Trump administration looks to give private Medicare plans negotiating power on drugs

Insurers that participate in Medicare’s prescription drug program would be able to exclude certain drugs if prices rise faster than inflation as part of a new proposal from the Trump administration.

The proposal, announced Monday, is aimed at lowering prescription drug costs for seniors by giving Medicare plans leverage in price negotiations.

Currently, private Medicare health plans are required to cover all or “substantially all” drug in six “protected” classes, such as HIV treatments, antidepressants and cancer drugs, regardless of cost.

This gives pharmaceutical companies little incentive to make the drugs affordable, administration officials said.