MedPAC finalizes recommendations for Part B drug payment policy

The Medicare Payment Advisory Commission yesterday finalized a package of recommendations for Congress aimed at reducing the rapid growth in Part B drug spending. The proposals would require all Part B drug manufacturers to submit Average Sales Price data; reduce Wholesale Acquisition Cost-based payment to WAC plus 3%; require manufacturers to pay Medicare a rebate when the ASP for their product exceeds an inflation benchmark and tie beneficiary cost-sharing and the ASP add-on to the inflation-adjusted ASP; and use a common billing code for a reference biologic and its biosimilar products. The commission also recommended creating and phasing in by 2022 a voluntary Drug Value Program, in which private vendors would negotiate lower prices for Part B drugs, not to exceed 100% of the ASP. Providers who enrolled in the DVP would buy and be reimbursed for drugs at the DVP-negotiated price and could share in any program savings. Providers choosing not to enroll in the DVP would face gradual reductions in the ASP add-on amount they are paid by Medicare. In a February letter to MedPAC, the AHA supported the commission’s increased focus on drug pricing but expressed concern that many of the proposals would unfairly penalize hospitals for price increases that are outside of their control.