Jul 10, 2019

Senate considering big changes to how Medicare pays for drugs

Sens. Ron Wyden and Chuck Grassley. Photo: Bill Clark/CQ Roll Call

A group of senators is considering a plan to limit how much drug companies can raise their prices in Medicare's prescription drug benefit, among other changes.

The big picture: Some of the proposals would majorly restructure the way Medicare pays for drugs and are sure to draw massive industry pushback — if lawmakers can even agree to them.

Driving the news: Senate Finance Committee Chairman Chuck Grassley and the committee‘s top Democrat, Ron Wyden, have been negotiating a drug price package. Grassley briefed Republican members yesterday on the discussions.

  • There's general agreement on a handful of measures, two Senate aides familiar with the negotiations said, including restructuring how Part D's catastrophic phase is financed, capping seniors' out-of-pocket costs and limiting price increases in Part B to the inflation rate.
  • Drug companies — which currently don't pay any portion of the catastrophic phase — would be on the hook for some of it, but it's not yet clear how much, according to the aides and a senator who was in yesterday's meeting.

Yes, but: Limiting price increases in Part D to the inflation rate is more controversial, as is a proposal to allow Medicaid to pay for gene therapies over time and based on their outcomes.

  • "I don’t think you have to do government-required pricing, or price baking, to be able to control costs," said Sen. Johnny Isakson.

Administration officials, including HHS Secretary Alex Azar and the head of the Domestic Policy Council, Joe Grogan, attended yesterday‘s meeting.

  • "The White House and HHS are unified in support of what Chairman Grassley is doing to help protect seniors from outrageous drug prices, improve Medicare for the long haul, and take needed steps forward in how Parts B and D operate," a senior White House official said.

Go deeper

White House regroups on drug prices

President Trump and HHS Secretary Alex Azar. Photo: Chip Somodevilla/Getty Images

The Trump administration is looking for Congress to implement major changes to how the federal government pays for drugs, following a week of setbacks to its drug pricing agenda.

Yes, but: The major exception to this is the administration's proposal to tie what Medicare pays for some drugs to rates in other countries.

Go deeperArrowJul 12, 2019

Trump's next move on lowering drug prices

Phot: Chip Somodevilla/Getty Images

The White House is preparing another big executive order on drug prices, Reuters scooped last night.

The big picture: Citing industry sources who had discussed the plan with the administration, Reuters says that it would likely seek to lower prices in Medicare Part D, which covers drugs you pick up at the pharmacy counter. The administration's most sweeping proposal to date — to piggyback off of the lower prices in European countries — was limited to Part B, which covers drugs administered by a doctor.

Go deeperArrowJul 26, 2019

Senators release bipartisan drug pricing bill

Sens. Ron Wyden and Chuck Grassley. Photo: Mark Wilson/Getty Images

The Senate is ready to start moving forward with a bipartisan bill to lower the cost of prescription drugs, after Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) released a detailed outline of the proposal this morning. The Finance Committee will debate the bill Thursday.

What's next: The Senate package would redesign Medicare's drug benefit and allow new payment models in Medicaid, among other changes. And it puts drug prices squarely at the center of Congress' fall agenda: House Speaker Nancy Pelosi's top health care aide said yesterday that House Democrats will introduce their own bill after the August recess.

Keep ReadingArrowJul 23, 2019