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ASHP Comments on the Advanced Notice of Proposed Rulemaking: International Pricing Index Model for Medicare Part B Drugs

Centers for Medicare & Medicaid Services

December 20, 2018

[Submitted electronically to]
Ms. Seema Verma
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-5528-ANPRM
P.O. Box 8013
Baltimore, MD 21244-1850

Re: Advanced Notice of Proposed Rulemaking, International Pricing Index Model for Medicare Part B Drugs [File code CMS-5528-ANPRM]

Dear Ms. Verma:

ASHP is pleased to submit comments to the Centers for Medicare & Medicaid Services (CMS) on the advanced notice of proposed rulemaking on a novel payment model for Part B drugs and biologicals (“IPI Rule”). ASHP represents pharmacists who serve as patient care providers in acute and ambulatory settings. The organization’s 45,000 members include pharmacists, student pharmacists, and pharmacy technicians. For more than 75 years, ASHP has been at the forefront of efforts to improve medication use and enhance patient safety.

ASHP’s comments on the IPI Rule are categorized as follows: General Comments, Impact on the Drug Supply Chain Security Act (DSCSA), Recommended Exemptions from the IPI Rule, Measuring Value, and Scope of Implementation.

General Comments

 ASHP, as a member-driven organization and a lead member of the Steering Committee of The Campaign for Sustainable Rx Pricing (CSRxP), has long recognized that the current rate of growth in prescription drugs is not sustainable. We are committed to developing bipartisan, market-based solutions that promote competition, transparency, and value to improve affordability while maintaining patient access to innovative prescription drugs that can improve health outcomes and save lives.

Based on our current assessment of the proposed regulation, we do not believe that the IPI Rule in its current form achieves these goals. As currently written, the IPI Rule does not directly alter drug prices, would further complicate an already complex drug distribution system, would create additional financial and workload burdens on providers, and could potentially limit access to care.

The IPI Rule would dramatically reduce provider reimbursement for Part B medications based on a reference price set in a foreign country. It is important to note that, unlike the United States, single-payer structures exist within other countries, allowing for greater leverage to negotiate price. In addition, these reimbursements, if imposed in the United States, were derived absent any clinical decision-making made by the provider under Medicare Part B.

The model also sets a risky precedent for other healthcare providers and services. If Medicare uses foreign price controls to determine reimbursement for physician-administered drugs, CMS could apply the same principles to other services such as medical devices, physician services, nursing care, diagnostic tests, or mental health and substance use disorder specialists.

Impact on the DSCSA

 The pharmaceutical supply chain involves a complex interaction between multiple stakeholders to ensure that medications are available at the location and time required for patient care. Over time, the supply chain has evolved to a point where providers must interact with an increasing number of stakeholders to acquire drugs. The IPI Rule creates a vendor who would take title to and assume the expense on behalf of providers for the Part B drugs included in this program. Introduction of an additional party to this process for a subset of drugs would further complicate an already complex process.

The IPI Rule, as drafted, threatens the progress already made in developing a more secure supply chain as defined by the DSCSA. In November 2013, Congress enacted the Drug Quality Security Act (DQSA), including Title II, the DSCSA. The legislation was passed in response to concerns that the pharmaceutical supply chain was vulnerable to drugs that may be counterfeit, stolen, contaminated, or otherwise adulterated. The goal of the law was detection and removal of these aforementioned drugs through an electronic and fully interoperable system. The basic structure of this process involves creating and exchanging transactional data that identifies each entity that takes ownership and title over the product throughout its lifetime in the supply chain. These entities are required to furnish these data when selling product to another partner. Under the proposed rule, however, the vendor supplies, but does not sell, Part B drugs to a provider. Thus, under the rules of the DSCSA, the vendor would remain legally obligated to ensure the integrity of the product despite the fact that the vendor would no longer maintain ownership over the drug. Furthermore, this would substantially disrupt the mechanisms to prevent the introduction of counterfeit and/or contaminated products.

Impact on Increasing Fragmentation of Patient Care and Safe Medication Management

 CMS is proposing a model that may reduce provider reimbursement, although these providers have no control over the price of prescription drugs. Adequate reimbursement is necessary to support compliance with federal regulations, including CMS’s Conditions of Participation (COPs), standards for patient safety and quality of care (e.g., United States Pharmacopeia, The Joint Commission (TJC), and The National Institute for Occupational Safety and Health).

The lack of uptake of the Competitive Acquisition Program (CAP) for Part B drugs should give CMS caution to, at a minimum; consider pilot programs for any future payment models. To establish a model that would require hospitals to store patient specific prescriptions or ‘consignment’ medications from a vendor could compromise patient safety and create additional burdens on both patients and providers.

Recommended Exemptions from the IPI Rule

As is the case in virtually all regulations dealing with pharmaceuticals, one policy does not fit all situations. Below we outline a number of instances in which the IPI Rule should not apply.

Drugs purchased under the 340B Drug Pricing Program: ASHP requests that drugs purchased under the 340B drug discount program be completely exempt from this proposal. Because Part B drugs currently purchased under the 340B program would be subject to the model outlined in the IPI Rule, the rule removes any opportunity for hospitals to generate significant 340B savings from such Part B drugs

Drugs in short supply: ASHP recommends that pharmaceuticals in shortage be exempt from the model proposed in the IPI Rule. Drug shortages are an ongoing public health concern in the United States. The drug supply chain is vulnerable to shortages of lifesaving medicines needed for both routine and specialty care. Medications in shortage typically include essential sterile injectable products. Shortages of critical drugs and biologics can pose a significant public health threat, delaying, and in some cases even denying, critically needed care for patients. Shortages can prevent patients from receiving first-line treatment, force clinics to delay therapy or ration care, and lead to adverse drug events. ASHP urges CMS to identify how the vendor will handle drugs in short supply. How will the vendor guarantee an allocation of supply into contracts to mitigate or avoid drug shortages

Compounded drugs: ASHP recommends that drugs compounded and supplied by a 503B outsourcing facility be exempt from the terms of the proposed rule. ASHP advocates for a strong compounding framework that first and foremost emphasizes safety and quality. We believe that a robust 503B outsourcing facility program is essential to realizing the goals of the DQSA. For many of our members, 503Bs are a vital link in their pharmaceutical supply chain, especially during drug shortages and for specialized dosage forms that are not commercially available. Compounded medications are exempt from the requirements of the DSCSA and should continue to be treated outside of the traditional supply chain and not be subject to the IPI Rule

Measuring Value

Another important distinction between how prescription drugs are evaluated here and abroad is that most foreign nations take into account comparative effectiveness analyses of medications to assess their value relative to outcomes, and then use those results in their negotiations with manufacturers. In the United States, there exist numerous nongovernmental entities that conduct comparative effectiveness studies or examine the concept of value based contracting. We believe that efforts to decrease drug cost should begin not with adoption of prices from abroad but rather with pharmaceutical manufacturer prices and the value of outcomes relative to acquisition costs.

Scope of Implementation

ASHP suggests that, initially, participation in the framework be voluntary in nature or, at a minimum, the scope of those providers subjected to the plan be limited to a pilot or pilot programs. There should also be careful consideration any unintended consequences such as higher prices and/or fees charged to non-Medicare Part B providers to cover any potential Medicare Part B losses.
Thank you for consideration of our comments. We continue to support CMS’s efforts to improve patient care and reduce patient costs, and we stand ready to assist the agency in any way possible. Please contact me if you have any questions about ASHP’s comments on the proposed rule. I can be reached by telephone at 301-664-8806 or by email at


Christopher J. Topoleski
Director, Federal Legislative Affairs