Can A Set-Aside Amount Change If A Drug Becomes Generic?

Posted by John Cattie

Question:
I have seen your information through WILG which is always informative. Can you answer a question? If a set aside includes say $20,000 for Cymbalta use and that medication later becomes available as a generic, could it be possible to petition CMS for a reduction as the medication is no longer say $10 dose, but now $2? Numbers are just for example purposes, of course, but the general idea is interesting.

-New York Attorney

Answer:
This is a very good question. CMS’ most recent Memo (April 2009) discusses prescription drugs in MSAs, but it does not directly answer your question. Before answering your question, there are a couple important points to keep in mind: 1) the submission of a MSA proposal to CMS for review and approval is voluntary, not mandatory; and 2) CMS has workload review thresholds in place that allow submission only in certain circumstances.
Having said that, I think that if/when a generic equivalent to Cymbalta becomes available, the switch to that generic equivalent can be made and the MSA amount reduce based on the average wholesale price (AWP) of that generic equivalent. CMS tells us that, so long as the MSA proposal specifically names the generic equivalent to be taken and that generic equivalent exists, then it is proper for the generic to be included as opposed to the name brand drug.
Therefore, 1) if the MSA proposal is not/has not been submitted to CMS, it’s OK to change from Cymbalta to the generic and adjust the MSA amount appropriately. Just keep records as to why the change is occurring. 2) If the MSA proposal is/has been submitted to CMS, while we do not have exact guidance from CMS, I believe a petition to CMS to change based on the new generic becoming available would be proper.

My best,
John Cattie