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Trump Administration Decides Against Controversial Changes to Medicare Drug Program

Last week, the Trump administration decided to shelve a proposed rule that sought to change the way Medicare prescription drug plans (PDPs) and their pharmacy benefit managers (PBMs) negotiate and pay for drugs within Medicare Part D. The now-abandoned proposal would have eliminated certain types of rebates that currently go from drug manufacturers to PBMs, anticipating that any resulting reductions in price would be passed on to beneficiaries at the point of sale.

As outlined in our comments, Medicare Rights strongly supported the goals of the proposal but had concerns about the lack of a guarantee that rebates would reach consumers, as well as the cost of the rule to the Medicare program and to beneficiaries. Importantly, there was nothing in the proposal that would have led directly to a reduction in out-of-pocket costs or drug prices.

The decision not to finalize the rule comes on the heels of a setback to the administration’s attempt to require drug manufacturers to list prices in TV ads.

With these components of their larger drug pricing strategy stalled, the administration is likely to double down on their remaining proposals. This includes an effort to lower costs in Medicare Part B by more closely aligning the price of some drugs with the prices paid in other countries. Called an International Pricing Index (IPI), this approach is also not without controversy. While it could potentially lead to savings for people with Medicare, it could also have the opposite effect, leading to higher costs and reduced access to care.

Medicare Rights appreciates the administration’s stated goal of reducing drug prices, and we urge any rulemaking to proceed in a thoughtful, deliberate manner that considers the various impacts any changes may have on people with Medicare and the program itself. We must continue to pursue real, lasting reforms that will ease the significant burden of out-of-pocket costs many people with Medicare and their families face. This cannot rely on transparency or shopping alone; we must also directly address the underlying problem of high and rising drug prices.

Read more about the withdrawn rebate changes.

Read more about drug prices in TV ads.

Read more about the International Pricing Index.

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