a; guru" f?w qt! I I DEPARTMENT OF HEALTH 3: HUMAN SERVICES Centers tor Medicare a Medicaid Services tame-an Administrator AUG '2 2915 Washington. oc 202m The Honorable Tom Price US. House of Representatives Washington, DC 20515 Dear Representative Price: Thank you for your letter and sharing your concerns about step therapy. The Centers for Medicare Medicaid Services (CMS) remains committed to Medicare and Medicaid bene?ciaries? continued access to needed prescribed medications a commitment that is also shared among the states. The purpose of this letter is to explain the application of step therapy within the Medicare Part program and to describe federal requirements related to state Medicaid prior authorization programs, including step therapy protocols. A Part plan sponsor?s Pharmacy 8r. Therapeutics committee must review for clinical appropriateness the practices and policies for formulary management activities, including step therapies. Formulary management decisions must be based on scienti?c evidence and may also be based on pharmacoeconornic considerations that achieve appropriate, safe and cost effective drug therapy. CMS reviews each Part plan?s bene?t annually, including step therapy protocols. In addition, step therapy protocols are reviewed throughout the plan year should any updates occur. These reviews validate that each plan offers robust access to medications across drug categories and classes. If necessary, an enrollee, an enrollee?s prescriber or an enrollee?s representative may request a formulary exception to obtain a Part drug that is subject to a utilization management restriction, such as step therapy, that the enrollee or enrollee?s prescriber believes should not apply. Coverage of prescription drugs is an optional bene?t in state Medicaid programs, though all ?fty states and the District of Columbia currently provide this bene?t. These states have entered into and have in effect rebate agreements; therefore, these states are required to comply with the requirements of section 1927(d) of the Social Security Act (the Act). While states have the discretion to establish certain limitations on the coverage of these drugs such as preferred drug lists and use of prior authorization processes, including step therapy such practices must be consistent with requirements of section 1927(d) of the Act to ensure appropriate utilization. The CMS encourages states to exercise sound clinical judgment and utilize available resources to determine their prescription drug coverage policies. These resources include committees, drug utilization review (DUR) boards and comparative analysis of the costs to treat patients in light of the efficacy. 0n art-annual basis, states are also required to report on their state?s prescribing habits, cost savings generated from their DUR programs and their program?s operations, including adoption of new innovative DUR practices through the Medicaid Drug Utilization Review Annual Report Survey. To access the FFY 2014 Annual DUR report, please visit Page 2 4 The Honorable Tom Price I hope you ?nd the information and clari?cation provided within this letter useful in administering step therapy protocols. If you have any questions: regarding this information, please contact the CMS Office of Legislation at 202-690-8220. I will also provide this response to the co?signers of your letter. Sincerely, Andrew M. Slayitt Acting Administrator @nngreaa at the l?nihzh ?ttings Washington. ?01 23515 June 8, 2016 Mr. Andy Slavitt Acting Administrator Centers for Medicare Medicaid Services US. Department of Health Human Services Room 445-0, Hubert H. Humphrey Building 200 Independence Avenue, SW. Washington, DC. 20201 Dear Acting Administrator Slavitt: The use of step therapy is common and growing among private and public payers. In 2013, 67 percent of employer sponsored health insurance plans reported that they had implemented step therapy policies, an increase from 27 percent in 2005. While we recognize that step therapy has at times been an effective practice that helps control costs throughout the healthcare sector, we want to ensure that the practice is not being used at the expense of patient health and well-being. In some instances, step therapy protocols may provide appropriate and affordable drug treatments, however, in some cases it could have the opposite effect. Prolonging ineffective treatment and preventing patients from starting treatments recommended by their physician or health care provider in a timely manner can lead to poorer health outcomes and increased costs for patients and the health care system. Too often, Federal policy focuses on short?term savings instead of long-term costs. The same is true of the healthcare system: early investments in preserving health can lower the long?term costs?especially for patients dealing with chronic diseases like rheumatoid arthritis, psoriatic arthritis, multiple sclerosis, diabetes, in?ammatory bowel disease, cancer and mental health, among others. In a study comparing Spending on schizophrenia medications in Georgia?s Medicaid program, step therapy saved the state $19.62 per member per month in pharmacy spending but these savings were accompanied by a $31.59 per member per month increase in expenditures for outpatient costs.i When patients receive the right medicine at the right time, as determined by their physician, there are reduced complications, fewer follow up visits, and potentially greater savings to the healthcare system. When implemented appropriately, step therapy can be an effective tool to ensure patients receive cost effective care. However, we should ensure that physicians have the ability to prescribe what they believe to be the most appropriate and effective medicine for each patient. Under your authority to oversee the Medicare program, we ask that you work to ensure that step therapy PRINTED ON RECYCLED PAPER protocols are open and transparent, do not create a barrier to access, and do not take prescribing power out of the hands of physicians. Sincerely= Leonard Lance Scott Peters Member of Congress Member of Congress Dan Benishek, MD. Mike FitzpatriclV Member of Congress Member of Congress Mike Cof?nan ?1 Emanuel Cleaver Member of Congress Member of Congress Morgan?rif?th Peter King Member of Congress Member of Congress Tom Price, MD. Member of Congress iFariev, J. et al., "Retrospective assesarnent of Medicaid prior authorization policy for atypical medications.? Clinical Therapeutics, 1524-1539, 2008.