Trump administration aims to lower drug prices for seniors

Martin Shkreli sentenced to 7 years in prison for fraud
Martin Shkreli sentenced to 7 years in prison for fraud

The Trump administration announced several changes for Medicare plans aimed at increasing competition and reducing drug costs for senior citizens, starting in 2019.

The Centers for Medicare and Medicaid Services said Monday it will allow insurers to include certain low-cost generic drugs in their approved lists at any point in the year. Also, the agency hopes to broaden beneficiaries' choice of where they get their medications by clarifying that insurers must give all interested pharmacies an opportunity to participate in their networks.

CMS will also reduce the maximum amount that low-income beneficiaries have to pay for certain medicines, known as biosimilars.

To increase competition and choice, the agency said it will lift the regulation that limits the variety of Medicare Advantage plans an insurer can offer in a county.

There are more than 40 million seniors who have drug coverage either through stand-alone Part D insurance plans or through Medicare Advantage policies. However, it's unclear how much additional competition will reduce beneficiaries' costs, said Juliette Cubanski, associate director of the Kaiser Family Foundation's Program on Medicare Policy. Senior citizens typically have two dozen plans to choose from already.

Related: How Trump plans to cut prescription drug prices

CMS also announced yesterday that it will increase payments to insurers offering Medicare Advantage plans by an average of 3.4% next year and allow them to offer more supplemental benefits, such as handrails, shower chairs and other devices that assist the elderly. Previously, these supplemental benefits were limited to health-related items, such as gym memberships or eyeglasses.

Officials also announced Monday they are taking steps to let insurers restrict at-risk beneficiaries' access to frequently abused drugs. The agency is finalizing policies that would allow carriers to require at-risk beneficiaries to use specific doctors or pharmacies for opioid prescriptions. Also, it expects all insurers to limit initial opioid prescriptions to no more than seven days.

Related: Some Aetna customers will see lower drug prices

One policy that was not included in Monday's announcement was requiring pharmacy benefit managers to use the rebates they receive from drug manufactures to lower the price beneficiaries pay at the pharmacy. CMS Administrator Seema Verma said the agency was continuing to evaluate the issue.

Personal Finance


CNNMoney Sponsors