International reference payment model could save Medicare Part D over $70 billion

Healthcare Finance News May 6, 2019
Deirdre Fulton

Prices for the drugs, which range from diabetes medications to antivirals to immunosuppressants, are 3.2 to 4.1 times higher in the U.S.

A new study from researchers at Johns Hopkins supports using an external reference pricing model to lower prescription drug costs, a move the authors say could have saved Medicare Part D up to $78.8 billion in 2018.

The paper, published in Health Affairs, finds that Medicare spending would be significantly reduced under an international reference pricing system, in which payments made by the U.S. government are informed by rates paid in other countries.

WHY THIS MATTERS

Currently, brand-name prescription drug prices are substantially higher in the United States than in other countries.

For this study, the authors compared...

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