The Medicare Price Negotiation Meeting Minutes: Some Nuggets
Nyah Phengsitthy at Bloomberg takes a close look at the price negotiation meeting minutes that CMS released to "explain" its IRA prices. I'm quoted.
I make two points in Nyah’s (typically) insightful article that focuses, not insubstantially, on the Centers for Medicare and Medicaid Services’ decision to include “meeting minutes” of the negotiation discussions with each manufacturer as part of its “justification” of Inflation Reduction Act “negotiated” prices. As I point out in the article, “[i]n [price “explanation”] materials that are lengthy, often filled with cryptic fluff or old news from prior publications, the meeting minutes are a source of some real nuggets of insight.”
Here are some further thoughts on the meeting minutes and the accompanying materials, some discussed in the article and some that are not.
1) Despite the Nuggets
My chief takeaway is that CMS spills a lot of ink to say relatively little. Yes, various “factors” are identified, but participants in the negotiation process were frustrated by the lack of structure—the failure to identify what the relative importance of a factor was. Without doubt, the rationales or the meeting minutes suggest, for individual products, that one or another factor was more important, but a reader does not emerge with a clear sense of whether or how CMS applied an organized structure.
The mantra in these justifications, over and over again, is that CMS applied the factors “holistically” and examined the “totality of the circumstances”. That’s cop out language, in part meant to insulate the agency from having to explain why the prices are what they are and how they related to each other (if they did).
2) Lawyered Up
The meeting minutes show, very clearly, that both CMS and the manufacturers consistently “lawyered up” at the meetings, reflectively the litigation overlay that implicitly colored and shaped the meeting agendas and the minutes—and contributed to the vague references to CMS’ decision-making being “holistic” in nature. It’s harder to attack a decision that is only vaguely explained.
3) Agreement?
In a further indication of the litigation overlay, where a core question is whether the resulting prices are genuinely “negotiated” or merely a price imposed by the government, the document can’t use the terms “agree” and “agreement” enough. You can see the hand of the lawyers in heavily editing the document so that it can serve as a litigation defense tool.
4) Hubris?
I found this statement contained in each justification to be the height of hubris:
"Throughout the negotiation process and in accordance with the IRA, CMS’ goal was to achieve agreement with the Primary Manufacturer on the lowest possible MFP for [insert drug] that would be consistent with the process defined in the IRA for these price negotiations. CMS believes that the agreed-upon MFP achieves this aim."
It's an amazing statement. CMS is patting itself on the back and saying that it achieved the “lowest possible MFP” for each product. The agency can’t believe that. It’s beyond disingenuous. Though some products were hit hard, others were not targeted as aggressively.
Why make this kind of silly statement?
It comes off as an attempt to take maximum political credit while still maintaining the litigation posture that the entire process ultimately leads to a “voluntary” agreed to price, for each and every product.
5) Therapeutic Alternatives
Defenders of the statute and CMS’ implementation of it seem very pleased with how CMS selected TAs as part of the price determination. Reflecting my contrarian nature, I found the TA discussions both helpful and counterproductive, by turn.
They were helpful, because, in a number of cases, the TAs listed suggested, perhaps, why some drugs probably weren’t hit as hard as others. Januvia, for instance, with 9 TAs, took the biggest cut from WAC, 79% off.
But that only goes so far. Fiasp had a single therapeutic alternative, but it still ended up 76% off of WAC, the second steepest discount off of WAC, probably reflecting pre-existing Part D concessions to plans. Xarelto, though with only 2 TAs in three indications and only 1 in a fourth, took a 62% shave off its WAC, well beyond the 25% statutory minimum concession and more than 15% beyond the estimated pre-negotiation pricing.
But the biggest concern about the TA discussions is that they risk being read by plans, PBMs, and providers, particularly 340B covered entities, with their huge spread incentives, as an invitation to switch patients off their negotiated price drugs in favor of high list/high rebate/high reimbursement alternatives. CMS’ TAs are a roadmap to a switching campaign.
I would have expected CMS to condition and cabin its discussion of the TAs to try to minimize the switch risk, but its efforts here were pretty anemic. Though there is some cautionary language, there isn’t much, and what’s there is tepid, entirely unlikely to dissuade plans, PBMs, and providers from embracing switches.
CMS weakly states: “CMS trusts”—yes, it actually uses the word “trust”—"that ... providers will continue to choose the therapy that best suits a given patient’s need”. But even that timid statement doesn’t speak—at all—to plans, PBMs, and their affiliated specialty and mail order pharmacies.
The same fine print does try to cabin the discussion to the use of the term “in this [Medicare Fair Price] context”, and the fine print also says that the TAs are not necessarily “interchangeable or otherwise universally appropriate to prescribe for an individual in place of” the negotiated drugs. Those, rather bland caveats are unlikely to stop economically interested stakeholders from waiving CMS’ justification about as the basis for a switching program.
6) More on the Meeting Minutes
Though there are real nuggets of information contained in the minutes, I was disappointed that they showed such limited focus by CMS on patient perspectives, a fact that some patient groups point to as validating their concern that patient input from the “listening sessions” was discounted and marginalized.
CMS repeatedly seems to take what was complicated, multi-faceted input from the listening sessions and reduces it, essentially, to a single sentence. It comes off as simplistic, more than a bit dismissive, and pro forma.
The pithy CMS “summaries” of patient input generally divide into two piles: 1) positive statements that were product specific and 2) statements about the need for multiple options or the like, but that did not specifically stress the value of the negotiated drug. The former may have helped some products, but not others. The latter pretty clearly did not help and seems to have been used by CMS to justify more aggressive pricing.
7) Wither the Physicians?
I was struck by how few physician attendees there were, on either the government or, to a lesser extent, the manufacturer side in meetings. Although the government included persons with pharmacy backgrounds, it never included a single physician, even in meetings where the agendas indicate that significant questions regarding unmet need, treatment in subpopulations, treatment challenges, and side effects of drug therapy were central issues. Cynics would say it’s a sign that clinical issues, despite the government’s insistence to the contrary, were secondary to economic considerations.
But I was surprised that manufacturers, though some did involve physicians, failed to do so more consistently. That may have impliedly projected a lack of confidence in their ability to make a case for a drug’s clinical differentiation.
7) Confidential and Proprietary?
Though a small point, one of the most interesting things about the attendees reflected in the minutes from an administrative law perspective is that some manufacturers appear to have taken the position that the names and titles of their attendees were proprietary and confidential, as that information is redacted in the minutes. Some others provided names, but not titles. Nyah goes into a far amount of detail in her article about this surprising little twist in the documentation.
8) Attendees
Middle and somewhat lower level personnel dominated the attendees on the government side. Some manufacturer reps felt that they were interacting with messengers and that the meetings were more theater than anything else, as a consequence.
Despite the (often frustrating) limitations in CMS’ documentation, there are nuggets here for “round 2” drugs to learn from. Nyah’s great article can be found at https://news.bloomberglaw.com/health-law-and-business/drug-industry-lawyers-experts-helped-shape-us-drug-price-cuts.