Posted by Michael Wonder on 29 Aug 2018
CMS provides new flexibility to increase prescription drug choices and strengthen negotiation for Medicare enrollees
29 August 2018 - The Centers for Medicare & Medicaid Services issued a memo today to Medicare Part D plans, which cover prescription drugs that beneficiaries pick up at a pharmacy, offering plans new tools and flexibility to expand choices and lower drug prices for patients.
Currently, if a Part D plan includes a particular drug on its formulary, the plan must cover that drug for every FDA approved indication, or patient condition, even if the plan would otherwise instead cover a different drug for a particular indication. The requirement to cover drugs in this manner can discourage Part D plans from including more drugs on their formularies and limit their power to negotiate discounts.
Today’s memo explains that starting in 2020, plans will have new flexibility to tailor their formularies so that different drugs can be included for different indications. This policy, known as “indication-based formulary design,” is used in the private sector and will enable Part D plans to negotiate lower prices for patients. Targeted formulary coverage based on indication will also provide Part D beneficiaries with more drug choices and will empower beneficiaries to select a plan that is designed to meet their unique health needs.
