President Donald Trump’s administration is working to get competition into the Medicare plans so the prices of prescription medications will drop, Health and Human Services Secretary Alex Azar said Wednesday.
“The president promised that he would be the first president to ever bring negotiation and discounts to this part B drug program, which is where Medicare pays for drugs that the physicians administer,” he told Fox Business’ Maria Bartiromo on “Mornings With Maria.” “Currently, we just pay sticker price.”
Less than 90 days after Trump announced his plan, though, Azar said the administration has brought “historic negotiation and management of formularies to our Medicare Advantage plans, which provide benefits to one-third of our Medicare beneficiaries.”
This allows them to merge the benefits of Medicare part B with the retail drugs in part D and “manage all of those together as part of the Medicare Advantage plan. It’s really a historic moment for Medicare and for drug pricing in this country.”
Competition is vital to making the prices competitive, and that is what is happening in the private sector, said Azar.
“In the private sector, our insurance plans are able to do this and they negotiate about 15 percent to 20 percent average rebates in the commercial space for these kind of drugs,” Azar said. “We spend about $12 billion on part B drugs in Medicare Advantage right now. So, if you bring that 15 percent to 20 percent rebating or discounting into that space, that’s significant savings for the program and for seniors. What we’ve required is that those savings have to be shared back with the senior citizen.”
That means more than 50 percent will be returned to seniors through enhanced benefits or cash back, and then by the year 2020, the full year the program will be implemented, the plans will compete on reduced premiums, he added.
Azar said the administration is also committed about transparency when it comes to healthcare, and has put out a rule requiring hospitals and providers to post rates online so they are accessible.
He also discussed the national EpiPen shortage, noting drug shortages are an important issue.
“It comes about as manufacturers have trouble producing the product,” Azar said. “It’s important to remember that is one product, but it doesn’t mean there’s a shortage of epinephrine available for children. It’s a particular delivery device. That’s one of them. We’re working to solve the shortage. It doesn’t mean there is unavailable product for this very important type of medicine that children and others often need especially as we return to school.”
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