Health Affairs September 9, 2019
Last fall, the Trump administration announced that it was exploring an international reference pricing model for drugs covered under Part B of Medicare (which are generally drugs administered by a physician, such as many chemotherapy drugs). Under this model, the amount Medicare would pay for these drugs would be set based on the average price paid in a selected group of other high-income countries.
The administration has argued for a focus on Part B drugs because of the limited role that competitive forces play in determining what Medicare pays for these drugs. Medicare Part D plans, Medicare Advantage (MA) plans, and commercial insurance plans all negotiate prices with manufacturers; they use a variety of tools—such as formularies, preferred tiers, step...