On November 20, 2020 the President issued new regulations that could lower the prices Americans pay for many prescription drugs. These two finalized rules that have long been in the making would:
- Tie what Medicare pays for medications administered in a doctor's office to the lowest price paid among a group of other economically advanced countries.
This is commonly referred to as the "most favored nations" approach. The President's Administration estimates that this could save $28 billion over seven years for Medicare recipients through lower copays and would take effect January 1, 2021.
This ruling would also:
- Require that drugmakers for brand-name pharmacy medications give Medicare enrollees rebates that now go to insurers and middlemen called pharmacy benefit managers.
The international pricing rule would cover many cancer drugs and other medications delivered by infusion or injection in a doctor's office. It would apply to 50 medications that account for the highest spending under Medicare's "Part B" benefit for outpatient care. This rule will also change how hospitals and doctors are paid for administering the drugs, in an effort to try and remove incentives for using higher cost medications.