Medicare’s new step therapy program’s a step in the right direction

Medicare’s new step therapy program’s a step in the right direction
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Americans pay too much for their medications — and President TrumpDonald John TrumpPapadopoulos on AG's new powers: 'Trump is now on the offense' Pelosi uses Trump to her advantage Mike Pence delivers West Point commencement address MORE’s prescribing diverse remedies for this complex and troubling malady.

His administration’s been acting expeditiously on several fronts, as is necessary for a multifactorial problem that encompasses health-care policy, pharmaceutical regulation, and even trade policy.

As a physician who has cared directly for patients for two decades, worked with the pharma industry, served in Congress, and been a patient, I appreciate the scope and magnitude of the challenge we face — and I can vouch for the very high quality of the president’s team leading the effort to transform our pharmaceutical marketplace.


The key principle guiding the transformation is quintessentially American: to reduce costs and increase the quality and diversity of therapeutic options, increasing choice and competition is far preferable to imposing government dictates. As in any other field of endeavor, markets and empowered consumers provide the best and fairest way to determine prices and incentivize innovation.

At the Food and Drug Administration, Commissioner Scott Gottlieb is accelerating access to new therapies by removing barriers and streamlining processes. This will bring more rapidly and inexpensively to market not only entirely novel molecules, both small (what we think of as “drugs” in common parlance) and large and complex (“biologics”), but also generics and biosimilars, created to replicate the structure and/or effect of existing drugs and biologics at lower cost. Enlarging and speeding up the pipeline for medications is crucial to a healthier marketplace — figuratively and literally.

At the Department of Health and Human Services, Secretary Alex Azar and his colleague Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS), have outlined their plans for the massive federal programs that determine so much of what happens with the nearly half-trillion dollars Americans spend each year on medications.

They’re tackling the middlemen who can add layers of costs between manufacturers and patients; they’re eyeing ways to keep foreign countries from paying less for drugs and biologics on the backs of U.S. consumers and taxpayers; and they’re facilitating new means of helping Medicare patients benefit from competition and negotiation to cut prices.

On Aug. 7 Secretary Azar announced that 20 million Americans —about a third of Medicare beneficiaries — who participate in Medicare Advantage plans will now have opportunities to pay less for their medications in ways that weren’t available in the past. For the first time, medications that are covered by Part D of their Medicare plans — medications that can be taken at home — will be able to “compete” with medications that are covered by Medicare Part B, which are typically administered in a doctor’s office or a hospital rather than at home.

One way to think about this is that heretofore the two lists of drugs and biologics, from Part D and Part B, couldn’t be played against each other. Now, if you’re a Medicare Advantage beneficiary, they can be: if your doctor determines that a medication from Part D would be just as good as a more costly alternative from Part B, you and your doctor will be allowed to try the less expensive one as a first step. CMS refers to this as “step therapy,” with further steps to be made available beyond the first one as needed.

To ensure that patients benefit from both the stepped medication choices and the savings, CMS is requiring Medicare Advantage plans to create for their enrollees care-coordination programs that will both optimize the quality of therapy and use financial incentives to reward participation. Patients will have the information and guidance they need to succeed with this new option (they can also choose not to try it at all), and they’ll also be able to work with their doctors to try more expensive medications if those would be better for them.

CMS is going to be looking closely at how well this new initiative works once it’s in place next year. Some providers and scholars have expressed concern that step therapy may delay optimal treatment and thereby increase costs, but there’s solid basis for confidence: CMS is empowering providers and patients to use their best judgment regarding how to manage the steps, while benefiting from having a larger selection of competing options.

For America’s patients, CMS’s new program is definitely a “step” in the right direction, and the latest of many healthy decisions by a Trump administration determined to cure the high price of medications not by dictating to the markets, but by empowering consumers.

Nan Hayworth M.D. is an ophthalmologist and former Congresswoman for New York's 19th congressional district. She is a member of the board of directors of the Independent Women’s Forum and the chairman of the board of directors of ConservAmerica.