Comment Letter to CMS on IRA Price Negotiation Initial Guidance

The Robert J. Margolis, MD Center for Health Policy at Duke University (the Duke-Margolis Center or the Center) generates and analyzes evidence across the spectrum of health policy with the goal of improving health care, health, and health equity while avoiding unnecessary costs. A core mission of the Center is to focus on increasing the value of biomedical innovation to patients. As part of these efforts, we study the design, implementation, and feasibility of value-based payment (VBP) arrangements for medical technologies, which shift away from payments based on volume and promote payments based on the impact of the treatment. These approaches include payments linked to better evidence and outcomes, and “subscription” or population-based payments, for biomedical technologies, complementary to shifts in payments to health care providers that are similarly linked to improving outcomes and decreasing total medical expenditures. The suggestions below are informed by the Center’s experience and research in developing approaches to payment reform that support better evidence and outcomes for patients and better value across the system; in analyzing the impact of the current legal and regulatory environment on their adoption; and in working with multiple stakeholders to address the operational 2 challenges to their use. They are also informed by the collaborative work of the Center’s Value for Medical Products Consortium (the Consortium), and by the work of the Center’s Real-World Evidence (RWE) Collaborative, but may not represent the opinions of every member of these collaborations. Our Consortium and/or RWE Collaborative members are in many cases providing their own comments on behalf of their organizations.

Our comments reflect Duke-Margolis’s independent analyses of the Guidance and recent work undertaken by the Consortium and the Collaborative. Our recommendations describe opportunities for CMS to refine the Guidance in light of considerations related to RWE and the use of quality evidence, program integrity and transparency, and arrangements that align drug payments with their observed value. An overarching theme in our comments is the importance of implementing the Negotiation Program in a sustainable way for years to come despite the substantial requirements with limited time statutorily imposed on CMS. To this end, we suggest that CMS lay out a clear initial framework for how it intends to carry out MFP determinations while also describing a pathway for refinements over time as experience with the program grows beyond Price Applicability Year 2026. Specifically, our recommendations are for CMS to:

1. Implement a clear framework for assessing comparative effectiveness and translating such analyses to prices
2. As part of this framework, describe how real-world evidence development, including evidence related to additional indications, will impact CMS’s MFP determinations
3. Develop mechanisms to facilitate alternative payment arrangements for drugs that accomplish the intended goals of the IRA
4. Clarify how the manufacturer-specific factors will be used to guide the MFP, and collaborate to support accurate and efficient data collection
5. Clarify additional considerations for implementing the Negotiation Program 

Read the entire letter here.