Addressing Critical Ambiguities in CMS’s Drug Evaluation Process 

The Administration has kicked off the Inflation Reduction Act’s (IRA) Medicare Drug Price Negotiation Program with the release of the first list of drugs selected for evaluation, and the list of outstanding questions is quite long. With the stakes and the complexity of the drug evaluation high, it is understandable to wonder how the plane is taking off with so much uncertainty. 

Career staff at the Centers for Medicare and Medicaid Services are working hard, but the outstanding questions are critical to implement the price-setting provisions in a way that attempts to accurately value medicines and, as best as possible considering the flaws of the IRA, maintain patient access to innovative treatments.   

In the National Pharmaceutical Council’s comment letter to CMS about the proposed guidance, we highlighted many of the areas of significant and impactful uncertainty. Even after the revised guidance issued in July, many questions remain, including regarding the selection of therapeutic alternatives, the framework for the evaluation process, standards for evaluating evidence quality, and patient input. Let’s examine several of the critical issues. 

  
Selection of Therapeutic Alternatives  

The IRA instructs CMS to consider “the extent to which [a selected drug] represents a therapeutic advance as compared to existing therapeutic alternatives.” In any evaluation of the relative clinical or economic benefits of a drug, the choice of the comparator is a fundamental driver in the outcomes and validity of the assessment.

In our comment letter, NPC recommended the choice of therapeutic alternatives be driven by clinical appropriateness, informed by current treatment practices among a relevant patient population, with the same treatment modality and class as the selected drug, rather than be dictated by cost.  Our recommendations align with past NPC research through our ISPOR-AMCP-NPC modeling comparative effectiveness research Task Force, as well as other published best practices and the Agency for Healthcare Research and Quality’s guidance for comparative effectiveness research.  

Looming questions remain about the way in which CMS will consult with and incorporate feedback from patients, the FDA, clinicians, academic experts, and manufacturers when identifying appropriate therapeutic alternatives.  

Furthermore, because a therapeutic alternative must be selected for each indication of the selected drug, the Agency now faces the task of selecting therapeutic alternatives for three dozen adult indications in the ten drugs identified for selection for initial price applicability year 2026. Notably, CMS does not highlight the selection of therapeutic alternatives as a priority for input during its patient listening sessions; CMS has identified that it will be most interested in receiving patient-focused input surrounding clinical benefit, unmet need, and drug impact on specific populations from those sessions. 

NPC will continue to examine the considerable uncertainty that remains in CMS’s process for selecting therapeutic alternatives given the importance of this issue. 

Framework for Evaluation Process 

 The IRA statute requires CMS to use a “consistent methodology and process” for negotiation. In NPC’s comment letter, we urged CMS to provide more clarity related to the initial offer determination, encouraging the Agency to create and publish a decision-making framework both generally and for selected drugs.  Looming questions remain more around not only how CMS will define when a selected drug represents a therapeutic advance over its comparator but also how the Agency will assign a price premium to such a therapeutic advance.  

Such clarity is essential for manufacturers and other stakeholders to meaningfully participate in the evaluation process, and information about how CMS will make decisions should be well-known before CMS begins its process.   

While CMS acknowledged public comments on the need for additional detail, in the revised Guidance the Agency doubled down on its vague approach, retaining language from the initial Guidance that the Agency will “consider applicable evidence and other input collectively.”   

CMS further stated that the “concise justification” provided to the manufacturers alongside its initial offer will help the manufacturer understand the range of evidence and other information that the Agency found compelling; however, CMS does not plan on issuing a template for the initial offer or the concise justification.   

The public explanation of the maximum fair price (MFP) remains similarly vague, with limited detail provided on the content or structure of CMS’s narrative explanation of the negotiation process or the redacted information the Agency will publish. How clinicians are supposed to interpret what is in the public explanation is also uncertain and a potential troubling consequence of the vague process.  

NPC included in our comment letter robust references to best practices for drug evaluation; our own research on patient-centered drug evaluations and comparative effectiveness research and that of leading academics, professional organizations, and patient advocacy organizations.  

Given the inherent limitations in value assessments, NPC continues to encourage CMS to review and use published guiding principles, where appropriate for Medicare, to ensure the transparency, validity, and credibility of the process.  

Evaluating Evidence Quality

Evidence on the benefit of a selected drug and its therapeutic alternatives can be of varying quality and certainty, and the findings from individual studies can conflict with each other.   

The results of a drug evaluation depend on the evidence that underlies it, and the burden is on CMS to use and develop evidence in a systematic, transparent, and robust manner.   

In our comment letter, we encouraged CMS to develop robust, transparent standards for both submitted and internally generated data to ensure that evidence is methodologically rigorous.   

CMS’s standards for evaluating evidence quality should be informed by accepted methods used to evaluate quality and certainty of evidence and determine how to handle conflicting evidence.   

Specifically, we encouraged CMS to inform their evidence standards graded rubrics that are fit for purpose and appropriate for the type of evidence, including health economic information, observational studies in epidemiology, and observational studies of comparative effectiveness.   

While CMS acknowledged our comments and those of others requesting additional detail on how evidence would be evaluated and prioritized, they referred readers back to the limited considerations provided in the initial Guidance and offered no new insight into their process in the final Guidance.   

Not following widely accepted scientific best practices erodes trust in the process particularly in a field without consensus about the right combination of inputs. To maximize credibility and trust in the assessment process as they build it, CMS needs objective, systematic, transparent procedures for identifying and including evidence.   

Unfortunately, we are left with more questions than answers on the Agency’s approach to evaluating evidence quality.     

Getting Patient Input Right   

NPC previously wrote about some of the uncertainty surrounding the approach to gathering patient input. While more details have emerged about the timing and structure of the patient input sessions, we still are seeking greater understanding around how that patient input collected will inform and influence each stage of the drug evaluation process. As we wrote:  

“In NPC’s comments to CMS regarding the initial guidance, we pointed out that the patient voice is needed to inform the evaluation of unmet need; the identification of treatment alternatives that are both clinically appropriate and satisfactory to patients; and the evaluation of the clinical and humanistic benefits of a selected drug. Patient input on clinical benefits should identify what benefits are most important to patients and capture benefits – including those to society – not captured in conventional measures of health gain. These are sometimes referred to as “novel elements of value”…   

As CMS begins this process with this list, it will be critical that they use evidence-based best practices for meaningful patient engagement that ensures they are receiving comprehensive and representative information directly from patients.”  

As all eyes turn from the list of drugs to what’s next in the process, NPC will continue to share research and insights on these questions and others related to the implementation of the IRA. There is much more we will learn, and much more to watch and provide feedback on, as the process continues. We hope that the Administration will be more forthcoming and transparent about how it plans to approach these complex issues.