For Immediate Release:
Contact: Kelly Broadway, 202-808-8853
CMS Must Address the Failings of the Inflation Reduction Act
Washington, D.C. – The passing of the Inflation Reduction Act (IRA) immediately impacted the research and development of new therapies for patients, resulting in at least 24 companies curbing new drug investigations. With its Medicare Drug Price Negotiation Program Guidance, the Centers for Medicare & Medicaid Services (CMS) must address the egregious errors Congress made with the passage of the IRA.
In comments to CMS, the Council for Affordable Health Coverage (CAHC) focused on two areas where CMS can improve the drug negotiation process:
- Creating a more transparent process, including the incorporation of feedback from stakeholders and the retention of correspondence documents, as it implements this new and complex negotiation program
- Using its flexibility to ensure products for very sick patients with rare diseases are not adversely impacted by price controls
The CMS program rule implementing the Inflation Reduction Act is bad government at its worst. Congress instructed the Department of Health and Human Services to implement the negotiation law by “program instruction or other forms of program guidance” for 2026, 2027, and 2028.
This is not the regular process established by Congress to encourage citizen participation in a transparent government for the people. The CMS program rule ensures little input and zero transparency, puts a gag on public disclosure of negotiations, and even requires the destruction of evidence and records related to how prices are negotiated. The rule seriously undermines transparency and the ability to validate information if a conflict arises, shielding CMS decision-making from public scrutiny and eroding public confidence in the price-setting process.
There is no reason CMS cannot be more transparent and actively respond to the concerns of patients and other parties.
The program rules are also bad for patients – especially those with rare conditions. The current guidance for orphan drugs will be a death sentence for millions of Americans with rare diseases. If the true purpose of the Inflation Reduction Act is to make medications more affordable for more people, then the Administration must address its grotesque treatment of orphan drugs. The CMS program rule limits the number of diseases a drug can treat to remain exempt from price controls. This reduces incentives for researchers to develop new, potentially lifesaving drugs. CMS must stand up for the millions of Americans suffering with rare diseases and delay the start of the price negotiation clock for when an excluded orphan product loses its exemption from price controls.
The Inflation Reduction Act exempts implementation of the negotiation program from requirements of the Administrative Procedures Act (APA). Enacted in 1946, the APA ensures citizens have a right to be heard by government, that government responds to their concerns, and that parties harmed by government have access to recourse. The law includes requirements for informing the public of rules and providing for public participation in the rule making process by publishing notices of proposed and final rulemaking in the Federal Register and the opportunity for the public to comment on notices of proposed rulemaking.