Archives     Advertise     Editorial Calendar     Subscribe     Contact Us    


HHS Advances Payment Model to Lower Drug Costs


 

In late October, the U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS), announced and sought input on a new "International Pricing Index" (IPI) payment model to reduce what Americans pay for prescription drugs.

Under the IPI model, described in an Advance Notice of Proposed Rulemaking (ANPRM), Medicare's payments for select physician-administered drugs would shift to a level more closely aligned with prices in other countries. Overall savings for American taxpayers and patients are projected to total $17.2 billion over five years.

"In an era where the pharmaceutical industry is pricing drugs at levels approaching a million dollars -- and jeopardizing the future of our safety net programs -- the time has come to fix the perverse incentives in the Medicare program that are fueling price increases," said CMS Administrator Seema Verma.

The move from current payment levels to payment levels based on international prices would be phased in over a five-year period, would apply to 50 percent of the country, and would cover most drugs in Medicare Part B, which includes physician-administered medicines such as infusions. The model purports to "correct existing incentives to prescribe higher-priced drugs and, for the first time, address disparities in prices between the United States and other countries." Since patient cost sharing is calculated based on Medicare's payment amount, patients should see lower costs under the model.

For the first time in Medicare, the IPI model would create a system in which private vendors procure drugs, distribute them to physicians and hospitals, and take on the responsibility of billing Medicare. The plan is that vendors would aggregate purchasing, seek volume-based discounts, and compete for providers' business, thereby creating competition where none exists today. Under the model, instead of the current percentage-based add-on payment, physicians and hospitals would receive a set payment amount for storing and handling drugs that would not be tied to drug prices to remove any financial incentive to prescribe higher-cost drugs.

AMA President Barbara L. McAneny, MD, responded to the proposed rule with the following statement: "Physicians share their patients' concerns with the high cost of prescription drugs. We appreciate that the Trump Administration is working to address this important issue. The Administration's proposal for an International Pricing Index Model for Part B drugs raises a number of questions, and we need to have a greater understanding of the potential impact of the proposal on patients, physicians, and the health care system. We look forward to working constructively with the Administration as it seeks feedback."

TAGS:

WEB:

IPI Policy Brief

Fact Sheet

Comments

 
Share:

Related Articles:


Recent Articles

Study Finds Certain Genetic Test Not Useful in Predicting Heart Disease Risk

A Polygenic Risk Score -- a genetic assessment that doctors have hoped could predict coronary heart disease (CHD) in patients -- has been found not to be a useful predictive biomarker for disease risk, according to a Vanderbilt study published in the Journal of the American Medical Association.

Read More

Tennessee Infants Exposed to Hep C at Birth Often Not Tested for Virus

Most Tennessee infants exposed to hepatitis C at birth are not later tested to see if they acquired the virus, according to a study by researchers at Monroe Carell Jr. Children's Hospital at Vanderbilt and the Vanderbilt Center for Child Health Policy.

Read More

THA, TMA, TNA Outline Legislative Priorities

With the Tennessee General Assembly back in full swing, the state's major healthcare associations outline 2020 priorities.

Read More

Cardiac Innovation in Nashville

From transplants to trials, Nashville hospitals are leading the way in cardiac care.

Read More

A Modern Love Story: Where Technology, Healthcare & Construction Go Hand-in-Hand

Technology has changed every aspect of our lives. In fact, I had a healthy laugh a few weeks ago when I showed my children an old rotary phone and, get this, they did not know what it was.

Read More

Reeves/Smith Bill to Prevent Next Generation of Nicotine Addiction Garners Broad Industry Support

In late January, a group of more than 25 organizations from across Tennessee announced their support for legislation that seeks to prevent the next generation of nicotine addicts in the state.

Read More

Physician Spotlight: A Heart for Healing

TriStar Summit cardiologist Kristen Kerr is passionate about education, improving outcomes in women's heart health.

Read More

Heart Monitor

Read More

Ifetroban for Treating DMD-Associated Cardiomyopathy

Following successful preclinical trials and FDA funding, Cumberland Pharmaceuticals is preparing to launch a new Phase II trial of ifetroban to treat cardiomyopathy in Duchenne Muscular Dystrophy patients.

Read More

Endocrine Society Celebrates Progress from Bench to Bedside

Endocrine Society Chief Professional & Clinical Affairs Officer Robert Lash, MD, discusses the field, annual meeting, road shows and more.

Read More

Email Print
 
 

 

 


Tags:
CMS, HHS, International Pricing Index, IPI, Medicare, Medicare Part B, Prescription Drugs, Seema Verma
Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: