CMS Guidance on IRA Price Negotiation: Part 2

What data do drug manufacturers need to submit to CMS as part of the IRA price negotiation? What data elements can they electively submit? The recent CMS guidance released May 3, 2024 outlines these elements.

What mandatory data are manufacturers required to submit?

On the mandatory side, drug manufacturers are required to provide CMS with the following types of data:

1. Research and development (R&D) costs of the Primary Manufacturer for the selected drug and the extent to which the Primary Manufacturer has recouped those costs;
2. Current unit costs of production and distribution of the selected drug, averaged across the Primary Manufacturer and any Secondary Manufacturer(s);
3. Prior Federal financial support for novel therapeutic discovery and development with respect to the selected drug;
4. Data on pending and approved patent applications, exclusivities recognized by the FDA, and applications and approvals under section 505(c) of the FD&C Act or section 351(a) of the PHS Act for the selected drug; and
5. Market data and revenue and sales volume data for the selected drug in the United States for the Primary Manufacturer and any Secondary Manufacturer(s).

Drug manufacturers are also required to submit non-FAMP price data. The nonfederal average manufacturer price (non-FAMP) is the average price paid to manufacturers by wholesalers for drugs distributed to nonfederal purchasers, reflecting discounts.

What data are manufacturers optionally allowed to submit?

Optionally, manufacturers can also submit data on therapeutic alternaitves. These data include:

1. The extent to which the selected drug represents a therapeutic advance compared to existing therapeutic alternatives for the selected drug and the costs of such existing therapeutic alternatives;
2. FDA-approved prescribing information for the selected drug and its therapeutic alternatives;
3. Comparative effectiveness of the selected drug and its therapeutic alternatives, including the effects of the selected drug and its therapeutic alternatives on specific populations (including individuals with disabilities, the elderly, the terminally ill, children, and other patient populations, herein referred to as “specific populations”); and
4. The extent to which the selected drug and the therapeutic alternatives to the drug address unmet medical needs for a condition for which treatment or diagnosis is not addressed adequately by available therapy.

Is CMS allowed to consider cost effectiveness studies?

Perhaps. The answer is yes, but not necessarily cost-effectiveness studies using QALYs. I quote the actual text of the guidance below.

CMS may use content in a study that uses a cost effectiveness-measure if it determines that the cost-effectiveness measure used is permitted in accordance with the law and does not treat extending the life of an individual who is elderly, disabled, or terminally ill as of lower value than extending the life of an individual who is younger, nondisabled, or not terminally ill. In instances where some, but not all, content in a study is excluded (e.g., Quality-Adjusted Life Years (QALYs)), CMS may still consider content that is relevant and allowable (e.g., clinical effectiveness, risks, harms) under section 1194(e)(2) of the Act and section 1182(e) of Title XI of the Act. CMS requires respondents submitting information to indicate whether their submission contains information from studies that use measures or methods that treat extending the life of an individual who is elderly, disabled, or terminally ill as of lower value than extending the life of an individual who is younger, nondisabled, or not terminally ill. CMS also requests that respondents submitting information under section 1194(e)(2) of the Act provide a short description of any cost-effectiveness measures included in the research they are submitting, and how they believe the data avoids treating extending the life of an individual who is elderly, disabled, or terminally ill as of lower value than extending the life of an individual who is younger, nondisabled, or not terminally ill.

Can you provide more detail on the specific data elements manufacturers need to submit?

Yes . A table is below or you can click on the data submission file layout on the CMS website here.

The full guidance is available here.