Medicare changes could pain drugmakers

Nov. 30, 2018

The latest proposal from the U.S. Centers for Medicare and Medicaid Services (CMS) may widen the circle of drugmakers who will be negatively affected.

The proposed changes will let insurers use step therapies (step therapies grant patients access to more costly treatments only if they have previously had a poor outcome on a lower-cost therapy) or to drop protections on certain classes of drugs if price increases outpace inflation.

The new CMS proposal would leave HIV therapies as well as antidepressants and cancer treatments unprotected — so the top HIV manufacturers, Gilead and Glaxo, as well as makers of anti-depressants and antipsychotics like AstraZeneca, Pfizer, Allergan, Bausch Health, Lilly and Otsuka Holdings, may face new challenges.

The changes are part of President Trump’s promise to negotiate better deals for Medicare patients and create competition between drugs used to treat the same conditions. The proposals have yet to be finalized.

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