October 4, 2019 CHART REVIEW Andrew Strohman, Health Care Data Analyst

AAF’s Tara O’Neill Hayes recently published an Insight comparing three proposals to reform Medicare Part D and lower prescription drug costs. These proposals come from AAF, the Senate Finance Committee, and Speaker Pelosi. All three proposals aim to, among other things, increase the liability of drug manufacturers and insurance plans in the catastrophic phase. Current law requires drug manufacturers to pay 70 percent of costs in the coverage gap. In contrast, AAF’s proposal makes manufacturers liable for 9 percent of costs in the catastrophic phase; the Finance proposal puts their liability at 20 percent, likewise in the catastrophic phase; and Speaker Pelosi’s plan makes them liable for 10 percent in the initial coverage phase and then 30 percent in the catastrophic. Shifting manufacturer liability in this way ties the rebates more closely to the cost of the drug. The chart below is adapted from Table 3 in Hayes’ Insight and shows how much drug manufacturers would pay for a drug with a given price—in nominal terms and as a percentage of the drug’s price—under each plan compared to current law. While the underlying mechanisms for each plan vary, a consensus has emerged: Scrap the indirect rebate cap of $4,122 and replace it with an incremental rebate.

https://www.americanactionforum.org/weekly-checkup/the-presidents-plan-for-medicare/#ixzz63sts5M60
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