Trump administration backs off Medicare drug pricing rule

Trump administration backs off Medicare drug pricing rule
© Getty Images

The Trump administration on Thursday backed off a controversial Medicare drug pricing proposal that would have allowed insurers to exclude certain drugs if prices rise faster than inflation.

In a final rule, the administration said it was leaving in place the current policy about Medicare’s “protected classes” of drugs.

Under current law, private Medicare health plans are required to cover all or “substantially all” drugs in six “protected” classes, such as HIV treatments, antidepressants, drugs to treat epileptic seizures, and cancer drugs, regardless of cost.

Last fall, the administration proposed allowing health plans to exclude protected drugs with price increases that are greater than inflation, as well as certain new drug formulations that were not a “significant innovation” over the original product.

ADVERTISEMENT

The move, which was aimed at lowering drug costs for private Medicare plans, was vigorously opposed by some patient advocacy groups, which argued the plan would have harmed access to medicine.

In a statement, Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma acknowledged the feedback the agency received about the policy. However, she said seniors in Medicare plans are still paying more than commercially insured beneficiaries for the same drugs.

The administration “remains concerned that prescription drug companies are offering seniors in Medicare substantially smaller discounts for protected class drugs than are offered in the commercial market,” Verma said.

The administration said it will allow private Medicare plans to use two controversial policies called prior authorization and step therapy — requiring patients try cheaper drugs before turning to more expensive ones regardless of what their doctor prescribes.

Anti-HIV drugs will be exempted from the rules, the administration said, but the other “protected classes” will not be.

That policy has been in place since 2006, CMS said, and only impacts patients who are first starting to take the drugs.