Medicare Drug Price Negotiation in the Spotlight at AMA Annual Meeting

CHICAGO — An American Medical Association (AMA) council report concerning drug price negotiation in the Medicare program drew lots of controversy at a Sunday reference committee hearing during the annual meeting here of the AMA’s House of Delegates.

“The manufacturers developed and set the [game] board we all have to play on to continue their drug pricing,” said Maisha Draves, MD, of Fairfield, California, who was speaking for herself. “It is commendable that we’re taking action toward the pharmaceutical companies to express to them the pricing they set has to come into control … Until we [address pricing transparency], we will not bring into control the pricing of drugs, the cost of drugs, and what it does to every single individual, including our patients. We need to address it, so it helps the copays, so it reduces the premium hikes, and [so that] drug pricing does not become the main driver of the exorbitant cost of healthcare.”

Reaction to Council’s Report

The delegates were responding to a report by the AMA’s Council on Medical Service, which reaffirmed AMA policy supporting Medicare negotiation of prices for drugs provided under the Part D program; the report also reiterated, however, that current AMA policy “opposes the use of price controls in any segment of the healthcare industry and continues to promote market-based strategies to achieve access to and affordability of healthcare goods and services.”

The report also specified that in regard to proposals calling for the use of an international pricing index that would base U.S. drug prices on the prices paid by other countries, “the council instead firmly supports using arbitration as a lever in prescription drug price negotiations, including in Medicare, instead of a price ceiling based on international prices that does not meet existing policy principles.”

Patrice Burgess, MD, who presented the report on behalf of the council, expanded on that point, saying, “The AMA needs flexibility when discussing drug pricing. Using international price indices … does not have a lot of support in Congress. Additionally, any efforts to control drug prices will also affect Part B as well as Part D, which could adversely affect many of our physician practices.”

“Finally, the AMA has policy against price controls elsewhere, and we feel it would be inconsistent to have price controls in this area,” she said. “We feel that arbitration will allow flexibility to incorporate international drug pricing as well as other factors when arbitrating the price of drugs, rather than being locked into just one criterion, especially since it’s very challenging to find other countries who have the same cost and value structure that we do.”

California Delegation Offers an Amendment

However, Tatiana Spirtos, MD, speaking for the California Medical Association (CMA) and PacWest, said the AMA “should not miss the enormous opportunity to curb Medicare drug prices for our patients in a meaningful way.” The delegation proposed an amendment that would set a drug price ceiling at the volume-weighted average percentage of prices paid in comparable industrialized countries. “We support this amendment because the council said they preferred arbitration; however, studies show Medicare drug price negotiation alone without a price index does not produce meaningful drug price savings,” she said.

Hans Arora, MD, delegate from the American Urological Association who was speaking on behalf of the Young Physician Section, applauded California’s proposal. He noted that the CMS report did not specify what makes up an international pricing index. “We believe this question needs to be answered in order to fulfill the will of our House of Delegates,” he said. “CMA’s amendment fills this gap.”

AMA past president Barbara McAneny, MD, an oncologist from New Mexico who chairs a group of independent oncology practices, disagreed. “The gaming that would occur if we tried to select countries would really make a mess out of international drug pricing and might actually increase prices both here and there,” she said.

In addition, “my group of practices studied the international pricing index when [former president Donald] Trump proposed it and found that almost all essential chemotherapy medications would be unobtainable by independent practices at any price, and would hurt our ability to take care of our cancer patients,” McAneny added. “We also discovered even hospital-based clinics could not purchase those drugs at the prices that might be imposed under an arbitrary system.”

Debate Over Dental/Hearing/Vision Benefits

The reference committee also combined the discussion of three resolutions: one proposing that the AMA “advocate for increased hearing screening, and expanding all avenues for third-party coverage for effective hearing loss remediation beginning in mid-life or whenever detected,” another advocating for the association to work toward dental benefits for Medicare beneficiaries, and a third seeking the AMA’s endorsement of dental and vision benefits for Medicare recipients and hearing benefits for those in any public or private insurance program.

This bundle of resolutions drew lots of comments. “Poor oral health can have deleterious — if not disastrous — effects on anyone, particularly seniors,” and disproportionately on disadvantaged patients, said Louise Andrew, MD, a delegate for the Senior Physician Section, which sponsored the oral health resolution. “Our policy has always asked us to work with the ADA [American Dental Association], but the ADA has shown absolutely no interest in making dental care affordable … Let’s put our money where our mouth is and care for the entire patient.”

Allan Anderson, MD, of Tucson, Arizona, speaking for the American Association for Geriatric Psychiatry, pointed out that one in three people will eventually develop Alzheimer’s disease if they live long enough. With no cure in sight, “prevention is really key … and hearing loss has been identified as a major risk factor,” both in a direct route to the brain, and in an indirect way due to the isolation it causes. He urged adoption of the resolution on hearing benefits.

David Jakubowicz, MD, a delegate for the New York State Medical Society and a practicing otolaryngologist, said he supported the American Academy of Otolaryngology-Head and Neck Surgery’s recommendation for referral back to the committee of the hearing benefits resolution. “There is a correlation between hearing loss and dementia, [but] no study showing use of hearing aids actually makes changes for these patients,” he said. “It does improve communication when patients use it, but only 22% of patients use their hearing aids more than 6 hours a day, and 10% of the people we give hearing aids to don’t use them.”

“The question becomes, if we’re taking this from the Medicare budget — which is budget-neutral — and potentially affecting our income, I want to see, what’s the risk/benefit? What’s the cost benefit to these patients as well?” Jakubowicz continued. “I had a grandfather with Alzheimer’s; I would do anything to help with his quality of life, and I do believe hearing aids improve quality of life, but [if few people use them] and with the fact that hearing aids have gone over the counter, there are complexities to this issue I think referral would address.”