HHS Secretary Alex Azar and CMS officials are leaning against letting Massachusetts use closed formularies to negotiate cheaper brand drug prices in Medicaid, lobbyists following the MassHealth proposed waiver said. Azar worries drug makers would sue the government and win if CMS were to approve the waiver, a brand drug source said, and others say CMS officials are wary of creating de facto national policy because most other states would follow Massachusetts' lead.
Massachusetts is the only state to formally ask for permission to waive the requirement that states cover all drugs for which manufacturers agree to at least 23 percent Medicaid rebates. CMS' handling of that request is anxiously awaited by officials in all states, and if Massachusetts is allowed to use closed formularies, many other states would likely follow suit. Arizona officials already said they're interested in the idea, but state officials haven't proposed a waiver.
Massachusetts' HHS press shop did not respond for this article, and Arizona Health Care Cost Containment System Public Information Officer Heidi Capriotti said negotiations with CMS have not begun.
Unlike in other states, the Massachusetts legislature would have to approve the waiver if CMS agrees to it, and state lawmakers signaled they oppose it, so the significance of a CMS approval would be the message to other states that they could restrict drug coverage to save money.
Drug makers and patient advocates are lined up against the proposal.
CMS last year encouraged states to align Medicaid design and benefit structure with private insurance, and the MassHealth request emphasizes that private insurance uses closed formularies. However, sources say Azar is likely loath to walk back a waiver once it is approved due to a court fight and would rather propose practical solutions. Similarly, other sources say CMS officials don't want to open the flood gates for Medicaid closed formularies without going through a public comment process. However, waivers are meant to test policies on a small scale, and Massachusetts gathered public comments before submitting the waiver.
Azar has been pressuring plans to share drug rebates with their customers, and on Tuesday (March 27), Aetna became the second insurance company to announce it will voluntarily apply pharmacy rebates at the point of sale for its commercially fully insured members.
“Glad to see @Aetna lowering drug costs for patients and families. #Transparency is key to lowering healthcare costs and putting Americans in charge of their own care,” Azar tweeted following the announcement. -- John Wilkerson (jwilkerson@iwpnews.com) and Amy Lotven (alotven@iwpnews.com)