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Plan B for Part B?

Why biopharma, physicians are waging war against CMS proposal

PhRMA and BIO's "hell no" responses to CMS's plan to change the way Medicare Part B pays for drugs have set the stage for a confrontation that will test the industry's ability to fend off future threats to its pricing practices.

The CMS proposal, which is structured as an experiment, includes a plan to wean physicians and outpatient facilities from reimbursement based on the cost of administered drugs. This phase is slated to be implemented this year.

The proposal also includes a second phase, which could start as early as January 2017, to test value-based payment models. CMS has solicited public comment on the nature and scope of the second phase.

For CMS, changes to Part B reimbursement represent one of the few opportunities for the executive branch to act independently of a stalemated Congress to reduce drug spending. The agency says its proposal will do so by reducing low-value care, not by regulating prices. The agency also says patients will receive care that is as good as or better than they receive under the current system.

Rather than suggest modifications or alternatives, the trade associations flatly rejected the agency's proposal to move away from reimbursing physicians for infused and injected drugs based on prices, and said experiments with value-based pricing should be confined to private payers.

Oncologists and rheumatologists, who say the proposals will reduce reimbursement below their acquisition costs for some drugs, have joined the drug industry in a massive attack on the proposals.

Although Part B covers only drugs administered in a physician's office or a hospital outpatient facility, industry views the proposals as threats to some of its most

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