Despite President Trump's pledge to rein in prescription drug pricing, the Administration did not take substantial action to address this issue in 2017. With the expected confirmation of Alex Azar – who is a former Eli Lilly executive – as the new Secretary of HHS, the Administration may initiate action. Azar has identified tackling high and rising drug costs as a top priority, stating that he would focus on competition, including a "robust generic market" and more competition for branded medicines and biosimilars. Azar has also targeted the "gaming of exclusivity and patents by branded drug companies."
Given Azar's background, we expect that CMS may provide guidance on value-based prescription drug purchasing and other innovative pricing ideas in 2018. CMS and CMMI may also promote new models of pricing and reimbursement for Part B drugs and Azar has indicated interest in expanding Medicare Part D/pharmacy benefit manager negotiation approaches into Part B.