At the president's urging, HHS is working on a more aggressive approach to tying payment for physician-administered drugs in Medicare to foreign drug prices, HHS Secretary Alex Azar said Wednesday.
The administration's International Pricing Index demonstration in its current form would tie payments for Medicare Part B drugs to an average of drug prices in other developed countries. President Donald Trump "did not find that satisfactory" and wanted the model changed so that the United States would get the lowest price of any country in the pool, Azar said.
"His view, which he has articulated publicly, is that America ought to be getting the best deal among developed countries. That is the terminology of most favored nation status, and that is the type of proposal we are working on," Azar said at an event hosted by Axios.
However, Azar did not indicate whether Trump intends to move forward with the demonstration through the Center for Medicare and Medicaid Innovation, and said he "cannot pre-judge the president's decisionmaking." A proposed rule advancing the policy has been under review by the Office of Management and Budget since June.
Investors are concerned that the administration may be considering expanding the demonstration to include drugs dispensed at the pharmacy counter, but Azar made clear the International Pricing Index applies to physician-administered drugs.
"The president and I are working of course on an importation regime, as well as on foreign reference pricing to bring more competitive market pricing into one of our programs in particular, Medicare Part B. Those are the physician-administered drugs," Azar said.
An HHS analysis found that Medicare pays an average of about 180% more for the highest-cost Part B drugs than other wealthy countries.
The CMS on Friday attributed a nearly 7% increase in monthly Medicare Part B premiums in 2020 to increased spending on prescription drugs. Part B covers doctors' appointments and outpatient hospital care, among other services.