While a lot of the attention around the Inflation Reduction Act (IRA) has focused on its implications for pharma manufacturers and Medicare Part D plans, much of its focus is on patients and making sure they can access the prescription medications they need at a price they can afford. While aspects such as the out-of-pocket cap for Medicare beneficiaries and the limit on premium increases for plans are welcome developments, some uncertainties still exist around the actual implementation of the law and how patients may be affected. On Oct. 19, life sciences consulting firm Innopiphany, LLC brought together three speakers from patient-advocacy groups to discuss their hopes, concerns and what they have experienced so far.
Jason Harris, vice president of government relations and advocacy at the National Psoriasis Foundation, revealed that many in the psoriatic disease community are excited for elements of the law, particularly the $2,000 out-of-pocket cap, to kick in. “It can’t come soon enough.” The IRA has “so many potential avenues for success and also unintended consequences,” he said, expressing concern around “what implementation will mean as it relates to utilization management within the program.…For folks in our community, a therapeutic alternative isn’t necessarily a reality. Some folks are going to cycle off treatments.”
Lisa Kennedy, Ph.D., founder of and chief economist at Innopiphany, noted that the IRA limits premium increases for plans, which will make it challenging for them in the face of “expanded demand from patients,” which will hopefully result in better patient outcomes. But “payers are going to work much harder to try to manage the utilization of these products.”
With the limits on premium hikes, as well as patient out-of-pocket costs being capped and Part D plans having to pick up 60% of the costs in the catastrophic phase starting in 2025 — up from 15% this year and 20% next year — “something has to give,” said Carl Schmid, executive director of the HIV + Hepatitis Policy Institute. “And we’re really concerned that it’s going to be us; it’s going to be our access to the prescription drugs” if payers offer fewer therapies.
PBMs and plans, he said, “could extract more money from the manufacturers in terms of rebates. So they could be squeezed out. And so, if you push down here, it goes up here, and it’s like whack-a-mole.” Schmid expressed concern about not only drugs excluded from formularies and pressure on the six protected classes but also formulary tiering. “They could put on drugs on higher tiers. So you may be protected with your out-of-pocket maximum for the year, but that doesn’t say anything. You still could put drugs on the higher tier and get as much money out of the patients as possible.”
Some payers that Innopiphany has spoken with “have really alluded to that…pressure of this and really starting to think about how they’re renegotiating contracts, what they’re really thinking about, how they structure access and their utilization management,” Kennedy said.
Those sentiments were echoed by Michael Ward, vice president of public policy and government affairs at the Alliance for Aging Research, who said that payers note that “there are only so many levers that they have” and that they will lean on utilization management “for additional ways to constrain costs.…I think it’s going to be really important to monitor and potentially put guardrails in place” around both utilization management and formulary placement, especially for drugs undergoing Medicare price negotiation.
Harris contended that educating the various patient communities on implications of the IRA will be important: “The cap is in place now [and goes into effect in 2025]. What does that mean?”
How Will CMS Use Patient Input?
CMS has revealed that between Oct. 30, 2023, and Nov. 15, 2023, it is holding patient-focused listening sessions for each of the drugs. The sessions kicked off Oct. 30 with Eliquis and are scheduled in alphabetical order, with Xarelto wrapping up the meetings on Nov. 15.
None of the first 10 negotiated drugs directly impact the HIV + Hepatitis patient community, so it is not involved in the listening sessions, but Schmid explained that CMS historically has “been really good at meeting with all different groups” and hearing their views. That said, “I’m not sure they’re collecting still the right information from patients and patient groups.”
Harris noted that two of the 10 negotiated drugs are of interest to his group’s patient community, and “there’s a lot to unpack here.” The fact that CMS is holding these sessions is “great,” he said, but questions remain around how it will use the patient feedback. “I think all of us could probably say that three minutes from 20 individuals is not necessarily going to be a complete story…of the community aspect.” Still, he said, “I think we’re really trying to look at this in the long term.”
CMS, pointed out Kennedy, did not have much time to roll out the program. Ward agreed it’s important to keep that in mind and that “the listening sessions are not the finish line for patient input.” The short comment period presented a challenge in mobilizing people, observed Schmid, and Harris noted some procedural obstacles, not all of which were necessary. “I think we need to make sure that going forward, that we determine what’s necessary and what’s not necessary to ensure that patients can [overcome these barriers] and feel like they have an important voice.”
It also can be hard for patients to speak up, asserted Schmid. “I think for certain patient groups like HIV, there’s still a lot of stigma.”
When HHS negotiates a maximum fair price for a drug, one of the considerations is comparative effectiveness of a drug and its therapeutic alternatives, so the notion of value is important. However, the speakers agreed that it is very difficult to articulate value in terms of outcomes to both patients as well as society more broadly and how they may differ across various communities.
For instance, Schmid asserted that HIV and hepatitis are issues not only in the U.S. but also on a global scale, and they can have bigger impacts on different communities, with HIV particularly affecting Black and Latino Americans in the U.S. Harris noted that “for someone with psoriatic disease,…oftentimes we find that remission to an individual is different from what a physician thinks from what a researcher thinks, and so those types of kind of more granular — really like the actual story behind what someone’s going through — it’s very difficult to capture that.”
“Every patient is different, too,” pointed out Schmid. “With our clients, everyone’s different; everyone has different issues. One drug may not work so well for” one person but might for another. “So I think that’s kind of hard to capture here.”
Are PDABs Introducing Confusion?
One external complexity with the Medicare price negotiations mandated by the IRA are state efforts to bring down drug prices via Prescription Drug Affordability Boards (PDABs), nongovernmental state-level entities tasked with finding affordability solutions for prescription drugs, said Schmid. Seven states — Colorado, Maine, Maryland, New Hampshire, Ohio, Oregon and Washington — have enacted laws establishing PDABs.
“I think they’re not going about asking the right questions,” he contended. “And we’re seeing how difficult it is at the federal level, and they have a lot of resources behind this. And for states to do it as well, I just don’t think that they have the resources, nor they should be in the business of setting prices at the state level.”
“I think that what’s happening in the states is just adding confusion, complexity to an already difficult situation,” he continued. “And it’s really taking the issue off of the insurers,” which determine what people pay for drugs. Top of mind for patients is their out-of-pocket responsibility when they pick up a prescription drug. “Yes, we have to be concerned about the overall price, but there’s a lot of other things that determine that price such as PBMs and other rebates.…It’s really going to be confusing to have a price here at the federal level, a price in Colorado, a price in Michigan, a price in Maryland.”
While the IRA is focused on Medicare, Harris questioned how it might impact commercial payers. “What happens on a negotiated price? What is that spillover effect to potential commercial markets or employers?” He said he had heard of the potential for employers’ costs rising as a response.
ICER Introduces New Measure
A couple of weeks before the webinar, the Institute for Clinical and Economic Review (ICER) released a special report on two of the drugs that will undergo price negotiation in the initial round: Eliquis (apixaban) from Bristol Myers Squibb and Pfizer Inc. and Xarelto (rivaroxaban) from the Janssen Pharmaceutical Companies of Johnson & Johnson as treatments for non-valvular atrial fibrillation. The report did not use the quality-adjusted life year (QALY) but rather equal value life year (evLY), “an alternative measure that values all life-extending treatment effects equally for all patients, regardless of pre-existing disability or age.”
The scale ICER uses goes from 0 to 1, with 0 being death and 1 being perfect health. With the evLY gain, “we’re all B students,” remarked Kennedy. “We can never get to perfect health. So 0.851 is approximately the highest that you can get. And we see some challenges with that as well, because automatically those patients who are younger are going to accrue more evLYs versus the elderly.” The group also used cost-effectiveness thresholds of $100,000 and $150,000 per evLY, as well as direct medical costs as opposed to broader costs. “That’s also problematic for some diseases where a lot of the costs fall on patients and on the employer,” she maintained, pointing to migraine as an example. “You see a big chunk of the costs are not within the health care system necessarily, but the broader costs are sitting outside of that. So those diseases could get deprioritized.”
According to Ward, ICER came up with evLYs “as a supplemental measure to QALYs. It’s basically the same thing as a QALY. They really just lop off half the equation of QALYs, and they lop off that quality-of-life portion. And I’ll say what that does, independent of concerns about aging that [Kennedy] raised, is it really undervalues symptomatic treatments,” such as treatments for dementia. “I think that we’d be very concerned if CMS chooses to adopt this in their methodology moving forward.”
As far as the kind of evidence that patient groups have shared with CMS, the National Psoriasis Foundation has pointed the agency to its “externally led, patient-focused drug development report on the impact of the disease on outcomes that are important.…We do have annual surveys that we run. I think in some cases, some of the questions that are being asked, I would say maybe we don’t have a ton of data on those exact specifics of more comparativeness, effectiveness research and things like that that are kind of drilling down very much on therapy to therapy. So I think that’s an opportunity for improvement.…I really look at our job in a lot of ways to sort of educate the agency on the perspectives of folks in our community, less so on A versus B versus C versus D.”
“We’re just here to fight for the patients and what their prescriber prescribes,” agreed Schmid. “We don’t get into the business of what drug is better than another drug. That’s not our job.…Patient groups don’t have that type of information because we don’t get involved in that.”
As patient organizations prepare to provide commentary, Harris said that the most effective approach his group has taken is to send out an email, bring together interested individuals, walk them through the process and have conversations with them as opposed to simply sending out a short document on the issue. The “biggest challenge,” he said, is “the speed at which this needs to occur.”
“I think it’s intimidating space for a patient to step into,” observed Ward. “You frankly feel like the weight of the community, especially if there’s limited representation, is falling kind of on your shoulders, and you may or may not be comfortable and probably used to public speaking environments, and all of the things that go along with that.
“And so, I think that it’s really incumbent, while it’s been [an] accelerated process for the first round, I think the more that CMS can transition to a model that looks like the patient-focused drug development sessions that the FDA has, where it’s a two-way discussion.…I think that where there’s give and take and there’s a discussion, I think that that’s going to be much more advantageous and really provide environments where the types of education that our groups have collectively done to ensure that patients feel well-equipped, that it’ll be well-suited to those prior efforts.”
“I think we forgot to mention that these listening sessions are that: listening sessions. That’s it. And no opportunity for give and take,” agreed Schmid. “And so I think that’s a really important point,…that we need to have sessions like that where it’s back and forth, and you can have a discussion and follow up.”
Contact Kennedy at firstname.lastname@example.org.