CMS Lowers Cost of Prescription Drugs for Medicare Beneficiaries

Via CMS, WASHINGTON, D.C. (April 3, 2018)—Today, the Centers for Medicare & Medicaid Services (CMS) finalized polices for Medicare health and drug plans for 2019 that will save Medicare beneficiaries money on prescription drugs while offering additional plan choices. 

“The Trump Administration is taking steps for seniors with Medicare to save money on prescription drugs,” said CMS Administrator Seema Verma. “The steps we are taking will drive more competition among plans and pharmacies to meet the needs of seniors and lower costs.”

The final policies announced today further the Trump Administration’s commitment to lowering drug prices. CMS is finalizing a reduction in the maximum amount that low-income beneficiaries pay for certain innovative medicines known as “biosimilars.” Other actions that CMS is finalizing to lower the cost of prescription drugs include:

• Allowing for certain low-cost generic drugs to be substituted onto plan formularies at any point during the year, so beneficiaries immediately benefit and have lower cost sharing.
• Increasing competition among plans by removing the requirement that certain Part D plans have to “meaningfully differ” from each other, making more plan options available.
• Increasing competition among pharmacies by clarifying the “any willing provider” requirement, to increase the number of pharmacy options that beneficiaries have.

Today’s announcement builds on the work of the Trump Administration to lower out-of-pocket drug prices. In Medicare, a rule implemented for 2018 will help beneficiaries save on coinsurance on Part B drugs administered at hospitals that participate in the 340B program by reducing the amount Medicare pays for those drugs. The 340B program allows hospitals to buy drugs at a lower cost. Due to CMS’s policy change last year, Medicare beneficiaries are currently benefiting from the discounts that 340B hospitals receive. Beneficiaries are saving an estimated $320 million on out-of-pocket payments for these drugs in 2018 alone. CMS is also providing new information today to help hospitals implement this change, including how this change applies for Medicare Advantage plans that provide Medicare benefits through private insurance.

CMS is also finalizing policies that respond to the President’s call to end the scourge of the opioid epidemic. These policies provide Medicare with additional tools to combat opioid overprescribing and abuse, and to protect families and communities across the nation. For example, CMS is finalizing a new authority that permits Part D sponsors to require beneficiaries at risk of addiction or overuse to use only selected prescribers or pharmacies for opioid prescriptions.

As part of today’s announcement and guidance, the agency is reinterpreting the standards for health-related supplemental benefits in the Medicare Advantage program to include additional services that increase health and improve quality of life, including coverage of non-skilled in-home supports and other assistive devices. CMS is expanding the definition of “primarily health related.” Under the new definition, the agency will allow supplemental benefits if they compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization.

The final policies also advance the “Patients Over Paperwork” initiative—an effort aimed at removing regulatory obstacles and empowering patients to make informed healthcare decisions; developing innovative approaches to improving quality, accessibility and affordability; and improving beneficiaries’ customer experience. Specifically, the final policies will:

• Authorize CMS to permit plans to use notice of electronic posting (and provision of copies upon request) to satisfy disclosure requirements for certain bulky documents to Medicare beneficiaries.
• Improve transparency of the Star Ratings that give beneficiaries information about each Medicare Advantage and Part D plan’s quality rating. The changes put patients first by increasing the weight given to patient experience and access measures. 
• Streamline government review and approval of marketing materials Medicare health and drug plan use.

Find the 2019 Rate Announcement fact sheet here. View the text of the announcement here.

Visit cms.gov for more information.