Administration Ramps Up Drug Pricing Focus on Medicare B, D

The administration continued its push to reduce drug spending with a Sept. 13 executive order focused on Medicare Part B and Part D. While previous efforts had focused on Part B, including an International Pricing Index (IPI) model, Part D had not previously been targeted. Many industry insiders view the moves as simply an effort by President Donald Trump to sway voters in his favor in the Nov. 3 election. And multiple questions exist over the executive order, which is scant on details.

Medicare should not pay more for products in Parts B and D than the most- favored-nation price, says the order. That price is defined as the lowest one for a product that its manufacturer sells “in a member country of the Organisation for Economic Co-operation and Development (OECD) that has a comparable per-capita gross domestic product.” The proposal calls for the HHS secretary — currently Alex Azar — “to implement his rulemaking plan” in Part B and “develop and implement a rulemaking plan” in Part D to test payment models in which Medicare would not pay more than the most-favored-nation price to determine whether they “would mitigate poor clinical outcomes and increased expenditures associated with high drug costs.” The order also revoked a July 24 executive order that applied the most-favored-nation proposal to Part B only.

Angela Maas

Angela has an extensive background of editing, reporting and writing for trade and consumer publications. She has written Radar on Specialty Pharmacy (formerly called Specialty Pharmacy News) since she joined AIS Health in 2005 and has broad knowledge of the various issues at play within the space. Before joining AIS Health, she was managing editor at Employee Benefit News and Employee Benefit News Canada and managing editor at HemAware (a hemophilia publication), Lupus Living and Momentum (a multiple sclerosis publication). She has a B.A. in English and an M.A. in British literature from Arizona State University.

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