The Obama administration said on Tuesday that it would test new ways to pay for prescription drugs in an effort to slow the growth of Medicare spending on medicines while encouraging doctors to choose the most effective treatments for their patients.

Pharmaceutical companies have opposed this idea.

Medicare payments to doctors and hospitals for Part B drugs are generally based on the average sale price of a drug and 6 percent. The Medicare Payment Advisory Commission, an independent panel that advises Congress, said this formula “may create incentives for use of higher-priced drugs,” because 6 percent of a higher-priced medicine generates more revenue and potentially more profit for health care providers.

Part B covers a wide range of drugs to treat various types of cancer, rheumatoid arthritis, macular degeneration and other conditions. Many are produced by genetic engineering or made from microorganisms or human or animal cells. Use of such “biologics” has grown rapidly in the last decade and now accounts for a majority of Part B drug spending.








http://www.nytimes.com/2016/03/09/us/politics/us-to-test-ways-to-cut-drug-prices-in-medicare.html?_r=0