Get Docs Out of Drug-Buying Business, HHS Chief Urges – Azar details plan for competitive bidding program in Medicare Part B

Source: MedPage Today, Joyce Frieden, May 14, 2018

WASHINGTON — Doctors should get out of the business of making money off of providing prescription drugs to Medicare beneficiaries, Health and Human Services Secretary Alex Azar said Monday.

Currently, physicians who administer drugs paid for under Medicare Part B — which covers drugs administered in the physician’s office — pay for the drug themselves up front and then are reimbursed at the average sales price plus a 6% markup. This system “gets into the notion of physicians or facilities making money off the arbitrage between acquisition price and reimbursement,” Azar explained at a briefing with reporters following a speech he gave on President Trump’s plan to lower the cost of prescription drugs.

The idea of such a program isn’t entirely new. “We believe the market has developed sufficiently in terms of the power and scale of group purchasing organizations, specialty pharmacies, specialty distribution [companies] and pharmacy benefit managers that there are now plenty of players in the space compared to when this was tried over a decade ago,” Azar said. The current players “could actually execute a program like this well, secure substantial discounts, and work effectively with physicians for whom the ‘buy-and-bill’ model doesn’t make sense, and that’s even assuming it’s done as a voluntary program,” he added.

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Source: MedPage Today, Joyce Frieden, May 14, 2018