28 October 2018 - According to a recently released Department of Health and Human Services report, Medicare is paying 80% more than other advanced industrialised nations for some of the most costly physician-administered medicines.

On October 25th, the Trump Administration announced plans to reduce the prices Medicare pays for physician-administered drugs. Under the proposed approach, the Centers for Medicare and Medicaid Services (CMS) would experiment with a new way of setting prices for most physician-administered drugs paid for by Medicare Part B.

Prices of Medicare Part B drugs would be gradually pegged to a new international index of prices rather than the average sales price established in the U.S. market. The five-year experiment would apply to half the country, and be carried out as a demonstration project through CMS’s “innovation centre,” starting in late 2019. Interestingly, the Administration claims it has the authority to move forward with such a demonstration project without Congressional approval, based on provisions included in the Affordable Care Act (ACA). Namely, ACA created a CMS innovation centre, which has wide discretion to conduct demonstration projects such as the proposed one.

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