The Trump administration is pushing back at big pharmaceutical companies with the new Medicare plan. On Monday, President Trump proposed to cut costs for Medicare by reducing the number of prescription drugs that are made available to individuals with AIDS, depression, schizophrenia, cancer, and other conditions.
Under the new proposal, health insurance plans that provide drug coverage to Medicare beneficiaries would no longer have to give all of the drugs that in are in six ‘protected classes.’ This new change would not take effect until 2020 and would lead to lower out-of-pocket costs for Medicare patients, the Trump Administration said.
New Medicare Plan Fights Against Big Pharma
“President Trump is following through on his promise to bring tougher negotiation to Medicare and bring down drug costs for patients, without restricting patient access or choice,” said Alex M. Azar II, the secretary of health and human services.
Currently, 45 million individuals in the US have outpatient drug coverage through Part D of Medicare. The problem? Pharmaceutical companies get very little push back on what they charge for drugs because they know Medicare’s prescription drug plan must cover almost all drugs in those six protected classes.
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Private-market discounts for drugs in protected classes are usually around 20 to 30 percent, but Azar states that the average discount across all protected classes in Part D is just six percent. By allowing the private insurance companies to dictate which drugs they will cover in these six classes of drugs, it could potentially cause the pharmaceutical companies to lower their prices or risk not selling any of these drugs at all.
If patients are unhappy with the restrictions on their current drug plan, they have the freedom to choose a different plan. The new Medicare plan would also require drug plans to notify the doctor’s offices about the cost of the drugs they are prescribing to their patients.
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