The Trump administration's proposal to lower Medicare Part B drug prices has been met with plenty of pushback—and it's not just coming from pharma.
Groups including the American Hospital Association, American Medical Association, Community Oncology Alliance and others have criticized the plan in letters to Centers for Medicare and Medicaid Services administrator Seema Verma. Specifically, AHA says the proposal could undermine 340B hospitals, increase hospitals’ operational and regulatory burden, reduce reimbursements and increase vendor fees.
AMA, for its part, voiced concerns over administrative burdens and said the plan could reduce patient access. Meanwhile, the Community Oncology Alliance wrote that it has “serious concerns about its impact on cancer patient care and even its legality.”
In October, the administration sparked an uproar by unveiling a plan to force lower prices for Medicare Part B drugs—those administered by doctors and hospitals—over a 5-year span under an “International Pricing Index” system. The goal is for the U.S. to pay prices closer to what a group of 16 other countries pay.
Currently, drugs in the Part B program are reimbursed under an “Average Selling Price” system under which companies calculate list prices and average rebates, and CMS reimburses providers with a drug’s average selling price plus 6% for their expenses.
Unsurprisingly, trade groups PhRMA and BIO aren't big fans of the idea either, and they hit back at the IPI proposal immediately. In an October statement, PhRMA CEO Stephen Ubl said the administration “is imposing foreign price controls from countries with socialized health care systems that deny their citizens access and discourage innovation.” BIO CEO Jim Greenwood said such a strategy “puts America’s patients last and diminishes their hope for a better future.”
The International Pricing Index is only one strategy underway in an ongoing effort to lower prescription drug costs. The HHS has also allowed Medicare Advantage plans to implement step edits and negotiate with drugmakers for better pricing. It's working to force drug prices in TV ads, too.
At the FDA, regulators are approving generics at a record pace and are working to promote biosimilar competition. And with Democrats taking control of the House of Representatives, industry watchers expect a steady stream of drug pricing talk in Congress this year as the 2020 presidential election nears.