Trump raises spectre of drug pricing mandates for Medicare

 The Centers for Medicare & Medicaid Services (CMS) has proposed two more programmes in the Trump administration's efforts to reduce medicine prices, which have not been well received by the pharma industry.

The two payment models – dubbed GLOBE and GUARD – respectively apply to medicines covered under Medicare Part D, an outpatient prescription drug benefit provided to more than 50 million older adults in the US, and Medicare Part B, which covers outpatient services like injectables administered in physician offices.

"On May 12, President Trump ordered an all-of-government response to the unfair gap between US drug prices and what other nations pay," said HHS Secretary Robert F Kennedy Jr as the two models were announced. "CMS is answering that call."

Both models would use Trump's most favoured nation (MFN) approach to pricing, benchmarking US Medicare payments to the prices paid in economically comparable countries.

If enacted, they will impose additional, mandatory rebates on drugmakers alongside the system of Medicare drug price negotiations for drugs with high Medicare Part B and D spending that was introduced under the Biden administration.

According to CMS, the two pilots will test new rebate formulas for Part D and B drugs that will include an MFN adjustment, saying that will "reduce programme expenditures for Medicare…while preserving or enhancing beneficiaries' quality of care."

They follow the introduction earlier this year of the GENEROUS model, a voluntary MFN framework for medicine manufacturers that participate in the Medicaid Drug Rebate Programme (MDRP). They will arrive alongside the launch of the TrumpRx direct-to-consumer (DTC) drug purchasing channel, to which more than a dozen of the biggest pharma groups have now agreed to provide discounted medicines.

According to the proposals, GUARD would come into effect on 1st January 2027, and run for five years with rebate invoicing and payment continuing until 2033. GLOBE, meanwhile, would start on 1st October 2026 and run through 30th September 2031, but would exclude biosimilars and drugs already subject to the Medicare negotiation process.

CMS predicts that the GLOBE will cut Medicare spending by $11.9 billion while GUARD will reduce it by $14.1 billion over their respective periods.

In a statement, the pharma industry organisation PhRMA said: "Government policies that mandate broad-based foreign price controls are bad for American patients and undermine US leadership. By CMS' own admission, the proposed policies are projected to increase costs for America's seniors, and they will siphon billions from US medicine R&D at a time when China is on the verge of surpassing us."

https://pharmaphorum.com/news/trump-raises-spectre-drug-pricing-mandates-medicare