Administration Outlines Plan To Lower Pharmaceutical Prices In Medicare Part B image

Health Affairs, October 26, 2018
Rachel Sachs (Academic Fellow Alumna)

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From the article:

Yesterday, the Trump Administration outlined a plan that, if implemented, could significantly lower the prices of pharmaceuticals through Medicare Part B. The plan contains three key elements: substituting private-sector pharmaceutical vendors for the current Part B “buy and bill” practice, changing the Part B Average Sales Price plus 6 percent reimbursement system to a flat fee, and implementing international reference pricing.  The first two of these were attempted – and failed – in previous administrations.

The model would take the form of a randomized controlled trial, exposing half of the Part B fee-for-service program to the “treatment” beginning in 2020 and phasing it in until 2025.

Many questions remain about the administration’s proposal, including whether and when it would actually move forward, whether the administration can withstand the political pressure it will face, and whether the plan’s elements would be extended (where relevant) to Medicare Part D or other payment systems.  For now, its rollout seems timed to prop up the administration’s record on drug pricing going into the midterm elections. 

In this post, I review the key elements of the plan and put it in context with the administration’s efforts on drug pricing so far. Since the proposal is quite lengthy, at times I will refer to page numbers for readers who would like to make quick reference to particular points.

Read more here!

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