ARTICLE | Politics & Policy

Trump Administration outlines plans for Medicare, Medicaid reforms

February 22, 2018 12:55 AM UTC

The Trump Administration outlined a plan to reform Medicaid and Medicare and reduce "free-riding" by foreign markets in the joint Economic Report of the President and Annual Report of the Council of Economic Advisers released on Wednesday.

The report said that Medicaid's practice of tying state coverage to the best price offered by drug manufacturers can lead to "artificially" high prices in the private sector. For example, a pharmaceutical company can inflate prices in the sector to collect higher post-rebate prices if a large share of the drug's market is enrolled in Medicaid. To address this, the Trump Administration proposed to allow up to five State Medicaid programs to use competitive drug formularies and negotiate with drug manufacturers. Additionally, it would allow patients to appeal for non-formulary drug access when medically necessary...