An Open Letter to Dr. Meena Seshamani on the Inflation Reduction Act

We don’t need cheerleading for the IRA; we need to know that you and your colleagues understand the concerns and are addressing them in a clear-eyed fashion.

Dear Director Seshamani,

Thank you for your article, published in STAT on the eve of the election, offering your perspective on the Inflation Reduction Act and its implementation to date (linked below), and thank you for your service in the Centers for Medicare and Medicaid Services.

It may be that, after you read this, you think my saying that is disingenuous. It’s not.

I do appreciate that the implementation of the Inflation Reduction was a thankless and Herculean task given what you, rather charitably, describe as the “aggressive” nature of the deadlines. I’m sure you and your team experienced the implementation challenge as an ultra-marathon. Thank you for running it. 

The Elephant in the Room: I know, as well, that the election loss introduces a new dimension of uncertainty, meaning that political appointees are already considering what lies next. And with the incoming Trump Administration promising civil service reform, I know the uncertainty is not limited to political appointees. I offer this rather harsh criticism because, as difficult as the next several months will likely be, they are likely to be awfully important in avoiding, what I fear, is a coming train wreck.

My Timing: I held this open letter response to your article until after the election because I wanted my response to be about policy, not politics.

Feedback: Ok, now for the no holds barred feedback. Please take it in the spirit that it’s offered. I want the IRA to succeed as far and as much as it can.

My concern—to put my bias as a rare disease patient upfront—is that the IRA, as it is being implemented, risks dangerously undermining innovation for “gains” that are increasingly looking to be either marginal or beset by very disturbing negative offsets. Some of that is, admittedly, all about the statute itself, but a good deal of it is about the self-inflicted wounds along the way in implementation. 

Big Picture: My core criticism of your piece is that it is pretty obvious (and misleading) cheerleading for the IRA and CMS’ implementation of the law. That’s not what we need. We need the kind of leadership that comes from honest, clear-eyed acknowledgement of the problems. Anything else is a terrible disservice to the public.

“Savings”:  You trumpet the “savings” that you say will come from year 1 negotiated prices. Your piece, like previous CMS self-congratulatory statements, present those “savings”, quite deceptively, to the public.

Here’s what you said: “[t]he first cycle of negotiations resulted in meaningful projected savings for Medicare and for people with Medicare — an estimated $6 billion for the program if the negotiated prices were in place in 2023 for the first 10 selected drugs”. 

No savings have “resulted” at this point, of course, as the prices obviously haven’t even taken effect.

That word appears meant to convey a sense of confidence that “$6 billion”—or near to it—is going to be achieved in year 1, despite, as you mention, the fact that your “projection” just applies the negotiated prices back in time to a Part D program that, because of the IRA, will be substantially different in 2026, when the prices actually go into effect, and that don’t capture the various ways stakeholders acted fundamentally DIFFERENTLY then than they will in 2026. 

Your deceptively simplistic analysis, entirely inconsistent with your impressive credentials and experience, is, at best, a disappointment.. 

In presenting a misleading picture to the public, you fail to acknowledge, even in passing, that:

• the Administration has already committed $7 billion to “stabilize” Medicare premiums as a consequence of the IRA, a pretty expensive “offset” to IRA “savings”;

• the risk, which plans, PBMs, 340B covered entities, and others have ALREADY articulated, that they will be undermining the “projected” savings by actively switching patients to high listings/high rebate alternatives to the negotiated price drugs;

• the threats of retail pharmacies to not even stock negotiated drugs because they have no confidence in CMS’ ability to facilitate manufacturer payments to those pharmacies of the difference between their acquisition costs and the far lower negotiated prices;

• CMS’ failure, even though we are only 14 months away from negotiated price implementation, to even NAME the contractor that will be responsible for implementing the negotiated prices; and 

• the disarray CMS has caused by inviting manufacturers to help effectuate negotiated prices and eliminate duplicate 340B discounts by developing a rebate model, only to have its sister agency, the Health Resources and Services Administration, threaten to pull Medicare coverage from the first drug maker to announce an intention to act on CMS’ invitation (honestly, this is keystone cops level of incompetence).

I could go on, but I’ll leave it there. 

Affordability and Access: You offer a big flourish here. The IRA “has fundamentally improved the affordability of and access to prescription drugs for millions of people with Medicare”. Well, I guess I partially agree with that. 

I’m a big fan of $2,000 cap. For the 1.5ish million Medicare beneficiaries who previously were above that point and forced to pay more, this law is a win. No doubt. (But it’s worth noting, as you know, that this is a small part of the 50+ million Medicare Part D beneficiaries. (The expansion of the Low Income Subsidy is, I fully acknowledge, another really great development.)

In part, though, I take your reference to the IRA provision referred to as M3P or “smoothing”, which allows patients with higher out of pocket obligations to spread those costs over as long as 12 months. Honestly, CMS’ implementation of that provision to date has been terrible.

Here are the lowlights: no means to opt in at the pharmacy counter, dumping most of the education effort on pharmacies (without any compensation) and plans (that see this provision as a threat, such that they are happy to slow walk their “efforts”), and government “patient education” materials that are abysmally poor (12 pages in patient unfriendly, laborious prose that is available in only 5 languages—such an obvious miss from a health equity perspective).

Again, I could go on, but I’ll leave it there. 

But, perhaps most fundamentally, you don’t acknowledge—let alone offer solutions for— any of the access problems that multiple stakeholders are—quite reasonably—fretting over, including:

• forced switches of vulnerable patients off of negotiated price drugs by plans, PBMs, 340B entities, and others, looking to pocket the rebates and margins on higher priced drugs;

• utilization management that plans and PBMs promise to put on steroids, with aggressive uses of prior authorizations, steps edits, and other “tools” that seniors struggle to navigate; and

• the troubling plans by some PBMs to RAISE cost sharing for those that were under the $2,000 cap to “offset” IRA generated increased costs to plans.

Inclusiveness and Transparency: In an Administration admirably committed to these important values, which are unquestionably core elements in realizing health equity, you mention these values no less than 8 times.

You say, for instance, that, “[f]rom the day President Biden signed the Inflation Reduction Act into law, my colleagues at CMS and I sought to be thoughtful, inclusive, transparent, and decisive”.

I don’t doubt that was what you “sought” to do.

But, as a rare disease patient, I think you failed—pretty miserably. Without informing patients and patient advocates of what CMS’ actual application of its wonderful-sounding “criteria” are to the drugs and diseases at issue, it was largely an exercise in frustrating futility for CMS to hold “listening sessions”, which devolved into confused patients staring blankly at CMS officials and contractors who failed to offer anything of substance sufficient to frame a real dialogue.

CMS’ plans to overhaul the process bear (silent) testimony to the failure of those efforts, but you fail to acknowledge in simple, direct, and potentially reassuring terms that, yes, we got the message, we fell woefully short in achieving a basic level of “inclusiveness” and “transparency”.

Year 1 negotiation is over; CMS still hasn’t spoken to how it got to the prices that it did—and your article doesn’t do anything but engage in pretty useless sloganeering and platitudes.

The public deserves better.

Timing: One last note. Part of my decidedly negative reaction to your piece is a function of its timing, in addition to the concern that you systematically avoid the tough issues and questions. It’s hard not to see the piece as a political message, offered within days of the election, rather than a public-spirited effort to inform stakeholders, including worried rare disease patients like me, that, yes, “we have made some serious mistakes, but we acknowledge that, and here’s our plan to fix them”. 

The closest you come to a honest moment of self-appraisal is your statement that “[t]here have been questions around how we implemented this program”, but your piece, you say, addresses those, without acknowledging a single failing, by offering what you present as clarifying “insight into the process”.

In other words, your position is that no mistakes have been made. The concerns of those who see a series of bad decisions so far—like me—are just a function of the fact that we don’t have your “insight”. 

A public servant’s first duty is to be candid with the public she serves. You are failing that core obligation, and eroding trust in CMS as a consequence. 

Let me end, despite my criticism, where I began. You and your team were asked to run a regulatory ultra-marathon. Thank you for doing that. I really do mean it. 

The STAT article can be found here: https://www.statnews.com/2024/10/29/drug-price-negotiation-ira-second-round-medicare-director/