August 1, 2022
The Honorable Charles Schumer
322 Hart Senate Office Building
Washington, D.C. 20510
Dear Leader Schumer:
The American Society of Gastrointestinal Endoscopy (ASGE), representing 15,000 gastroenterologists across the United States, calls on policy makers, both state and federal, to comprehensively address barriers that impede access to health care in this country. The cost of drugs, which inhibits patient access to prescribed treatments and contributes to growth in national health care spending and the cost of health coverage, requires a multi-faceted approach, including drug pricing reform.
Medicare Drug Price Negotiation
ASGE shares your goal of helping Americans better afford their health care and medications. Gastroenterologists treat disorders of the bowel for which biologics, oftentimes administered in the physician’s office and reimbursed under Part B, are the primary treatment. Therefore, any changes to the way in which Part B drugs are acquired and reimbursed will have a significant effect on gastroenterologists and their patients.
To ensure continued patient access to Part B drugs, we respectfully request a modification to the‘‘ Inflation Reduction Act of 2022.’’ While the legislation empowers Medicare to begin negotiating directly for the price of prescription drugs, it puts physician practices in a financially vulnerable position because they may not be able to purchase medications at the government negotiated rate, or “maximum fair price” (MFP). If the MFP is the basis for reimbursement for Part B drugs, but physician practices cannot acquire the drug at MFP or their “supply" was negotiated at a higher price point, the physician will refer the patient out of the office-based infusion suite to the hospital where it costs the Medicare program, and the patient, more.
ASGE suggests that drug manufacturers should be required to directly refund the government excess costs above the MFP, which will effectively exempt any pricing concessions from the Average Sales Price so provider payment rates are not artificially reduced. Even if physicians are removed from the middle, beneficiary cost-sharing could still be assessed against the MFP so they experience immediate savings.
If removing providers from the middle of the proposed MFP structure is not possible, then ASGE asks that Congress offset any reductions in reimbursement for office-based administered drugs by exempting Part B reimbursements from future sequestration reductions arising from the Budget Control Act of 2011 and subsequent extensions by Congress. This would help to close any gap between the acquisition price of drugs, the overhead but unreimbursed costs associated these treatments, and Medicare reimbursement.
Prescription Drug Cost Inflation
ASGE supports mechanisms to stem dramatic price increases of prescription drugs. Like many other drugs, the use of rectal indomethacin is becoming cost prohibitive for the prevention of post endoscopic retrograde cholangiopancreatography (ERCP) pancreatitis. In 1965, the Food and Drug Administration first approved indomethacin and in 1984 it was approved a suppository formulation.1 In 2005, the wholesale acquisition cost of a 100 mg dose was approximately $2. In 2012, when the effectiveness of rectal indomethacin for post-ERCP pancreatitis was demonstrated, the price had risen to $17. By 2019, the price was $340.2 Rectal indomethacin is a single-source drug, with the only alternative being to source rectal indomethacin from compounding pharmacies, which can raise concerns about medication quality and patient safety.
We appreciate the “Inflation Reduction Act of 2022’’ aims to stem rapidly rising increases in single-source drugs — especially those drugs, like rectal indomethacin, that have been used for decades and for which costs for research and development have long ago been recouped — by requiring drug companies to rebate back the difference to Medicare if they raise prices higher than inflation.
For years physicians have been caught in the middle of prescribing medicines and elaborate formulary and pricing schemes that contribute to higher health care costs and barriers to treatment. ASGE encourages a comprehensive approach to the high cost of prescription drugs, which should also include careful examination of practices by pharmacy benefit managers (PBMs). ASGE supports the Federal Trade Commission’s decision to study the business practices of PBMs. There is no transparency about how formulary decisions are being made, including whether rebate practices play a role. ASGE has encouraged the FTC to address anti-competitive conduct by drug manufacturers, PBMs and insurers, including rebates that drug manufacturers provide to payers or PBMs in exchange for market-share guarantees or preferred formulary placement.
The ASGE thanks you for your commitment to improving the affordability of prescription drugs. We hope you will consider our recommendations so our physician members can continue to conveniently provide the administration of Part B drugs in the office setting and do so at a cost savings to the health care system and to patients. Should you have questions or require additional information, please contact Camille Bonta, ASGE policy advisor, at 202-320-3658 or firstname.lastname@example.org.
Bret T Petersen, MD, MASGE
American Society for Gastrointestinal Endoscopy
1 Elmunzer BJ, Hernandez I, Gellad WF. The Skyrocketing Cost of Rectal Indomethacin. JAMA Intern Med. 2020 May 1;180(5):631-632. doi: 10.1001/jamainternmed.2020.0099. PMID: 32150228; PMCID: PMC7483935.