CMS Proposes Rule Change to Medicare Part D Exemptions for "Protected" Classes of Drugs

By David White

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule yesterday, November 26, 2018, that includes changes to Medicare Advantage and Part D. Medicare says its proposal will give Part D drug plans more power to negotiate with pharmaceutical companies, but some patient and provider groups say that it will reduce access and shift costs onto beneficiaries.

CMS said in its proposed rule that it would start allowing Part D plans to exclude a drug from the "protected" classes on their formularies if the increase in the drug's price is greater than inflation or if CMS determines that the drug is not a significant innovation over the original product. Current policy requires Medicare Part D plans to cover drugs in the following six categories:

  • antidepressants
  • antipsychotics
  • anticonvulsants
  • immunosuppressants for treatment of transplant rejection
  • antiretrovirals
  • antineoplastics


The proposed rule would create exemptions to the "protected class" policy.  The American Society of Nephrology (ASN) is examining the rule very carefully and coordinating with peer societies – especially in the transplant space – since one of the categories covers immunosuppressants.

CMS maintains that the rule will:

  • Provide Medicare Advantage and Part D plans more tools to negotiate lower drug prices within the "protected classes" of drugs.
  • Allow Part D plans to implement broader use of step therapy and prior authorization, even within protected classes. The proposed rule would also allow Part D plans to exclude a protected class drug if it's a new formulation of an existing product or if the price of the drug increased more than the rate of inflation.
  • Require Medicare Part D plans to provide enrollees and their physicians access to a patient's out-of-pocket cost obligations for prescription drugs when a prescription is written should they wish.
  • Implements a statutory requirement that prohibits pharmacy gag clauses in Part D.


CMS said it is also considering a policy that would require pharmacy rebates to be passed on to seniors.

Clearly, there are many changes in this proposed rule and ASN is examining potential unintended consequences to protect patients and clinicians. Tune into KNO as ASN will continue to follow and report on this proposed rule.

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David White
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The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule yesterday, November 26, 2018, that includes changes to Medicare Advantage and Part D. Medicare says its proposal will give Part D drug plans more power to negotiate with pharmaceutical companies, but some patient and provider groups say that it will reduce access and shift costs onto beneficiaries.

CMS said in its proposed rule that it would start allowing Part D plans to exclude a drug from the "protected" classes on their formularies if the increase in the drug's price is greater than inflation or if CMS determines that the drug is not a significant innovation over the original product. Current policy requires Medicare Part D plans to cover drugs in the following six categories:

  • antidepressants
  • antipsychotics
  • anticonvulsants
  • immunosuppressants for treatment of transplant rejection
  • antiretrovirals
  • antineoplastics


The proposed rule would create exemptions to the "protected class" policy.  The American Society of Nephrology (ASN) is examining the rule very carefully and coordinating with peer societies – especially in the transplant space – since one of the categories covers immunosuppressants.

CMS maintains that the rule will:

  • Provide Medicare Advantage and Part D plans more tools to negotiate lower drug prices within the "protected classes" of drugs.
  • Allow Part D plans to implement broader use of step therapy and prior authorization, even within protected classes. The proposed rule would also allow Part D plans to exclude a protected class drug if it's a new formulation of an existing product or if the price of the drug increased more than the rate of inflation.
  • Require Medicare Part D plans to provide enrollees and their physicians access to a patient's out-of-pocket cost obligations for prescription drugs when a prescription is written should they wish.
  • Implements a statutory requirement that prohibits pharmacy gag clauses in Part D.


CMS said it is also considering a policy that would require pharmacy rebates to be passed on to seniors.

Clearly, there are many changes in this proposed rule and ASN is examining potential unintended consequences to protect patients and clinicians. Tune into KNO as ASN will continue to follow and report on this proposed rule.

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Tuesday, November 27, 2018