Senate and House Health Leaders Highlight Importance of Incentivizing Abuse-Deterrent Drug Formulations

Bicameral Leaders Praise CMS for Seeking Further Input on Medicaid Drug Rebate Regulation and Encourage Agency to Protect Drug Innovations that Combat Drug Abuse

WASHINGTON, DC – Bicameral leaders sent a letter on Thursday to the Centers for Medicare and Medicaid Services (CMS) applauding their decision in a February 1, 2016, final rule to hold off from finalizing a previously proposed definition of line extension drugs in the Medicaid program. Instead, CMS’s final regulation noted the agency is “requesting additional comments on the definition of line extension drug” and “may consider addressing this in future rulemaking.” The letter was sent by Senate Finance Committee Chairman Orrin Hatch (R-UT), House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Health Subcommittee Chairman Joseph Pitts (R-PA).

In the draft regulation CMS originally proposed in 2012, innovative abuse-deterrent formulations (ADFs) of drugs would be subject to additional rebate obligations under the Medicaid program – which would have the effect of penalizing a key technological innovation in the effort to combat prescription drug abuse.

“At a time when so many of us are working together to identify and adopt targeted solutions to curbing our drug abuse crisis, we believe CMS’s decision to seek further definition of line extension is a responsible measure,” wrote Upton, Pitts and Hatch. “We support CMS’ prudent decision to solicit new input from industry and stakeholders and we believe the comment period will yield updated and innovative comments that reflect advances made in technology since the rule was originally proposed in February 2012.”

The leaders’ letter reiterated concerns that had previously been directed by 23 lawmakers to Office of Management and Budget Administrator Shelanski in an October 28, 2015, letter over any regulation which could effectively disincentivize the development of abuse-deterrent innovations. Upton, Pitts, and Hatch continued, “As that letter noted, there is strong concern that subjecting manufacturers of ADFs to additional rebate obligations under the Medicaid program would not only be a problematic dampener on ADF research and development, it would contravene the intent of Congress. It was not the intent of Congress to include drugs with abuse-deterrent technology in the definition of a line extension.”

The committee leaders noted their “hope that CMS’s decision to accept additional comments” indicated an understanding of the statute and legislative history. Moving forward, they emphasized “it is imperative that we continue to support improvements in drug ADF technology in order to combat prescription drug abuse...”.

Click here to view the letter.

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