Administration To ‘Unleash’ Medicare Advantage Plans’ Bargaining Power On Some Drug Prices
As a negotiation tool, Medicare Advantage plans will now be able to require patients getting drugs in a doctor's office or the hospital to try lower-cost medicines before moving up to more expensive ones in a process called step therapy. Insurers already had this option in Part D drug plans -- which cover prescriptions such as those purchased by beneficiaries at pharmacies. But the option is now being expanded.
Reuters:
U.S. To Boost Drug Price Negotiation In Medicare Advantage Health Plans
The Trump administration said on Tuesday it would give Medicare Advantage health plans for the elderly new tools to negotiate for lower prescription drug prices. The Centers for Medicare and Medicaid Services (CMS) said Medicare Advantage plans will be allowed to require that patients first try certain lower-cost drugs before moving to a more expensive alternative if the first treatment is not effective. (Erman and Gershberg, 8/7)
Modern Healthcare:
Medicare Advantage Change May Lower Part B Drug Prices
Step therapy allows a plan to determine whether patients should first get a low-cost generic and then work their way up to a more costly product if the initial treatment is ineffective. MA plans already have this authority for Part D drugs, which are drugs provided at pharmacies. This latest move allows prior authorization for drugs administered in doctors' offices. Officials at the CMS said step therapy could lower drug costs by incentivizing drugmakers to have the least expensive drugs available as the first option. Last year, MA plans spent $11.9 billion on Part B drugs. (Dickson, 8/7)
The Hill:
Trump Administration Gives Insurers Power To Lower Medicare Drug Prices
Insurers participating in Medicare Advantage will be able to negotiate directly with drugmakers in an effort to lower the cost of prescription medications under a new policy announced by the Trump administration. The policy aims to allow Medicare Advantage plans access to the same tools as private insurers to try to lower the costs of treatments delivered in a physician office or hospital under Medicare Part B. The change will impact more than 20 million people enrolled in Medicare Advantage plans. In 2017, Medicare Advantage plans spent $11.9 billion on Medicare Part B drugs, according to the Centers for Medicare and Medicaid Services (CMS). (Weixel, 8/7)
Bloomberg:
Trump Forces Pharma To Face More Medicare Drug-Price Negotiation
The change will bring what Medicare pays closer in line to what the private sector gets. In the commercial market, health insurers negotiate discounts of 15 percent to 20 percent or more on the same drugs for which Part B has paid full price. Half of the savings will be required to go back to patients. In future years, the savings will be used to reduce premiums. But because 2019 rates are already set, patients may receive a gift card instead. (Edney, 8/7)
Stat:
Private Medicare Plans Will Be Able To Use A New Tool To Lower Drug Costs
The administration framed the announcement as a step toward lowering drug prices, saying in a press release that it will enable Medicare Advantage plans “to drive down prices for some of the most expensive drugs seniors use.” “President Trump promised better Medicare negotiation and lower drug prices for the American people. Today, we are taking an important step in delivering on that promise,” health secretary Alex Azar said. But the new policy is a far cry from President Trump’s campaign promise to let Medicare negotiate prices — a far more ambitious and controversial proposal that he and his top health officials have since abandoned. (Swetlitz, 8/7)
Reuters:
Trump Says Will Make Announcement Next Week On Reducing Drug Prices
U.S. President Donald Trump said on Tuesday that his administration would make an announcement next week on reducing drug prices, but he did not offer specifics. Speaking at a dinner with business leaders at his New Jersey club, Trump said, "We are announcing something next week which is going to get them down really substantially." Trump has made lowering the cost of prescription drugs an issue for his administration. (Oliphant, 8/7)
