Trump Administration Drug-Pricing Proposal Includes Big Changes to Medicare Part B

Last week, the Department of Health & Human Services (HHS), the department of the federal government that oversees the Medicare program, previewed some changes it will be proposing for Medicare Part B prescription drug coverage. The administration claims these changes will lower the cost of Part B medications.

Most prescription drugs are covered under Medicare Part D, but a select number of drugs—usually ones that are administered by providers—are covered under Part B. These drugs tend to be very expensive and are generally used to treat serious conditions such as cancer, End-Stage Renal Disease, autoimmune disorders, or in the event of an organ transplant.

The administration is proposing several big changes, including changing how physicians and hospitals are paid for drugs to decrease the incentive to prescribe higher-cost drugs, introducing new middlemen as distributors of the drugs, and linking the price of drugs more closely with the prices paid in other countries. This last proposal, called an “International Pricing Index,” is likely to be especially controversial.

Historically, people with Medicare have struggled to afford Part B medication and Medicare Rights is pleased that HHS is exploring opportunities to lower Medicare drug prices, including through reforms to the Part B payment model. We have supported past proposals to test value-based payment strategies for Part B medications and welcome a renewed focus on better aligning the current model’s incentives.

It is absolutely vital that any efforts to make prescription drugs more affordable for people with Medicare do not actually increase costs or reduce their access to care. In addition, while today’s proposal focuses solely on Part B drugs, we hope HHS and Congress will eventually turn their eyes to Part D drugs and also work to lower prices at the pharmacy counter.

The time is right for real action on prescription drug pricing. We look forward to reviewing the details of the administration’s proposal, and to working with policymakers to pursue meaningful solutions that lower costs for people with Medicare.