HHS Advances Payment Model to Lower Drug Costs for Patients

The International Pricing Index (IPI) Model would lower costs for physician-administered drugs by resetting Medicare payments based on international prices and introducing competition

On Thursday, the U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS), announced and sought input on a new “International Pricing Index” (IPI) payment model to reduce what Americans pay for prescription drugs.

Under the IPI model, described in an Advance Notice of Proposed Rulemaking (ANPRM), Medicare’s payments for select physician-administered drugs would shift to a level more closely aligned with prices in other countries. Overall savings for American taxpayers and patients are projected to total $17.2 billion over five years.

“President Trump promised that he would bring down drug prices and put American patients first,” said HHS Secretary Alex Azar. “With this innovative approach, he is now proposing historic changes to how Medicare pays for some of the most expensive prescription drugs, securing for the American people a share of the price concessions that drug makers voluntarily give to other countries.”