Monday, 19 November, 2018

Trump introduces plan to lower Medicare drug costs, end 'global freeloading'

Ruby Wallau for STAT Ruby Wallau for STAT
Melissa Porter | 28 October, 2018, 22:20

Since the Affordable Care Act came into effect, Republicans have been determined to strip away the law's most progressive proposals.

In an effort to control prescription drug prices, HHS is proposing a mandatory demonstration that would test a new Medicare reimbursement model for certain physician-administered drugs payable under Part B.

At issue are drugs in the Medicare Part B insurance plan, which covers physicians' services. "The proposal more aggressively moves to have the government intervene to lower drug prices than proposals often favored by Republicans", The Hill's Peter Sullivan says. Under the new model, Medicare would pay doctors prices more closely aligned with the prices other countries pay. A new proposal aims to reduce reimbursement for medicines administered to seniors under the Part B benefit to an amount pegged to the average price paid in foreign industrial nations.

Medicare pays the average sales price in the United States plus an extra fee based on a percentage of the drug's price. So far, Republicans have been on the defensive when it comes to healthcare, especially when it comes to the GOP's attacks on preexisting condition protections, so the speech may be an attempt to reframe the healthcare conversation as Americans head to the polls.

Less than two weeks before the midterm elections, President Donald Trump plans to make an announcement on the cost of prescription drugs.

After almost a decade of promises to repeal and replace the Affordable Care Act, Republicans have struggled to message health care on the campaign trail. His administration has worked to chip away at several ACA requirements, including supporting GOP repeal of the individual mandate in the party's tax overhaul and supporting waivers for Medicaid work requirements.

In advance of Trump's speech, HHS released a report that found US prices for the top drugs administered in doctors' offices are almost twice as high as in foreign countries.

An analysis by HHS of USA and global prices for leading Part B drugs finds that Medicare pays almost twice as much as it would pay for the same or similar drugs in other countries. In the USA, large swaths of the poor and uninsured can be left out.

Thursday's address represents the next leg in the Trump administration's quest to appear tough on the pharmaceutical industry. Trump argued that other countries were being "very disrespectful" by selling their prescription drugs to Americans for higher prices than their citizens are paying for them.

HHS Secretary Alex Azar criticized a system in which other countries to pay significantly less for drugs than the USA government. Nothing special, just the prices that other countries pay.

Trump "wants the kind of discounts that are applied in Germany and the Netherlands, for the reference reimbursement prices to be applied in the US", said Rodrigo Moreno-Serra, associate professor of global health economics at the University of York in England. "President Trump asked us to fix this problem and here's how we plan to do it".

The Trump administration is no longer reimbursing for individual payments on the basis of the price of the drug. "There was only a single case in which the United States was paying lower than the worldwide average".

"Under our new proposed payment system, doctors will be paid a flat rate".

Officials said the aim is to introduce more competition into Part B, whose spending on drugs has doubled since 2006.

Already, however, there is skepticism about how much this will impact the drug industry.

The proposed changes are related to the Medicare Part B program that pays for medications that patients receive in hospitals or in doctor's offices.

Physician-administered drugs cost Medicare $27 billion in 2016. Drugs sold at the pharmacy are covered under Medicare Part D. He made his latest announcement just ahead of the November 6 elections, with health care high among voters' concerns.

Trump also signed sweeping legislation at the White House on Wednesday tackling the opioid crisis, although some experts say it is only a first step.

The president in May also claimed drug companies would be announcing "massive" voluntary price cuts. Trump can complain about high drug prices all he wants. The IPI model instead would engage private sector vendors to offer certain drugs to participating physicians and hospitals at a rate based on a Target Price derived from an global price index. However, such patients have tended to seek out cheaper alternatives, leading to savings. The proposed rule could come in spring 2019, and Azar said the new model could begin in late 2019 or early 2020.