USA's CMS implements next steps for drugmakers in closing Medicare 'donut hole'

The USA's Centers for Medicare and Medicaid Services (CMS) yesterday issued the agreement that drug manufacturers will use to provide savings of about 50% on brand name drugs and biologics for people with Medicare Part D who hit the Part D drug benefit coverage gap, or 'donut hole,' in 2011.

'These agreements implement important provisions of the Affordable Care Act to close the donut hole over the next 10 years that will result in significant savings to beneficiaries when they buy their drugs at their local pharmacies or through mail order,' said Jonathan Blum, deputy administrator for the CMS' Center for Medicare.

Based on comments the CMS received from manufacturers, advocates and Part D sponsors, the CMS revised the manufacturer agreement to provide additional time for quarterly invoice payments by drugmakers to plan sponsors within 38 days of receipt through the Third Party Administrator (TPA). This is consistent with the reimbursement schedule used in the Medicaid Drug Rebate Program. The CMS is also providing manufacturers with claims level data necessary to validate invoices, without sharing private patient information. The final agreement ensures that beneficiary information will continue to be protected in the same manner as it's protected now.