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Medicare Prescription Drug Costs

By August 30, 2022September 8th, 2022Insurance
White Prescription Pills Spilling From Orange Pill Bottle
Prescription Drug Costs

According to SHRM, the IRS seeks to reduce the cost of prescription drugs under Medicare Part D by allowing the Centers for Medicare & Medicaid Services to negotiate lower costs with pharmaceutical companies. It also caps insulin costs under Medicare Part B, among other provisions.

“Because all the bill’s drug pricing reforms apply only to Medicare, however, the legislation is raising worries that it could … result in significant cost-shifting to commercial market plans, meaning higher drug prices and costs for the millions of Americans and their families who get their health coverage through employer-sponsored plans,” wrote Geoff Manville and Dorian Z. Smith, partners in HR consultancy at Mercer’s law and policy group.

Others also expressed concerns that lower payments for drugs purchased through Medicare could result in higher costs for non-Medicare plans. “We are alarmed that employer plan cross-subsidization will be expected once again to shoulder additional costs and make up for any perceived shortfall in prescription revenues by drug manufacturers,” the Washington, D.C.-based Business Group on Health, which represents large employers, said in a statement.

The group added that “transparency, market-based reforms, and other policy approaches would best serve all stakeholders. We, therefore, encourage employer plan sponsors to work with their service providers early to ensure fair treatment in light of the government’s action and potential cost-shifting.”

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