Trump Medicare Drug Pricing Model Could Cover Just Four Drugmakers
Hadisur Rahman, JadeTimes Staff
H. Rahman is a Jadetimes news reporter covering the USA
A new Trump administration policy aimed at lowering prescription drug costs for Medicare patients could ultimately apply to only four pharmaceutical companies, after the government created exemptions for manufacturers that have reached separate pricing agreements with the White House.
The policy is part of a Medicare drug-pricing initiative known as GLOBE, which seeks to change how certain hospital-administered medicines covered by Medicare are priced.
Under the final rule published Wednesday, the Centers for Medicare & Medicaid Services plans to exempt drugmakers that have entered separate “most favored nation” pricing agreements with the Trump administration from participating in the GLOBE model.
Only Four Companies Could Remain
The final rule indicates that the number of drug manufacturers subject to the model could fall to four after the exemptions are applied.
A footnote in the regulation identifies the potential number but does not name the companies that would remain covered by the program.
The exemptions could significantly narrow the scope of the pricing initiative compared with the administration's original proposal.
Projected Medicare Savings Slashed
The final version of the policy also contains a major reduction in the government's projected financial savings.
The Department of Health and Human Services now estimates that the program will reduce Medicare Part B spending by approximately $440 million over the model period.
That figure is dramatically lower than the approximately $11.9 billion in savings projected when the rule was initially proposed.
HHS did not immediately explain why its estimate of potential savings had fallen so sharply.
Drugmakers Have Signed Separate Agreements
The Trump administration has reached separate pricing agreements with more than two dozen pharmaceutical companies since launching its broader drug-pricing initiative last year.
The companies include several of the world's largest drugmakers, such as Pfizer, Eli Lilly and Novo Nordisk.
The separate agreements are intended to establish lower drug prices under arrangements negotiated with the administration.
According to estimates from the White House Council of Economic Advisers, the broader drug-pricing effort could generate approximately $27.6 billion in savings for state governments and $36.6 billion for the federal government over the next decade.
Questions Remain Over the Model's Impact
The reduced number of participating manufacturers and the sharp decline in projected Medicare savings could limit the direct financial impact of the GLOBE model.
The final rule nevertheless represents another component of the administration's wider effort to reduce prescription drug costs and change how pharmaceutical prices are determined for government programs.
The actual impact of the model will depend on which manufacturers ultimately remain subject to its pricing requirements and how the program is implemented.
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