Retail drugstores
including CVS Corp. and pharmacy-benefit managers like Express
Scripts Inc. would submit bids to Medicare under a House panel
proposal to lower drug costs.
Medicare, the U.S. government’s health insurance program for
the elderly and disabled, would calculate an average price for
each drug based on all bids, and then reimburse physicians and
home health-care agencies at that average under the plan drafted
by the House Ways and Means Committee. Doctors would receive a fee
for administering drugs to patients.
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The Ways and Means plan is one of several Congress is
considering as it grapples with changing the way Medicare pays for
drugs. Investigators say the system now fosters fraud.
Physician management companies like U.S. Oncology Inc. and
home-health companies like Apria Healthcare Group Inc. may be hurt
by lower Medicare reimbursements for medicines.
Under a competing proposal by the House Energy and Commerce
Committee, Medicare would base payments on average prices the drug
companies get for their products from hospitals, clinics, doctors
and other buyers. The average would include rebates and other
discounts drugmakers give to purchasers.
The Senate Finance Committee, which oversees Medicare along
with the two House panels, is debating another plan that would
reduce Medicare drug reimbursements in order to cover the cost of
oral cancer drugs.
Medicare pays about $5 billion a year for drugs, basing
reimbursements on average wholesale prices calculated by
drugmakers. Federal and state investigators are examining whether
drugmakers artificially inflated those prices, then used the
reimbursements as a marketing tool to sell more products.
Bloomberg News
