CMS (Centers for Medicare & Medicaid Services) just announced that the Trump Administration has instructed this agency to reduce drug costs for Medicare recipients starting in 2019.
This is a copy of the announcement released yesterday (April 2, 2018)
“The final policies announced today further the Trump Administration’s commitment to lowering drug prices. CMS is finalizing a reduction in the maximum amount that low-income beneficiaries pay for certain innovative medicines known as “biosimilars.” Other actions that CMS is finalizing to lower the cost of prescription drugs include:
- Allowing for certain low-cost generic drugs to be substituted onto plan formularies at any point during the year, so beneficiaries immediately benefit and have lower cost sharing.
- Increasing competition among plans by removing the requirement that certain Part D plans have to “meaningfully differ” from each other, making more plan options available.
- Increasing competition among pharmacies by clarifying the “any willing provider” requirement, to increase the number of pharmacy options that beneficiaries have.”
This is a significant step in the right direction after years of having drug prices skyrocket without any intervention from the government. Finally, Big Pharma is not in control.
This new policy was started in the hospitals where drug prices have continued to rise by allowing any hospital that participates in the 340B rule which essentially helps reduce the copayments on drugs. The 340B rule simply allows Medicare to buy drugs at lower pricing thus saving the hospitals and recipients money. The savings are estimated at over $320 million in 2018 alone. This will also have an effect on opioid addiction because these drugs will have to be purchased at specific pharmacies thus helping to control the cost of these medications.
This will also help plan designs in 2019 and beyond because the substituting of less expensive generic medications will be allowed to happen when necessary rather than wait for specific times during the year. This is also meant to promote more competition in new plans going forward. So seniors will have more options that are more competitive against each other to help reduce the cost of these plans.
Part of this ruling will also help to advance the Paperwork over Payments issue. The government is freeing the red tape usually associated with anything government related to help in the overall reduction of costs of medication. To this blogger, that is great news and everyone should be made aware of these changes.
Finally, the government is taking the correct steps to help reduce the cost of medications to seniors and everyone else. It’s about time.
The Barend Agency Inc.
Len Barend, broker