U.S. to Consider Expanding Medicare Drug Price Negotiation

U.S. Department of Health and Human Services (HHS) Secretary Alex Azar announced yesterday that the Trump administration is considering expanding Medicare's authority to negotiate drug costs by giving private payers a role in setting the price of medications administered in hospitals and doctors' offices, reports Reuters . Azar noted that the president views tougher negotiation as key to the plan, and his agency will consider an alternative system for purchasing Medicare Part B drugs, which are administered by a healthcare provider and covered directly by the government. The administration would seek to permit private payers to negotiate the price of those medicines, as health insurers and pharmacy benefit managers (PBMs) currently do in Medicare Part D, which covers drugs that beneficiaries get at the pharmacy. HHS officials said at a press briefing that they could trial the transfer of certain drugs from Medicare Part B to Part D in a pilot program, but did not state when that might begin. However, the American Enterprise Institute's Joe Antos noted most expensive drugs will remain in Part B, constraining the proposal's ability to significantly lower prices. Leerink analyst Ana Gupte said firms best positioned to participate in the new proposal would be insurers that have their own PBMs, Part D plans, and Medicare Advantage business, such as UnitedHealth Group, Humana, Anthem, and Cigna if the Trump administration sanctions its merger with Express Scripts.