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BIO Statement on New HHS Payment Models

February 15, 2023

HHS yesterday released three payment models for testing by CMS, which HHS believes will lower the cost of prescription drugs. BIO's Chief Policy Officer, John Murphy, made the following statement:

"Today, the Department of Health and Human Services released a report outlining several proposals the Agency believes will lower the cost of prescription medicines. It was unfortunate to see the report repeat several long-debunked issues related to the pricing of medicines. Several of HHS’ proposed demonstration programs seem to be a positive step in delivering what BIO has long pushed the government to do: address the real problems underlying prescription drug pricing – patient out-of-pocket expenses and better payment systems that reward the value a medicine brings to the patient and the overall healthcare system. In proposing to test generic copayment caps in the Part D program and seeking to enhance access to cell and gene therapies through multi-state outcomes-based payment arrangements, HHS is making strides to deliver true relief to patients at the pharmacy counter while also ensuring incentives remain for innovation to help those patients still awaiting a discovery that one-day might help them. In these two proposed demonstration programs, BIO looks forward to working with HHS.

"Unfortunately, in its third proposal, HHS misses the mark significantly. By proposing to penalize companies for utilizing surrogate endpoints in an effort to get groundbreaking and necessary treatments to patients, HHS is putting its thumb on the scale against innovation.

"The accelerated approval pathway encourages scientific and medical advancement and innovation by leveraging the use of surrogate or intermediate clinical endpoints that are reasonably likely to predict clinical benefit. Drugs granted accelerated approval must meet the same statutory standards of safety and substantial evidence of effectiveness as those granted traditional approval. Innovative manufacturers have long worked closely with the FDA to ensure appropriate and science-based follow-up studies are planned and conducted to ensure confirmation of surrogate endpoints used in accelerated approval. This is just as Congress intended.

"Effectively, CMS is publicly stating that it does not believe FDA is living up to its commitments to approve safe and effective medicines. In fact, for the second time in less than a year, CMS is calling into question FDA’s science-based approval process for innovative medicines. While the two demonstration proposals that accompany seek to lower costs for patients, it is notable that the rationale for this pilot cites concerns by insurers and the need to balance budgets, not protect patient access or innovation. The Accelerated Approval Pathway is a Congressionally mandated program to spur investment and innovation in areas of unmet medical need; this proposal runs counter to that very idea.

"As advocates for science-based and patient-centric policies, BIO opposes this attack on the Accelerated Approval Pathway and will continue efforts to support scientists, innovators, and the millions of patients desperate for new cures."

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