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Earlier this week, President Trump issued a new executive order on lowering drug prices. It directs the U.S. Health and Human Services Secretary to immediately take steps to conduct rulemaking on a model that would test limiting Medicare payments for Part B drugs to no more than a “most-favored-nation” price.
This is similar to the International Pricing Index model set forth by the Centers for Medicare & Medicaid Services in an advance notice of proposed rulemaking in October 2018.
The executive order also directs Health and Human Services to develop and implement rulemaking on a payment model that would limit payments to a most-favored-nation price for certain Part D drugs for which “insufficient competition” exists. This approach differs from the International Pricing Index model. Specifically, the most-favored-nation price is defined as the lowest price, adjusted for volume and gross domestic product differences, among all Organisation for Economic Cooperation and Development countries that have comparable per-capita gross domestic products.