IRA Implementation Must Value Transparency and Stakeholder Input to Meet Its Goals

It’s no hyperbole to call the implementation of the Inflation Reduction Act the most significant prescription drug pricing intervention in the 57-year history of Medicare.

Implementation of the “price negotiation” process is being closely followed by those who invest in, research, and develop new treatments and cures. It is also being monitored by the coterie of health policy experts, pharmacoeconomic researchers, and patient advocates, among others.

It is our hope that CMS sets guidance that, to every extent possible, incorporates stakeholder input and minimizes the deleterious impact of the IRA on the incentives for the development of innovative therapies as well as patient access. Unfortunately, we believe the released guidance sets a course down the wrong path. CMS gave the opportunity for outside stakeholders to submit comments on the recently released IRA implementation guidance, and NPC took the opportunity to highlight our concerns .

In our comments, NPC proffers refinements to CMS’s guidance that would support the IRA’s stated goal of providing financial relief for Medicare patients without harm to the pharmaceutical development that has propelled our society forward for centuries. Notably, the price-setting mechanism described in the guidance lacks clear standards for the evidence that will be used in the process and the transparency necessary for the public to reproduce or evaluate CMS’s decisions. It also minimizes the opportunity for patients, providers, and other clinical experts to inform and participate continuously in the process. We believe the process is built on a foundation prone to perverse incentives and opportunities for potential payment errors, if not fraud and abuse.

Time and again, our research has found that public policies that reduce the incentives to invest in R&D result in fewer treatment options in the future , leading to poorer health outcomes and lower life expectancy. A new price-setting mechanism implemented in this manner could drastically change the economic incentives for bringing new medicines to market, and evidence suggests manufacturers are already negatively responding this shift.

CMS is making significant changes to Medicare policy and, though important legal questions remain, has a statutory requirement to implement a complicated process at a relatively rapid pace. In the interest of preserving patients’ access to medicine – and the innovation ecosystem that creates new medicines – we encourage CMS to take the time needed to consider stakeholder input and build a transparent and consistent process for this new policy.?