Medicare Monday: Stakeholders raise concern with MedPAC’s proposed changes to drug purchasing program

Nicole Longo
Nicole Longo April 24, 2017


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A couple weeks ago, we looked at what a broad group of stakeholders have said about the recommended changes to Part B that the Medicare Payment Advisory Commission (MedPAC) voted in support of. But this week, we wanted to examine one proposed change a bit more.

MedPAC has proposed creating the “drug value program,” essentially a redesign of the competitive acquisition program that the Centers for Medicare & Medicaid Services piloted in Part B from 2006 to 2008. MedPAC offered this proposal in an attempt to make Part B more competitive. But this proposal includes several elements that would actually impede a competitive market, including a binding arbitration process to set prices for new drugs, government price controls and, for the first time, imposing access restrictions for patients.

A number of groups have called attention to the dangers of this proposal in particular. In a letter to MedPAC, nearly 200 patient and provider groups said “the MedPAC proposal to create a new ‘Drug Value Program’ leaves a number of critical questions unanswered, and as proposed could harm patient access by imposing new restrictions on Part B therapies.”

The Community Oncology Alliance points out, “There are numerous problems with the Part B Drug Value Program (DVP) outlined in the MedPAC draft recommendations [… ] the idea of creating a formulary to artificially induce competition in price negotiations, administered by a third party PBM-type entity, is simply reckless. This would create obstacles to Medicare beneficiaries receiving the most appropriate cancer therapy available as decided by the physician and patient – not some corporate, profit-seeking PBM-type entity.”

Additionally, Amy Bricker, a MedPAC commissioner and vice president of supply chain strategy & product development at Express Scripts, raised concerns with the “drug value program” proposal, telling Modern Healthcare, “For me, it’s a bridge too far [ … ] There is a way for us, I believe, to foster competition, to bring value to the market without adopting something as drastic as this.”

Stakeholders from across the health care sector agree: MedPAC’s proposal would make Part B less market based and reduce access to treatment for beneficiaries with serious conditions.   

Topics: Medicare, Medicare Monday, Part B