December 19, 2016
By Alex Keown, BioSpace.com Breaking News Staff
WASHINGTON – Big pharma got an early Christmas present after the Obama administration terminated a controversial plan to combat high drug prices last week.
The administration’s plan was intended to replace a current Medicare program that determines how a doctor receives pay. The plan was a pilot program that the Centers for Medicare and Medicaid Services (CMS) was hoping to implement to encourage physicians to prescribe “high-value” drugs, as opposed to the most expensive drugs on the market, according to a spring analysis by The Hill. CMS officials said the current pricing structure encourages doctors to prescribe the most expensive drugs on the market in order to cover their bottom line when it comes to reimbursements from the government.
The proposed plan would have reduced the current program that pays doctors the average price of a prescribed drug plus 6 percent, according to The Street. The new proposal would have reduced the 6 percent bonus to 2.5 percent. Additionally, the plan would pay a flat fee of $16.
It was a plan that brought companies like Pfizer , Regeneron , Eli Lilly , Johnson & Johnson and Bristol-Myers Squibb together with elected officials from the left and right.
It wasn’t just Big Pharma that opposed the legislation. It was panned by players from both sides of the political spectrum. Opponents said the new plan would have limited the access to drugs if “doctors’ acquisition costs rose above the Medicare reimbursement level.” The Street reported.
The Centers for Medicare and Medicaid Services announced the decision to spike the proposed plan on Friday. In its announcement, the CMS said it was working to address concerns over the high cost of drugs, but “the complexity of the issues and the limited time available led to the decision not to finalize the rule at this time.”
Nany Pelosi, minority leader in the U.S. House of Representatives, was one of the leading voices opposed to the administration’s plan. In a statement last week, she said she was pleased the CMS responded to the volume of criticism it received over the plan. Pelosi expressed hope that the costs of prescription drugs will be addressed by the incoming administration of Donald Trump. Elected on a wave of populism, Trump has called out high drug prices before and said that high prescription costs will be something he addresses. So far, Trump has not been vocal about capping prices, but has called for the federal government supported prescription programs to negotiate drug prices. He said such a maneuver could save up to $300 billion, annually.
