Industry News

On May 10, 2019, the Centers for Medicare & Medicaid Services (CMS) published a final regulation, Medicare and Medicaid Programs; Regulation to Require Drug Pricing Transparency. The rule is related to drug pricing transparency for prescription drugs and biological products. Over the past decade, these costs have increased significantly and are projected to continue to rise faster than overall health care spending. In 2015, U.S. prescription drug spending was estimated to be $457 billion (16.7% of overall personal health care services). Of that, $328 billion (71.9%) was for retail drugs and $128 billion (28.1%) was for non-retail drugs.

According to the final rule, it “revises the Federal Health Insurance Programs for the Aged and Disabled by amending regulations for the Medicare Parts A, B, C and D programs, as well as the Medicaid program, to require direct-to-consumer (DTC) television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost (WAC or list price) of that drug or biological product. This rule is intended to improve the efficient administration of the Medicare and Medicaid programs by ensuring that beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize their out-of-pocket (OOP) costs and expenditures borne by Medicare and Medicaid, both of which are significant problems.”

The final regulation is effective on July 9, 2019 and is available here.

The CMS Drug Pricing Transparency Fact Sheet is available here.