CMS Proposes International Pricing Index for Medicare Part B Drug Spending

Increasing competition among private-sector vendors and aligning Medicare payments for drugs with prices that are paid in foreign countries is the focus of a new model to improve Medicare beneficiary access and quality of care and reduce expenditures for specific physician-administered drugs.

The ‘International Pricing Index’ (IPI), announced last week by the U.S Department of Health and Human Services would be phased in over five years from Spring 2019, initially focusing on single source drugs and biologicals as these encompass a high percentage of Part B drug spending.

Under the proposed rule, existing payments for separately billable Part B drugs would move from the average sales price and 6 percent add-on to a ‘Target Payment’ derived from international price index.

CMS is seeking public comments on the potential parameters of the IPI Model. The advance notice of rulemaking (ANPRM) can be accessed from the CMS Newsroom here.

Boston Healthcare is actively monitoring this situation and its potential impact on physicians and pharmaceutical companies.

Comments are due to CMS on Monday, December 31, 2018.