By MICHAEL STAPLES, Associated PressA new Medicare prescription-drug plan kicks off in 2018 that offers more options than the current system.
In a statement, the Medicare Payment Advisory Commission said it will require drugmakers to negotiate with the government and make more affordable drugs for consumers.
That will reduce drugmakers’ financial incentives to increase costs, and reduce the need for them to raise prices, the commission said.
Under the new plan, manufacturers will pay for prescriptions that they don’t charge for, but will also be able to negotiate discounts for those who have coverage.
Medicare will provide coverage to people earning more than 400% of the poverty level for an average annual cost of about $12,200 for a person who gets an annual prescription of $7,500 or more.
That would reduce the average cost of an average prescription by about $200.
The new plan is a big step for the Obama administration, which has been trying to improve access to prescription drugs for millions of Americans.
Last year, it started a pilot program to try to help Medicare cover drugs that are not covered by the government.
Under the plan, Medicare will pay the cost of any drug purchased from a private pharmacy for an additional 5% of its original price.
That money will then be paid out of the Medicare Trust Fund.
Under current law, drugmakers cannot negotiate prices with the Medicare program.
Under the new program, they would have to negotiate directly with the drugmakers and would also have to provide a list of discounts.
The commission said it expects to finalize the plan next year.
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