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Prescription Drug Price Transparency

If you’re wondering if Pharma is included in price transparency legislation, you’re not alone! Technically, it is included as part of Transparency in Coverage (TiC) the Final Rule applying to payers. But, the requirement pertaining to pharmaceuticals in particular has been indefinitely delayed.

The Prescription Drug File Requirement

TiC was written with not two, but three machine-readable file (MRF) requirements:

  1. In-Network Rate File: rates for all covered items and services between the plan or issuer and in-network providers.
  2. Allowed Amount File: allowed amounts for, and billed charges from, out-of-network providers.
  3. Prescription Drugs File: negotiated rate and historical net price.

If you didn’t know that third file existed or you haven’t seen it out in the wild, that’s because FAQs released in August, 2021 included CMS’ decision to defer enforcement of the prescription drugs file. The remaining two files were required to be publicly available as of 7/1/2022.

However, as of late September 2023, CMS released FAQs About Affordable Care Act Implementation Part 61, which included updates related to the three MRF requirements from TiC. The Part 61 FAQs end the enforcement deferral period for the prescription drug MRF. An enforcement date has yet to be announced.

Part B Drug Rates Are Public

Part B injectable drugs are included in hospital MRFs because hospital files must be built on all items and services within a hospital’s chargemaster (CDM). That means that within the currently available price transparency data, we have Part B drug rates.

Part D Drug Rate Enforcement Remains Delayed

The addition of a payer-created file specifically dedicated to prescription drugs opens the door to compare and match rates between hospital and payer files, which adds a valuable layer of validation and confidence for data users.

It also prepares numerous stakeholders for the upcoming rounds of drug negotiations through the Inflation Reduction Act. While the first two negotiation rounds focus specifically on Part D drugs, round three will contain Part B drugs. The calculation of the Maximum Fair Price (MFP) is complex and we anticipate will be heavily scrutinized in the negotiations process, so having public data showing negotiated rates and historical net price lays some common ground for fair rate assessment.

Without publicly available negotiated rates, patients are left unable to get comprehensive pre-appointment estimates. The lack of complete drug negotiated rates has left a gap in accurate estimate creation. With the new drug data in hand, great strides can be made toward good faith estimates and advanced explanations of benefits, which leads to increased education and decision-making abilities for patients.

In addition to the Inflation Reduction Act, the Hospital Final Rule, and now TiC, The Lower Costs, More Transparency Act bill draft contains robust reporting requirements for Pharmacy Benefit Managers. How this will play out in the end, remains to be seen.