Feds back off proposed rule changes for Medicare drug benefits

CMS has abandoned a proposal to bolster rural pharmacy access

CMS Administrator Marilyn Tavenner in a letter sent to lawmakers on Monday wrote that the agency would not finalize several proposed rule changes to the Medicare prescription drug benefit.

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Under the proposal, FDA would be authorized to participate in negotiations between insurers and pharmacies. The rule also would expand plans' preferred networks to include more pharmacies, limit plan bids within a region, and reduce the number of "protected class" drugs.

Federal health officials argued that the proposed changes would help control costs and improve access for beneficiaries. However, critics of the proposal claim it would compromise access to needed medications without saving much money.

The proposed changes garnered widespread criticism, including letters from a bipartisan group of Democrats and Republican lawmakers on the Senate Finance Committee, the U.S. Chamber of Commerce, and a coalition of more than 200 organizations representing seniors, insurers, patients, businesses, and drugmakers.

CMS dropping four proposed rules

In her letter, Tavenner wrote that the Obama administration would not pursue four of the proposed changes, including one that would reduce the number of protected drugs and another that would let insurers offer no more than two prescription drug plans to Medicare beneficiaries in the same region.

In addition, the agency is not going to finalize a proposal that aimed to bolster rural pharmacy access by requiring insurers to offer contracts to any retail drugstores willing to accept insures' terms and conditions, as well as another proposal that would have permitted the federal government to participate in negotiations between insurers and pharmacies.

Tavenner wrote, "Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time." She added, "We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years."

Several proposals will remain

Tavenner said CMS still will finalize some of the proposals, including efforts to bolster consumer protections and antifraud provisions, both of which have bipartisan support. In addition, the administration still intends to finalize a proposal that would ensure access to care in cases of natural disaster.

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According to the Wall Street Journal, Tavenner's announcement was "cheered" by many patient advocacy groups, insurers, lawmakers, and providers. Senate Finance Committee Chair Ron Wyden (D) said the decision was "good news and shows that the administration shares our concerns about potential disruptions for seniors enrolled in the Medicare prescription drug program."

Healthcare Leadership Council President Mary Grealy said the group "applaud[s]" Tavenner "for the agency's sound judgment on this issue." A spokesperson for the American Cancer Society's Cancer Action Network added, "The decision will help ensure our nation's seniors continue to have access to the prescription medicines they need" (Pear, New York Times, 3/10; Morgan, Reuters, 3/10; Corbett Dooren, Wall Street Journal, 3/10).

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