Verma: CMS working 'fast and furious' on IPI drug pricing model, but doesn't say when it will be released

Seema Verma
Centers for Medicare & Medicaid Services Administrator Seema Verma said that an international price index model is a "top priority" for her agency but didn't give a date on when it will be released. (YouTube)

The head of Medicare and Medicaid said a demonstration project to tie Medicare Part B prices to those prices paid overseas is a “top priority” despite delays in getting out a proposed rule.

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma told reporters Thursday that “we are fast and furious on” getting out the proposed International Pricing Index (IPI) model.

Her comments come as other drug pricing initiatives by the Department of Health and Human Services (HHS) have been blocked or pulled.

“It’s a top priority for my department,” Verma said of the IPI model.

HHS released an advanced notice of proposed rule-making last October outlining the program that targets certain physician-administered drugs paid for under Medicare Part B. HHS had planned to release the proposed rule by this spring and start the demonstration program by spring 2020, but so far no proposed rule has been released.

Verma declined to comment on the timeline for when a proposed rule would be released.

Currently, Part B pays the average sales price for a physician-administered drug, and the agency gives the doctor or hospital 6% of that price for handling and storage costs. Under the proposal, CMS would instead pay an index price based on international prices, which are normally far cheaper, and give providers an add-on fee for storage and handling.

The proposal has generated major opposition from the pharmaceutical industry group Pharmaceutical Research and Manufacturers of America, which called it a “socialized” program. Hospital groups, however, have been generally favorable to the proposal.

Verma’s comments come after a series of setbacks to the Trump administration’s efforts to combat high drug prices that were outlined in a blueprint released in May 2018.

A proposed rule to eliminate the safe harbor for Medicare Part D drug rebates was withdrawn after White House concerns it would raise premiums for seniors. A federal judge last month also blocked an HHS rule requiring drug manufacturers to post list prices on TV ads.

But the U.S. Food and Drug Administration has provided some bright spots for HHS in the form of record approvals of generic drugs to increase competition.