Protect Patient Access to Medication

Dear Member of Congress,

We, the undersigned organizations, are writing to express opposition to proposals that would allow the Secretary of Health and Human Services (HHS) to interfere in private negotiations in the Medicare Part D program. We are concerned that such proposals could undermine Part D’s competitive structure and restrict access for millions of seniors and individuals with disabilities. Our organizations are the voice for millions of people, many of whom have serious and life-threatening chronic conditions, their caregivers, and people with disabilities who depend on the Part D program.

Medicare Part D’s competitive structure has been critical to the program’s success. Notably, Medicare baselines from the Congressional Budget Office (CBO) show that total Part D costs are nearly $350 billion less than the initial 10-year cost estimate.  Additionally, Part D spending, including both brand and generic drugs, made up only 11.8 percent of Medicare spending in 2015. CMS once again announced this year that average monthly premiums will be relatively stable at $34 in 2017, and a recent Medicare Today survey shows that nearly 90 percent of beneficiaries are satisfied with their coverage.

When Part D was created, the intent was to have robust Part D plan competition and negotiation to drive substantial savings for beneficiaries. As a result, Congress included a provision known as the “non-interference” clause. The provision prohibits the HHS Secretary from participating in the private price negotiations between Medicare Part D plans, drug manufacturers and pharmacies. Instead, Part D plans negotiate substantial discounts and rebates with drug manufacturers as a condition of participation in the program.

The Medicare Trustees report shows that these rebates are substantial and that average rebates have increased each year of the program. Additionally, a recent study by IMS, a leading global information and technology services company, showed that negotiated rebates and discounts in Part D average 35 percent across 12 widely used therapeutic areas, and CBO has stated that Medicare Part D plans “have secured rebates somewhat larger than the average rebates observed in commercial health plans.” The Government Accountability Office (GAO) has also reported that Part D plans lower costs for beneficiaries, “through their ability to negotiate prices with drug manufacturers and pharmacies.” These privately negotiated savings are passed through to beneficiaries in the form of lower premiums, deductibles and cost-sharing.

Some suggest allowing government interference in Part D might constrain Medicare cost growth. However, CBO has repeatedly said that this approach would have a negligible impact on federal spending unless the department of Health and Human Services also limits beneficiary access to needed prescription medications. Such restrictions could include a single, national formulary for Part D plans and increased reliance on step therapy or fail first policies, which could have a harmful impact on the people we represent.

Restricting access also means that Medicare Part D beneficiaries may not take the medicines they need. Taking medicines as prescribed can improve health outcomes and help to avoid costly ER visits and hospitalizations. For example, a 2014 study by researchers at Johns Hopkins University and the University of Illinois found that gaining prescription drug coverage through Part D was associated with an 8 percent decrease in hospital admissions for seniors and about $1.5 billion in aggregate savings to the Medicare program each year. Proposals that limit beneficiary access to needed medicines could contribute to higher costs in other more expensive healthcare settings while also unnecessarily harming beneficiaries’ health.

We believe that repeal of the non-interference provision could jeopardize beneficiaries’ access to comprehensive, affordable prescription drug coverage and would undermine the structure of a highly successful program upon which millions of people rely. We urge you to listen to the voice of patients and reject any proposals that would allow government interference in Part D negotiations.

Sincerely,