President Donald Trump signed an executive order on Sept. 13 aimed at aligning prescription drug prices with those found in other countries.
Under the new executive order, which replaces a version signed on July 24, Medicare would pay the same price for certain drugs covered under Part B and Part D as other countries pay, which the order refers to as the most-favored-nation price. The most-favored-nation price is the “lowest price, after adjusting for volume and differences in national gross domestic product, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organization for Economic Co-operation and Development (OECD) that has a comparable per-capita gross domestic product.”
The Centers for Medicare and Medicaid Services will be required to undertake demonstrations to align prices for certain drugs in both Medicare Part B and Part D with prices for the same drugs in other countries. High-cost drugs and biological products covered under Part B will be included in the demonstration. Part D drugs with limited competition and high beneficiary out-of-pocket costs will also be included. The proposals will require rule-making.
The International Pricing Index Model (IPI Model) for Medicare Part B Drugs proposed rule (Washington Highlights, Jan. 10, 2019) that focuses on prices for high-cost Part B drugs has been under review at the Office of Management and Budget for more than a year.