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President Trump and HHS Secretary Alex Azar. Photo: Nicholas Kamim/AFP/Getty Images

The Trump administration is making another incremental move toward lower drug prices, opening up a new part of Medicare to well-established competitive pressures.

The big picture: "Step therapy" allows insurance companies and pharmacy benefit managers (PBMs) to set up a system under which patients have to start with a cheaper drug first, switching to a higher-cost alternative only if they need to.

  • Step therapy is common in private insurance and in Medicare’s coverage for the kinds of drugs you pick up at a pharmacy.
  • Now, the administration is allowing the use of step therapy for some drugs that are administered at a doctor’s office — which are some of the most expensive drugs on the market.

How it works: The idea behind step therapy is partially just to switch patients to cheaper drugs. But there’s also a hope that it will prod more expensive products to offer bigger discounts, so that insurers won’t subject them to step therapy.

The impact is hard to predict. The new rules only apply to Medicare Advantage, not to traditional Medicare. MA accounts for about a third of all Medicare beneficiaries.

  • Some plans won’t adopt step therapy. Some MA enrollees will prefer the plans that don’t. And some of the relevant drugs don’t have cheaper alternatives.

Why it matters: The Trump administration’s top health officials have said they’re going to bring down drug prices through greater competition, and they’ve acknowledged a lot of that will have to happen without Congress.

  • However well or poorly that process ultimately works, this is what it looks like — a series of small, incremental changes.
  • Patients for Affordable Drugs, an advocacy group that often pushes the administration to be more aggressive on drug prices, supported the move.

What’s next: PBMs cheered yesterday’s announcement, but they’re next on the chopping block. The administration is working on regulations to roll federal protections for PBMs’ highly lucrative rebates.

Go deeper

2 hours ago - World

Iran rejects nuclear talks with U.S., for now

Iranian Foreign Minister Javad Zarif at Iran/EU talks in 2015. Photo: Carlos Barria/POOL/AFP via Getty

A spokesman for Iran’s Foreign Ministry said on Sunday that conditions are not ripe for informal nuclear talks between Iran, the U.S. and other world powers.

Why it matters: The Biden administration had proposed the talks as part of its efforts to negotiate a path back to the 2015 nuclear deal. The White House expressed disappointment with Iran's response, but said it remained willing to engage with Tehran.

2 hours ago - Health

U.S. sets weekend records for daily COVID vaccinations

A driver waits to receive the Pfizer-BioNTech Covid-19 vaccine in Inglewood, California on Feb. 26. Photo: Eric Thayer/Bloomberg via Getty Images

Just over 2.4 million coronavirus vaccinations were reported to the CDC on Sunday, matching Saturday's record-high for inoculations as seen in Bloomberg's vaccine tracker.

Why it matters: Vaccinations are ramping up again after widespread delays caused by historic winter storms. Over 75 million vaccine doses have been administered thus far, with 7.5% of the population fully vaccinated and 15% having received at least one dose.

GOP Sen. Bill Cassidy: "We will lose" if we continue to idolize Trump

Sen. Bill Cassidy (R-La.) told CNN's "State of the Union" Sunday he does not believe that former President Trump will, or should, be the Republican nominee for president in 2024.

What he's saying: Cassidy pointed out that "over the last four years, [Republicans] lost the House of Representatives, the Senate and the presidency. That has not happened ... since Herbert Hoover."

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