February 12, 2018

Trump admin outlines policies intended to lower Rx drug prices

Daily Briefing

    The White House Council of Economic Advisers on Friday released a report that outlines several policy recommendations for lowering prescription drug prices in the United States.

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    Report details

    The report—which was released in advance of the White House's budget proposal—cites recent polling data that show prescription drug prices are a top concern among U.S. residents.

    Editor's note: Check out Daily Briefing's Tuesday edition for a full breakdown of the health care provisions in President Trump's proposed budget.

    President Trump has repeatedly expressed interest in addressing prescription drug prices, and the new report provides insight into the administration's potential plans for tackling the issue, according to CQ News.

    Policy recommendations

    The report recommends several reforms to Medicare, Medicaid, and FDA.

    For instance, the report recommends reducing incentives for Medicare providers to prescribe high-priced drugs and boost incentives to prescribe lower-priced drugs. To do so, the report proposes:

    • Bolstering transparency in pricing data reporting;
    • Folding Medicare Part B drug coverage into Part D, which the report says provides "better structured" price competition; and
    • Unlinking physician reimbursement from drug prices.

    HHS Secretary Alex Azar in a Thursday press briefing on the topic said moving outpatient drug coverage into Part D would yield savings by allowing the companies that administer the program to negotiate on behalf of the government.

    In addition, the council in the report suggested:

    • Allowing states to band together in groups of up to five to negotiate drug prices for Medicaid;
    • Accelerating FDA's accelerate drug approval process, particularly those for biosimilar drugs, to increase competition;
    • Capping out-of-pocket spending for Medicare Part D beneficiaries;
    • Ensuring Medicare beneficiaries benefit from discounts that pharmacy-benefit managers negotiate with pharmaceutical companies; and
    • Redistributing hospital savings generated under the 340B program.

    The council did not call for allowing the government to directly negotiate Medicare drug prices or to import drugs from abroad (Siddons/McIntire, CQ News, 2/9 [subscription required]; Burton, Wall Street Journal, 2/9; Kacik, Modern Healthcare, 2/9; Edney/Sink, Bloomberg, 2/9).

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    Through the years Medicare has grown more complicated, including private supplemental insurance and prescription drug coverage. Download our Medicare Part D cheat sheet to learn how the Medicare prescription drug benefit works, and why it’s so important for provider organizations:

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