Administration May Target Medicare Part B and D Plans to Lower Drug Costs

HHS Secretary Alex Azar offered more details to lawmakers last week of a plan that could expand Medicare’s ability to negotiate prices, implicitly responding to claims that the administration’s new drug pricing blueprint is too easy on drugmakers.

Azar said the administration believes it must engage the pharmaceutical industry through firmer negotiation of Medicare Part B drugs as well as Medicare Part D plans. He also criticized the discounts in place for protected Medicare Part D drugs, which average just 6 percent, and in some cases offer no discount at all.

Azar said the administration will bring negotiation to billions of dollars’ worth of Part B drugs — those administered in a physician’s office — where there is “currently no negotiation at all.”

Part B drugs are currently covered by the government and administered by healthcare providers, lacking the negotiation involved in Part D plans, where plans bargain for discounts.