|
 Seema Verma, head of the Centers for Medicare and Medicaid Services
(CMS), made the comments in an interview with Reuters on the
sidelines of the Forbes Healthcare Summit in New York.
CMS, part of the U.S. Department of Health and Human Services (HHS),
spends hundreds of billions of dollars annually on medicines for
seniors, disabled people and low-income households through the huge
Medicare and Medicaid programs. CMS does not negotiate prices or
purchase drugs, but sets ground rules for the managed care companies
and state Medicaid agencies that do.
"We are trying to do whatever we can to increase competition and
give the (health insurance) plans more tools so that they can be
better negotiators on our behalf," Verma said.
Roughly 125 million Americans are covered by Medicare and Medicaid.
The United States is the world's most expensive market for
prescription drugs. Government agencies and private sector companies
are struggling to cover the costs of new medicines that have made
the most progress to date in treating cancer and rare genetic
disorders, some with annual price tags of nearly $500,000.
Verma said one model under consideration was paying different prices
for a single drug based on its success treating a particular
condition, such as paying more for a therapy that works better for
breast cancer than it does for lung cancer or liver cancer.
A second method would be to extend the payment of an extremely
expensive medicine over a longer time-frame, rather than immediately
after it is given to a patient, Verma added, saying both are being
tested by private sector pharmacy benefit managers.
That approach could be particularly useful for gene-based therapies
aimed at small patient populations, she said. One such treatment
expected to be approved by early next year is Spark Therapeutics' <ONCE.O>
therapy for a genetic mutation that causes blindness in around 1,000
to 2,000 patients. Some industry experts expect it to carry a list
price of as much as $1 million.
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Earlier this year, drugmaker Novartis <NOVN.S> said it reached an
agreement with CMS over its revolutionary new blood cancer drug
Kymriah, which has a list price of $475,000. Novartis is paid based
on the outcomes achieved among pediatric and young adult leukemia
patients by the end of the first month.
A similar treatment that harnesses the immune system's CAR-T cells
from Gilead Sciences Inc's Kite Pharma unit was approved last month
and costs $373,000. Other companies including Juno Therapeutics and
BlueBird Bio have similar treatments in advanced clinical trials,
all of which aim to cure the disease with a one-time treatment.
President Donald Trump has promised to curb drug costs, but little
concrete action has been taken so far. CMS has begun seeking
information from insurance plans and drug companies as it considers
possible changes, Verma said.
Alex Azar, Trump's nominee for HHS secretary, on Wednesday promised
to address drug prices if confirmed to the job, where he would be
Verma's boss.
Some Democratic and Republican lawmakers, as well as healthcare
experts, have urged Congress to enact new laws allowing the
government to negotiate drug prices directly with manufacturers. In
the meantime, Verma is focusing on what she is already authorized to
do.
"We are trying to do whatever we can within the regulatory
structure," she said.
(Reporting by Caroline Humer; Editing by Michele Gershberg and Will
Dunham)
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