On Friday, I was cagey about whether there would be a Christmas-week newsletter. I was worried that some resident of Mount Crumpit would be tempted to throw something important into the Friday-before-Christmas news void. And, sure enough, at 4:30 p.m., very quietly, someone at CMS pushed a button …
By law, the government was required to, by March 1, 2025, explain how it came to choose the “maximum fair prices” for the first 10 medicines to go through the Medicare drug negotiation meat grinder.
This is a date everyone had circled on their calendar because it offered an opportunity for some illumination of what has otherwise been a very murky decision-making process.
The law itself details a handful of components to be used in determining the price, but there’s no guidance on how those various components should be weighed. CMS’ hefty guidance documents, likely, offered little concrete perspective on the mechanics of price-setting.
All of this was, in some ways, not unexpected. The law and guidance were designed to offer some flexibility, even at the cost of creating a lot of wiggle room for the government.
But that lack of prospective direction only made the “March 1” explanation all the more important. Sure, the government might not want to set a hard-and-fast standard in advance, but, perhaps, providing its thinking after the fact would be useful.
This is all organ music to let you know that CMS released its “explanations” late on Friday afternoon. (Yes, the Friday before Christmas.) The disclosure came 10 weeks early and offered very, very little in the way of explanation.
That’s not to say that CMS didn’t release a lot of information. For each drug, they included a document of 20 or so pages on the negotiations, plus another file, heavily redacted, with all the info that the companies presented, along with all the public comments.
But the “explanation” documents were essentially identical from company to company, giving very few hints about how the government weighed the statutory factors. The negotiation details were, appropriately, redacted, but there were no hints as to the CMS’ more general thinking.
In other words, if you want to divine the government’s standards, you’re out of luck.
My initial assumption, in seeing that CMS had dropped half a gigabyte of data on these 10 drugs, was that this was an effort — before the new administration takes office — to make sure that its work was documented as a hedge against a new guard radically changing the process.
Instead, the sound and fury of the explanations signify nothing. Future “negotiations,” unbound by clarity in the statute or any sort of transparent precedent, risk moving forward according to Calvinball rules. I’m not sure that’s great for anyone.
Look, I know it’s December 23, but as long as I have you here …
Congrats to John O’Brien and his NPC crew for writing the most-viewed journal article in AMJC this year.
Here is a story about big 340B hospital behaving badly.
When Harvard’s Michael Chernow speaks, it’s worth listening. He took a look at last week’s National Health Expenditures numbers and identified three gaps in the data that complicate our ability to fully understand the spending breakdown in our system.
Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations.
To learn more about how Reid Strategic can help you, email Brian Reid at brian@reidstrategic.com.
