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CMS Provides New Flexibility in Prescription Drug Choices

Posted on Thursday, August 30, 2018 7:06 PM

This week, CMS issued a memo to Medicare Part D, which covers drug plans that customers pick up in a pharmacy, that offers new tools and flexibility to increase choices and lower cost.

“Currently, if a Part D plan includes a particular drug on its formulary, the plan must cover that drug for every FDA-approved indication, or patient condition, even if the plan would otherwise instead cover a different drug for a particular indication. The requirement to cover drugs in this manner can discourage Part D plans from including more drugs on their formularies and limit their power to negotiate discounts.

Today’s memo explains that starting in 2020, plans will have new flexibility to tailor their formularies so that different drugs can be included for different indications.  This policy, known as “indication-based formulary design,” is used in the private sector and will enable Part D plans to negotiate lower prices for patients.  Targeted formulary coverage based on indication will also provide Part D beneficiaries with more drug choices and will empower beneficiaries to select a plan that is designed to meet their unique health needs.”

Click here for the full press release.


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