Special Curve: Let's Tackle the CMS Price-Control Guidance!

Look, I know it’s an unofficial holiday today here in the United States (and a happy Canada Day, observed, to my friends to the north), but I feel like I need to tackle CMS’ revised guidance on how they’re going to implement price controls before I argue with my kid about fireworks.

There’s a lot to unpack.

First off, if you want to read the whole, 198-page CMS guidance, it’s here. If you’re caffeinated and must rush, the agency summarizes its changes over the first 8 pages of the document, so you can stop reading at that point. Or just check out the CMS press release here.

Then there’s about 75 pages of comments -- and responses to those comments -- which is worth the skim if you’re bored or a really fast reader. CMS summarizes the comments in Friday’s document, but they said they’ll be dropping the full text of all 7,000+ responses later this month.

There’s a ton of media coverage. Reuters, Endpoints, Yahoo and The Hill all have decent takes, though it’s hard to get your arms around the whole thing.

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After flipping through the guidance, the coverage and the reactions, I had five takeaways:

• The song remains the same. Nothing in the revised guidance changes the state of play meaningfully. The price controls are coming, and they’re going to look the way we thought they would. That’s not a surprise, but it is the single most important point here, so it’s worth making explicit.

• The lawsuits are very much top of mind. As a reminder, we have four (and counting) legal efforts to derail this process, and CMS used the revised guidance to shore up their position. This was especially pronounced around the First Amendment issues, where CMS rolled back a lot of the restrictions on what could be said about the “negotiations.” Indeed, those changes were probably the most meaningful ones in the new document.
  
  But CMS acknowledged -- and dismissed -- the Fifth Amendment “takings” argument, the “excessive fines” concern, the due process objection and the separation-of-powers problem, though CMS didn’t offer a particularly robust rebuttal to those elements.

• Passing the buck to Congress. On some of the most contentious issues, CMS took the stance that they were constrained by the language in the law and didn’t have any choice in how they approached things.
  
  That was especially evident in the discussion around the orphan drug provisions. The law exempts orphan drugs from price controls, but the moment a medicine gets a second orphan designation -- not an approval, mind you, just an FDA designation -- the exemption vanishes. CMS said that their hands were tied by the statutory language, which means that if there’s a fix to be had, CMS wants Congress to make it.

• Cleaning up loose ends. There are a lot of technical details that were unclear after the initial guidance, and CMS seems to have tried to address all of the holes that were flagged. There are still some interesting elements that are still undeveloped (I’m especially curious to see what CMS does to regulate formulary placement of price-controlled meds), but there seems to be slightly more clarity overall.
  
  As an example, CMS seems to have come closer to affirming that cell and gene therapies are (probably? mostly?) in the clear, though the agency used a wonderfully twisted, double-negative to make that point: “cellular and gene therapies are not categorically ineligible for the Plasma Derived Product Exclusion.”

• CMS is listening. It’s pretty clear that the agency is going to try to make up for a rushed and not-particularly-formal guidance-development process by opening itself up for lots and lots of meetings in an effort to be transparent and patient-centric. And while no one seems to object to that approach, it’s not clear exactly how all of that feedback will impact decision-making.

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As usual, I wouldn’t take my word for any of this if I were you. Here’s where others in the ecosystem are coming down. Please let me know who I’ve missed here, and I’ll update on Wednesday:

• PhRMA: the drug industry lobby called the revised guidance a “box checking exercise,” and suggested that transparency and patient-centricity was still in short supply.

• NPC: CEO John O’Brien has a piece on LinkedIn where he flags objections around the orphan drug approach and CMS’ narrow approach to value.

• BIO: BIO was mostly down with the transparency changes, but still concerned about orphan drugs and curious about CMS’ direction on formulary review.

• NORD: NORD is not happy about the orphan drug element, declaring the CMS’ thinking “threatens vital innovation.”

• Alliance for Aging Research: the Alliance has concerns that CMS -- even as it formally eschews QALYs -- will use the “equal value of life years gained” metric, which the Alliance opposes. But they’re happy that CMS is looking more closely at the definition of “unmet need.”

Have a safe Fourth, everyone!