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Insurers participating in Medicare Advantage will be able to negotiate directly with drugmakers in an effort to lower the cost of prescription medications under a new policy announced by the Trump administration.
The policy aims to allow Medicare Advantage plans access to the same tools as private insurers to try to lower the costs of treatments delivered in a physician’s office or hospital under Medicare Part B.
The change will impact more than 20 million people enrolled in Medicare Advantage plans. In 2017, Medicare Advantage plans spent $11.9 billion on Medicare Part B drugs, according to the Centers for Medicare and Medicaid Services (CMS).
Administration officials said the new policy will help increase competition and help lower the price of prescription drugs. It’s a key part of President Trump’s blueprint to lower drug costs, which he released in May.
“By allowing Medicare Advantage plans to negotiate for physician-administered drugs like private-sector insurers already do, we can drive down prices for some of the most expensive drugs seniors use,” Health and Human Services Secretary Alex Azar said in a Tuesday statement.
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