President Trump proposed last week that Medicare pay for certain prescription drugs based on the prices paid in other advanced industrial countries—a huge change that could save money for the government and for millions of Medicare beneficiaries.
As part of a demonstration project covering half the country, Medicare would establish an “international pricing index” and use it as a benchmark in deciding how much to pay for drugs covered by Part B of Medicare.
Mr. Trump’s announcement was part of a flurry of initiatives emerging from the White House ahead of next month’s midterm elections, in which Democrats hope to take control of the House and possibly the Senate. Democrats have focused their campaigns on health care, hammering Republicans on the high cost of prescription drugs and asserting that Republicans would undo protections for people with pre-existing medical conditions—one of the most popular provisions of the Affordable Care Act.
Mr. Trump’s announcement came a few hours after his administration released a government study that said Medicare was paying 80 percent more than other advanced industrial countries for some of the most costly physician-administered medicines. The report compares prices charged by drug manufacturers in the United States and 16 other countries for 27 drugs that are covered by Part B of Medicare. The reports says, “Over all, prices and reimbursement rates for Part B drugs are significantly higher for U.S. providers than purchasers outside the U.S...Medicare could achieve significant savings if prices in the U.S. were similar to those of other large market-based economies.”
The new method of payment proposed by the Trump administration would be phased in from 2020 to 2025. Overall savings for American taxpayers and patients are projected to total $17.2 billion over five years, said Alex Azar, the secretary of health and human services.
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