As people review their benefit plans for next year, a 2017 study by the Commonwealth Fund found the U.S. pays more than patients an all other high-income countries for medications.
The U.S. Department of Health and Human Services has released a study of Medicare Part B type drugs that found the U.S. pays 80 percent more than other countries.
The Trump administration’s is proposing "International Pricing Index” to even the costs.
GDP Advisors President and co-founder Seth Denson said this is the first step for the U.S. to no longer pay the prices that pharmaceuticals are charging for certain drugs. Instead, we’ll pay what pharmaceutical companies charge foreign markets.
“Roughly 40 percent of all drugs purchased in the United States are purchased through the Medicare/Medicaid systems,” said Denson. “So, the government, Uncle Sam, has control as the largest single consumer of pharmaceuticals in the United States.”
He said in this proposal, are only those drugs impacted by the Medicare Part B system.
“And, remember most drugs that are utilized, are utilized through the Part D system,” said Denson. “The Part B system focuses only specifically on those drugs that are administered within doctor’s offices. So, these are high end cancer drugs, diabetes drugs, rheumatoid arthritis.”
Denson said this is the first step in the right direction that the Trump administration is taking in an effort to drive down costs and make the free-market capitalistic system that we have, more free-market capitalistic based.
But, we need to watch out for moving money from different areas.
“If we start to see the costs within the Medicare system go down we need to make sure that that cost then is not shifted to the private pay system and see those costs then go up,” said Denson.
He said HHS estimates this will impact costs to the federal government of $17 billion dollars over five years—more than $3 billion a year. Medicare costs $583 billion a year to the federal government, so this is one third of one percent.
Denson said the pharmaceutical and healthcare lobbyists will fight against this, and possibly those—including doctors—who benefit from the money brought in by Big Pharma.
When the Obama Administration tried this, there was so much opposition that they had to drop the proposal in December 2016.
Denson said the next step is then to apply this methodology throughout the healthcare system to make it more transparent and even across the board.