CMS Faces Major Challenges As It Establishes Itself As An HTA Entity

Though it’s not officially part of their mandate, the Centers for Medicare and Medicaid Services has gradually assumed more health technology assessment responsibilities over the years. As CMS begins the negotiation process for the 10 prescription drugs it selected on August 29th as part of implementation of the Inflation Reduction Act’s drug pricing provisions, its involvement in HTA will deepen considerably. The agency may, however, be biting off more than it can chew. It is more feasible to have a separate HTA entity whose sole job is technology evaluation.

For decades, CMS has been authorized to decline reimbursement at the national level for items and services that are not deemed “reasonable and necessary” for the diagnosis and treatment of disease or injury.

Most of the time, however, CMS subcontracts with regional Medicare Administrative Contractors who make local coverage determinations, or Medicare Advantage and Part D (outpatient) plans who establishment reimbursement protocols on their own. Whether it’s a new drug, medical device, or diagnostic, CMS generally defers to carriers operating in the Part B (physician-administered) or Part D (outpatient) spaces in terms of decisions on reimbursement.

But occasionally CMS pursues a national coverage analysis and issues national coverage determinations, often in conjunction with issuing a coverage with evidence development policy. Simply put, coverage with evidence development allows Medicare beneficiaries to access promising therapies and services while additional data are collected by CMS.

And so, when making national coverage determinations, CMS systematically evaluates clinical evidence to determine whether it is reasonable or necessary to cover an item or service and under which conditions.

A recent national coverage determination on Alzheimer’s disease drugs drew a lot of media and industry attention. In this context, Leqembi, and in future possibly other beta amyloid-targeted monoclonal antibodies, is covered by Medicare provided patients enroll in a patient registry along with a few other conditions.

The IRA’s drug pricing provisions, specifically the one that allows Medicare to negotiate drug prices for a limited subset of prescription drugs, compel CMS to significantly expand its role in conducting HTA. This is because during negotiations there will be an offer and counteroffer process between CMS and drug makers that is intricate and not something CMS has ever had to deal with before. It will involve CMS justifying its offer price, presumably based on internal or external HTA. Furthermore, in response, drug manufacturers will resort to giving reasons for counteroffer prices by furnishing supportive evidence regarding their drugs’ comparative effectiveness evidence, therapeutic advantages, unmet need and R&D costs, among other factors.

But CMS may have too much on its plate if it must do its everyday administrative, oversight and payment duties, in addition to HTA and drug price negotiations.

Separating out the HTA activities under a different, independent roof would be appropriate. An independent entity could perform the evaluations and provide recommendations in an advisory capacity, but not be involved in actual pricing negotiations, nor have administrative or claims-processing responsibilities.

As such, it would be shielded from some of the political pressure that CMS operates under. CMS is after all an agency which acts under the auspices of the executive branch of government.

CMS ought not to be judge, jury, and executioner. It should leave certain judge and jury aspects to an independent non-partisan body which can carry out HTA, unencumbered by executive branch politics.

Here, the federal government could draw from other nations’ experience in which HTA is a distinct function, as is the case with the National Institute for Clinical Health Excellence in the U.K., Haute Autorité de Santé in France, Zorginstituut in the Netherlands and the Institute for Quality and Efficiency in Healthcare IQWiG in Germany.

Of course, in calculating the costs and benefits of drugs selected for negotiation inevitably HTA will entail value judgments. Traditionally HTA must consider multiple factors, including clinical- and cost-effectiveness as well as budgetary impact. But HTA may also extend to ethical, social, cultural and legal issues, as well as perspectives that have a wider lens than just the patient.

According to “accountability for reasonableness,” a theory published by Daniels and Sabin, a fair HTA process is transparent and allows for a pluralist set of value judgments to be heard and discussed. Such a due process implies that the grounds for decisions that HTA bodies make are explicitly stated; they appeal to rationales which all can accept as relevant to meeting the healthcare needs of the population equitably; incorporate procedures for revising such decisions in light of challenges to them.

As CMS firmly establishes itself as an HTA entity in the wake of the IRA’s drug price negotiations provision it may want to consider carving out the function of HTA and delegating it to an external entity which can operate as a neutral arbiter.