President Trump will propose lowering prescription drug costs for Medicare beneficiaries by allowing them to share in rebates that drug companies pay to insurers and middlemen, reports ABC News.
A senior administration official outlined the plan on Thursday, ahead of the release of Trump’s 2019 budget plan next week. Pharmaceutical companies now pay rebates to insurers and pharmacy benefit managers to help their medications gain a bigger slice of the market.
Under Trump’s proposal, seniors covered by Medicare’s popular “Part D” prescription benefit would be able to share in the rebates for individual drugs that they purchase at the pharmacy.
Trump’s budget would also expand Medicare’s “catastrophic” drug benefit so that many seniors with very high costs would not face copayments. Seniors with high drug bills are currently still responsible for 5 percent of the cost of their medications. With some new drugs costing $100,000 a year or more, patient costs add up quickly.
Trump’s new budget would put him in the middle of a tug-of-war between drug companies on one side and insurers and pharmacy benefit managers on the other, with billions of dollars at stake.
Insurers and pharmacy benefit managers say the reason drug costs are so high is that drug companies are free to charge what the market will bear, ABC reports.
The pharmaceutical industry says it is the middlemen who are the problem because they keep rebates paid by drug makers instead of passing them on to patients. Insurers counter that rebates are passed on in the form of lower monthly premiums for everybody.
The Trump administration’s new proposals come on top of a long list of Medicare changes in the congressional budget deal. Medicare is the government’s premier health insurance program, covering about 60 million seniors and disabled people.
Lawmakers would shift a greater share of Medicare drug costs to the pharmaceutical industry. They also want to eliminate the drug coverage gap known as the “doughnut hole” one year earlier than currently scheduled, in 2019 instead of 2020.
“On the whole, I think this is a good bill for people with Medicare,” said Joe Baker, president of the Medicare Rights Center, said of the congressional legislation. “This tilts toward getting a lot of good things done.”
Democrats are split over the overall measure, but the Medicare provisions appear to have support from both parties. Hopefully, Democrats can put aside politics for once and realize that this bill would be good for all, especially those under Medicaid.