How the Trump Administration Wants to Change Medicare Drug Rules

Trump, Medicare, drug rule changes. medicare part D

This article was updated November 7, 2019. 


In 2018, the Trump administration proposed changes to Medicare’s prescription drug benefit. If passed, the changes could go into effect as soon as January 2020.

The aim is to expand choices and lower drug prices by increasing competition, but some of the changes may not be helpful to patients. For example, copays could go down, but premiums are expected to go up.  

Here are three major proposed changes, many based on Trump’s previous “Blueprint” for drug pricing.

1. Revoking coverage of protected class drugs

Should the proposal pass, insurers would be able to exclude certain drugs from the “protected classes” of drugs, which currently must be covered by law. 

The protected class drugs and some of the ailments they treat include:

  • Antidepressants (depression, anxiety, ADHD)
  • Antipsychotics (schizophrenia, bipolar disorder, dementia and Alzheimer’s)
  • Anticonvulsants (epilepsy, migraines, bipolar disorder)
  • Antineoplastics (cancer)
  • Antiretrovirals (HIV)
  • Immunosuppressants (lupus, rheumatoid arthritis, multiple sclerosis) 

Plans can exclude coverage under the condition that two other similar drugs in the same category are covered, and as long as the drug meets criteria such as having a very high price. Though the goal is to drive prices down, this change could cause major backlash from some patients whose medications are no longer covered.

2. Provide immediate out-of-pocket estimates

Doctors and patients will be able to get a more accurate estimate of out-of-pocket costs through new e-prescribing requirements. They will be able to know the drug’s cost at the moment the prescription is written.

3. Create mandatory step therapy

Medicare Advantage plans can require step therapy for drugs administered in a doctor’s office. Step therapy means that a patient has to try a lower-cost version of the drug prescribed before trying the drug. The health of cancer patients is typically precarious, and this protocol could create dangerous medical conditions. However, since medications given in a doctor’s office are typically cancer drugs, there will be safeguards in place. 

Other proposed changes to reduce costs 

Another rule the Trump administration proposed was to do away with pharmacy benefit manager (PBM) rebates, also known as kickbacks. 

Pharmacy benefit managers (PBMs) act as middlemen between drugmakers and insurers. When PBMs negotiate the price of an expensive, brand-name prescription drug and guarantee it will be covered by a drug plan, the PBM then receives large amounts of money from the drugmaker in the form of rebates, or kickbacks. The administration proposed doing away with these kickbacks and passing the savings onto consumers at the pharmacy counter. However, last July, the administration took the proposal off the table without explanation, leaving PBMs to continue to pocket large amounts of undisclosed money. 

Are the proposed changes good for patients?

Andy Slavitt, who was the CMS administrator under President Obama, told The Washington Post: “If [the proposal] reduces the cost of drugs, that’s good. But if it reduces the availability of drugs or stops covering important drugs, then this is government savings at the expense of patients.”

These are only proposals, which means they may not become laws. However, with Trump under an impeachment inquiry, he may try to pass more legislation before it’s too late. 

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