are be­ing op­posed by the un­likely al­liance. Even in­sur­ers and drug-ben­e­fit man­agers, who have pre­vi­ously sup­ported added lim­its on drug cov­er­age, op­pose the rule. They ob­ject to pro­vi­sions in­clud­ing changes to pre­ferred phar­macy net­works, where con­sumers are steered to­ward a limited net­work of phar­ma­cies, and re­duc­ing the num­ber of plans in­sur­ers can of­fer in any one re­gion.

A House sub­com­mit­tee plans to hold a hear­ing on the pro­posal this week, and the rule is open for pub­lic com­ment un­til March 7.

“We’ve been scratch­ing our heads over this,” said John Castel­lani, chief ex­ec­u­tive of the Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica, the drug-in­dus­try trade group. Medi­care Part D, he noted, is the rare govern­ment pro­gram that not only gets high marks from con­sumers but also has cost tax­pay­ers bil­lions of dol­lars less than orig­i­nally ex­pected.

“Why is the ad­min­is­tra­tion try­ing to make such ex­ten­sive changes to a pro­gram that isn’t bro­ken?”

Castel­lani’s or­ga­ni­za­tion was one of more than 200 groups that signed a let­ter this week ask­ing that the rule be with­drawn.

This month, Repub­li­can and Demo­cratic mem­bers of the Se­nate Fi­nance Com­mit­tee warned that the pro­posal could “di­min­ish ac­cess to needed med­i­ca­tion” with­out sav­ing much money.

The ad­min­is­tra­tion’s pro­posal would re­move the pro­tected sta­tus from three classes of drugs that has been in place since the pro­gram’s in­cep­tion in 2006:

im­muno­sup­pres­sant drugs used in trans­plant pa­tients, an­tide­pres­sants, and an­tipsy­chotic medicines. They in­clude many well-known drugs, such as Well­butrin, Paxil and Prozac to treat de­pres­sion, and Abil­ify and Sero­quel to treat schizophre­nia. Three other cat­e­gories — cancer, HIV and anti-seizure drugs — would re­tain their sta­tus as pro­tected classes and in­sur­ance com­pa­nies would be re­quired to con­tinue cov­er­ing nearly all drugs in those treat­ment ar­eas. Medi­care has tra­di­tion­ally re­quired the broad cov­er­age be­cause pa­tients with these con­di­tions must of­ten try sev­eral drugs be­fore find­ing one that works.

In propos­ing the change last month, the ad­min­is­tra­tion said the pol­icy was en­vi­sioned as a tem­po­rary mea­sure to help ease pa­tients’ tran­si­tion to the new Medi­care drug pro­gram, and that since then, in­sur­ers had lost their lever­age in ne­go­ti­at­ing with drug com­pa­nies be­cause the drug com­pa­nies knew the in­sur­ers were re­quired to cover their drug costs and were there­fore less will­ing to of­fer lower prices.

In its pro­posal, the Obama ad­min­is­tra­tion cited a 2008 study by the ac­tu­ar­ial and con­sult­ing firm Mil­li­man that showed that the six pro­tected classes ac­counted for any­where from 17 per­cent to 33 per­cent of to­tal out­pa­tient drug spend­ing un­der Part D of Medi­care.

In ad­di­tion, it said the costs of those drugs were on aver­age 10 per­cent higher than they would be with­out the re­quire­ment to cover sub­stan­tially all drugs in these classes.

The ad­min­is­tra­tion pre­dicted sav­ings for both ben­e­fi­cia­ries and the Medi­care pro­gram if pre­scrip­tion drug plans could re­move some cov­ered drugs from their for­mu­la­ries. It could also give in­sur­ers additional tools to limit overuse of cer­tain drugs, such as the pre­scrib­ing of an­tipsy­chotic drugs to nurs­ing-home pa­tients with de­men­tia, a com­mon prac­tice that is widely viewed as in­ap­pro­pri­ate.

“We be­lieve the Part D pro­gram has been a phenom­e­nal suc­cess,” said Jonathan Blum, prin­ci­pal deputy ad­min­is­tra­tor of the Cen­ter for Medi­care and Med­i­caid Ser­vices, which over­sees the Part D pro­gram. But, he added, “We also see vul­ner­a­bil­i­ties in the pro­gram, and we have pro­posed for pub­lic in­put into ways to im­prove it.”

Lead­ers of nu­mer­ous pa­tient ad­vo­cacy groups, many of whom met last week with White House of­fi­cials to ex­press con­cern about the pro­posed rule, said they were wor­ried that pa­tients could be harmed if the pol­icy changed.

“The pro­posal un­der­mines a key pro­tec­tion for some of the sick­est, most vul­ner­a­ble Medi­care ben­e­fi­cia­ries,” said Andrew Sper­ling, a lob­by­ist at the Na­tional Al­liance on Men­tal Ill­ness.

Un­der the pro­posal, Sper­ling said, a Medi­care drug plan could have a list of pre­ferred drugs with just two med­i­ca­tions to treat schizophre­nia. That is in­ad­e­quate, he said, be­cause an­tipsy­chotic drugs work in dif­fer­ent ways in the body, and have dif­fer­ent side ef­fects. “You get much bet­ter out­comes when a doc­tor can work with pa­tients to fig­ure out which med­i­ca­tions will work best for them,” he said.

In a let­ter writ­ten by mem­bers of the Se­nate Fi­nance Com­mit­tee, the sen­a­tors sug­gested that the change could raise costs in other ar­eas. “If ben­e­fi­cia­ries do not have ac­cess to needed med­i­ca­tion,” the let­ter said, “costs will be in­curred as a re­sult of un­nec­es­sary and avoid­able hos­pi­tal­iza­tions, physi­cian vis­its and other med­i­cal in­ter­ven­tions.”

The new federal health­care law re­quires that Medi­care drug plans in­clude all drugs in cer­tain cat­e­gories and classes “of clin­i­cal con­cern,” and it au­tho­rized the sec­re­tary of Health and Hu­man Ser­vices to iden­tify those cat­e­gories.

Sper­ling said law­mak­ers had as­sumed that Medi­care of­fi­cials would keep the orig­i­nal six pro­tected classes and add to them, not cut them. The ad­min­is­tra­tion pro­posal sets a high stan­dard for des­ig­nat­ing pro­tected classes, say­ing the drugs must be needed to pre­vent “hos­pi­tal­iza­tion, per­sis­tent or sig­nif­i­cant disability or in­ca­pac­ity, or death” that would other­wise oc­cur within a week.

Emily Shetty, a lob­by­ist for the Leukemia and Lym­phoma So­ci­ety, said Medi­care ben­e­fi­cia­ries, who in­clude older and dis­abled Amer­i­cans, should be treated with spe­cial care. “They are a more vul­ner­a­ble pa­tient pop­u­la­tion as a whole, and hav­ing ac­cess to a full range of ther­a­pies is cru­cial to en­sure that they are able to get the care that they need,” she said.

The Medi­care Part D pro­gram is un­usual in that it re­quires broad cov­er­age of drugs in these cat­e­gories. Commercial in­sur­ance plans, in­clud­ing those in the new mar­ket­places op­er­at­ing un­der the federal health care law, have more flex­i­bil­ity. Some drugs are sim­ply not cov­ered, and some plans re­quire that pa­tients and doc­tors go through additional steps — such as try­ing other drugs first, or get­ting ap­proval from the in­surer — be­fore a drug will be paid for.

In­sur­ers and the com­pa­nies that man­age their drug ben­e­fits ar­gue that this ar­range­ment has worked well for con­sumers, en­sur­ing that drugs are be­ing used prop­erly and help­ing to keep prices low. But oth­ers have iden­ti­fied what they de­scribe as a wor­ry­ing trend to­ward more limited drug cov­er­age, and higher out-of-pocket costs for the most ex­pen­sive drugs.

The rule has some sup­port­ers, and many groups back some as­pects of the pro­posal while op­pos­ing oth­ers.

“Just be­cause a pro­gram is pop­u­lar doesn’t mean that it’s be­ing run the most ef­fi­ciently, and at the best value for tax­pay­ers and pa­tients,” said B. Dou­glas Hoey, chief ex­ec­u­tive of the Na­tional Com­mu­nity Phar­ma­cists As­so­ci­a­tion, which sup­ports many as­pects of the rule.


Emily Shetty, a lob­by­ist for the Leukemia and Lym­phoma So­ci­ety, said Medi­care ben­e­fi­cia­ries, who in­clude older and dis­abled Amer­i­cans, should be treated with spe­cial care.

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