CALL TO ACTION: HIV Medication Carve-Out Exemption from the Medicare Drug Price Negotiation Program

By: Marcus J. Hopkins, ADAP 340B Consultant

ADAP Advocacy has submitted public comments to the Centers for Medicare and Medicaid Services (CMS) regarding the proposed guidance for the Medicare Drug Price Negotiation Program (“Negotiation Program”) established under the Inflation Reduction Act (2022):

While ADAP Advocacy’s objections to the Negotiation Program’s proposed implementation are several, our primary request is for the creation of a carve-out exemption for all medications used for the treatment of HIV/AIDS in the U.S. that would prevent these treatments from being eligible for any future Medicare price negotiations.

Photo Source: CMS

ADAP Advocacy has requested this carve-out exemption due to the serious nature of the threat facing People Living with HIV/AIDS (PLWHA), should HIV medications be selected as part of the Negotiation Program. While the HIV treatment landscape has improved significantly over the last 25 years, today only a handful of manufacturers continue to work in the HIV space, including Gilead Sciences, ViiV Healthcare, and Merck. Over the past decade, three manufacturers—Bristol Myers Squibb, AbbVie, and Johnson & Johnson—have withdrawn from the HIV space for various reasons, not least of which is the difficulty of competing in a landscape where many of the most significant innovations, including well tolerated single-pill regimens, long-acting injectable agents, and highly effective oral and injectable prophylaxis, have already occurred.

As part of this effort, ADAP Advocacy has also spearheaded a national sign-on letter seeking support from national, state, and local advocacy organizations. The letter and the signature form are available online at: https://www.adapadvocacy.org/letter-cms-hiv-carveout.php. 

The Negotiation Program essentially requires manufacturers to accept the final price after four negotiation meetings set by CMS, reject the offer, and pay a 95% excise tax on all of the medications sold to Medicare payors, or remove their products from the Medicare formularies altogether (Hammond, 2024). Because no business can feasibly accept a 95% excise tax and remain viable, manufacturers are left with the unenviable decision to either accept significant profit losses in the Medicare market or withdraw their drugs.

Photo Source: Inside Sources

The prospect of losing access to HIV medications paid for through Medicare poses a significant risk to PLWHA. Medicare is the 2nd-largest payor of HIV treatment and care in the United States, accounting for 39% of federal spending in 2020, and serving 28% of PLWHA (Dawson, et al., 2023). Additionally, 77% of PLWHA who are enrolled in Medicare first qualified for the program not because of age but because of a disability diagnosis.

Patients who lose access to HIV medications may fall out of treatment entirely, placing them at risk of dying from opportunistic infections or having their HIV mutate to develop resistance to the medications used to achieve viral suppression—when the number of actively replicating HIV cells drops below 200 copies per milliliter of blood. In addition to these primary risks, patients whose HIV is not virally suppressed, or undetectable, can pass along the virus to others. In contrast, those whose viral load is undetectable are unable to do so.

In addition to the carve-out for HIV medications, ADAP Advocacy made the following recommendations:

1. CMS should implement a standardized Market Fair Price calculation methodology that replaces the methodology outlined in section 60.3 that is clear, transparent, and made available to manufacturers at the time the Market Fair Price is determined and when the initial offer is made to manufacturers;
2. CMS should revise its definition of “selected drug” as set forth in section 30.1 to ensure limit the inclusion of multiple formulations and strengths of medications to ensure that price determinations and negotiations are made in good faith;
3. CMS should undertake an immediate patient engagement campaign prior to the implementation of the proposed guidance for the Negotiation Program to ensure that Medicare beneficiaries have a clear understanding of how the Program will directly impact them and to allow patients to provide meaningful feedback and opinions to help guide the program to better patient-centered outcomes; and
4. CMS should exclude any cost-effectiveness calculations that utilize biased and discriminatory metrics, including Quality-Adjusted Life Years and similar measures of medical intervention efficacy.

A precedent already exists for protecting vulnerable populations from the unintended consequences of changes to the healthcare ecosystem, as evidenced by Medicare’s six protected classes (6PC). In Medicare Part D, 6PC protects vulnerable seniors and low-income beneficiaries with severe and complex health conditions, while also allowing Part D insurance plans to utilize the necessary tools to control costs. Medicines for some of the sickest patients in Part D are covered within the six protected classes, including those for cancer, epilepsy, HIV/AIDS and mental illness. Many of these conditions require patients to attempt a variety of therapies before they and their doctor settle on the most appropriate treatment, so there is no one-size fits all medicine for these conditions (Johnson, 2019).

Photo Source: VAROS

Healthcare decisions for complex health conditions should be left to patients, and their doctors. For people living with HIV/AIDS, numerous factors come into play when determining the appropriate highly active anti-retroviral therapy (HAART). And now with the advent of injectable HIV therapy, such decisions take-on an entirely new dimension."

These recommendations represent the bare minimum of changes that should be made to the Negotiation Program. ADAP Advocacy asks advocacy organizations to add their names to the circulating sign-on letter, as it continues to work with legislative and administrative officials to ensure that patient voices are heard and their access to life-saving treatments is sustained.

[1] Dawson, L., Kates, J., Roberts, T., Cubanski, J., Neuman, T., & Damico, A. (2023, May 27). Medicare and People with HIV. KFF: HIV/AIDS. https://www.kff.org/hivaids/issue-brief/medicare-and-people-with-hiv/

[2] Hammon, J. (2024, August 19). Price controls – bad policy, big problems. Washington, DC: Paragon Health Institute. https://paragoninstitute.org/paragon-prognosis/price-controls-bad-policy-big-problems/

[3] Inflation Reduction Act of 2022, Pub. L. No. 117-169, 136 Stat. 1818 (2022). https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf

[4] Johnson, Juliet (2019, January 31). New Research Shows Changes to the Six Protected Classes Would Harm Most Vulnerable Patients and Are Unnecessary. ADAP Blog. Retrieved online at https://adapadvocacyassociation.blogspot.com/2019/01/new-research-shows-changes-to-six.html 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.