Pharma Sector Rejoices As CMS Decision Unveils Major Regulatory Relief
94% of pharma execs adapt for regulatory changes. CMS delays rule on stacking discounts, seen as positive by Model N's Mendelsohn.
Breaking News
Jun 14, 2024
Mrudula Kulkarni
During the first half of 2024, Model N revealed that 94% of
pharmaceutical executives are making preparations to adapt their revenue
management programs for anticipated regulatory changes. Among them, 44%
expressed particular concern regarding the impact of these changes on Medicaid.
In May 2024, the Centers for Medicare & Medicaid
Services decided to delay implementing a provision of rule RIN 0938-AU28. This
provision would have mandated pharmaceutical manufacturers to aggregate
discounts and rebates when reporting the best price for the Medicaid drug
rebate program.Jesse Mendelsohn, a senior VP at Model N specializing in drug
pricing and compliance, views this as a positive development for the
pharmaceutical sector, given that the provision could have been highly
damaging.
Speaking ro Med Ad News, Mendelsohn said that “The Centers
for Medicare & Medicaid Services (CMS) made the right decision when it
announced it won’t finalize a proposed provision that would have required
manufacturers to stack discounts and rebates given to unaffiliated purchasers
when reporting best prices for the Medicaid drug rebate program,” Mendelsohn
told Med Ad News.He also said that “The provision, combined with the recent
removal of the average manufacturer price cap on the unit rebate amount
calculation, would have put many manufacturers ‘underwater’ in Medicaid –
they’d be paying more in rebates for certain products than what they actually
collected from the sale. This revenue loss may have forced manufacturers to
leave Medicaid altogether, creating significant hardship for program enrollees
who depend on these often life-saving therapies.”
Mendelsohn further added, “The legality of the provision
aside, the rule simply didn’t add up. In practice, stacking discounts granted
to completely different and entirely unaffiliated purchasers would have created
an unreasonable price point that no single customer would have actually
received. CMS stated that it intends to collect more information from
pharmaceutical companies on pricing calculations before proposing such changes
in the future. Again, this is a positive development. Close collaboration between
manufacturers and policy makers will ultimately lead to greater compliance with
regulations and better price outcomes for consumers.”