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Medicare Monday: 3 reasons why repealing Part D’s noninterference clause is a bad idea

Nicole Longo   |     June 26, 2017   |   SHARE THIS

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A number of proposals have been thrown around as part of the health care debate. One idea is to repeal the noninterference clause in Medicare Part D. Doing so would allow the Secretary of Health and Human Services (HHS) to intervene in the private negotiations that take place between Part D plans and drug manufacturers. However, there are a number of flaws with that idea. Take a look:

  1. Broad agreement the Secretary of HHS could not negotiate lower prices. The Congressional Budget Office (CBO) has repeatedly found that “the Secretary would be unable to negotiate prices across the broad range of covered Part D drugs that are more favorable than those obtained by (Prescription Drug Plans (PDPs)) under current law.” And the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) has come to the same conclusion.
  1. Achieving savings only comes at the expense of restrictions on beneficiaries’ access to medicines. Kaiser Family Foundation, in a report examining such proposals, stated that “Beyond simply removing the non-interference clause and allowing the Secretary to negotiate drug prices, CBO has said that in order to obtain price discounts, the Secretary would need authority to establish a formulary that included some drugs and excluded others and imposed other utilization management restrictions … .” And as STAT News explained last year, “There’s a basic trade-off that any proposal would have to grapple with: To have any real effect on drug prices, Medicare would have to be able to say ‘no’ to drugs that might be expensive, but are still badly needed by people with chronic conditions.”
  1. Government negotiation would disrupt the already robust negotiation and competition that takes place in Part D. Such proposals overlook the way the program currently works and how substantial negotiation is helping keep costs low for beneficiaries. The Medicare Trustees have consistently stated that rebates negotiated for brand medicines in Part D are substantial and have increased each year of the program. And a QuintilesIMS Institute report found that Part D plans receive an average discount of 35 percent from list prices across 12 widely used therapeutic areas.

In case you missed it, more than 300 groups sent a letter to Congress in February to raise concerns with this harmful proposal. It’s important to find ways to build on Part D’s success, not undermine a program that over 40 million beneficiaries rely on for access to medicines.

Nicole Longo

Nicole Longo Nicole is director of public affairs at PhRMA focusing on Medicare, 340B, importation and more. She previously worked for a D.C.-based public affairs firm where she assisted a wide range of clients with communications efforts on everything from trade policy to agriculture policy to health care policy. Outside the office, Nicole can be found trying new restaurants (usually Italian), taking an occasional barre class and cheering on the Cincinnati Bengals.

Topics: Part D, Medicare, Medicare Monday

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