The implementation of Medicare drug price negotiations under the Inflation Reduction Act (IRA) of 2022 is raising significant concerns within the community oncology sector, with experts warning of far-reaching consequences for patient care and practice sustainability.
The Community Oncology Alliance (COA) has highlighted several critical issues in their July 2024 response to the Centers for Medicare & Medicaid Services' (CMS) draft guidance for the second cycle of Medicare Drug Price Negotiations. These concerns center on the implementation of Maximum Fair Price (MFP) throughout the drug supply chain and its impact on community care settings.
Operational Challenges for Community Practices
Community oncology practices face substantial operational hurdles under the new system. "Like most government programs, it's complicated, way too complicated. Anything that's complicated creates a burden on clinics to implement," explains Jeff Patton, MD. The requirement to maintain separate inventories for MFP- and non-MFP eligible patients presents particular challenges.
Debra Patt, MD, PhD, MBA, FASCO, emphasizes the logistical complications: "We're going to need space and administrative staff to manage two separate sources of inventory. Many of these new and novel therapies must be preserved at certain temperatures and require refrigeration as well as certain preparation."
Financial Impact and Reimbursement Concerns
The financial implications for community practices are significant. Under the proposed retrospective effectuation model, practices may wait up to two months to receive reimbursement for the difference between acquisition costs and MFP-based reimbursement. This delay creates substantial cash flow challenges for smaller practices.
An independent analysis projects at least a 49.4% decrease in Part B add-on reimbursement for oncology providers once the IRA is fully implemented. This reduction, combined with CMS's proposed 2.93% cut to physician fee schedule payments for 2025, poses serious threats to practice viability.
Innovation and Patient Care Implications
Healthcare leaders express concern about potential negative effects on pharmaceutical innovation. "My biggest worry is the decrease in innovation," states Dr. Patton. "Without the capital to invest in research and development, it's not going to happen."
Dr. Patt emphasizes the importance of maintaining community practice sustainability: "Part of the success is in patients getting great cancer care where they are. There are implications of the IRA on oncology practices and our sustainability. Our sustainability is very important for patients to receive modern cancer therapy."
Legislative Response and Future Outlook
The Protecting Patient Access to Cancer and Complex Therapies Act, introduced by Senator John Barrasso, aims to address some of these challenges by requiring drug manufacturers to send rebates directly to the government for cost differences. Various healthcare organizations have voiced support for this legislative solution.
As the healthcare community prepares for these changes, COA remains engaged with CMS to improve oncology care quality and cost while ensuring continued patient access. The full impact of these policy changes on community oncology practices and patient care will become clearer as implementation proceeds in the coming years.
