Trump Administration Moves to Give Medicare Drug Plans More Control Over Their Offerings

The Trump administration yesterday pushed to give Medicare drug plans more options in the products they can offer beneficiaries in an attempt to increase their purchasing power and reduce drug prices, reports the Washington Examiner . The Centers for Medicare and Medicaid Services (CMS) announced that, beginning in 2020, Medicare prescription drug plans can leverage an indication-based formulary that expands the choices of offerings they can cover, letting plans chose cheaper drugs in certain cases. "This is a significant step in modernizing the successful Medicare Part D program by giving plans the tools that serve beneficiaries well in the private sector," said Health and Human Services Secretary Alex Azar. Currently there are limits on which drugs can be covered on a Part D plan's formulary, and CMS said "if a Part D plan includes a particular drug on its formulary, the plan must cover that drug for every Food and Drug Administration-approved indication, or beneficiary condition, even if the plan would otherwise instead cover a different drug for a particular indication." The agency noted that, starting in 2020, the indication-based formulary will allow plans to tailor their formularies to include different drugs for different clinical indications. Earlier in August, CMS permitted plans on Medicare Advantage to deploy the step therapy method to save costs. This option entails giving a beneficiary a cost-effective treatment first and then transitioning them to a costlier treatment if it does not work. However, the American Cancer Society's Cancer Action Network warned step therapy could pose a hindrance to people with cancer from receiving needed therapy.