Reducing prescription drug costs for seniors: The ABCs of ASP for Part D

December 17, 2020

As we move into 2021, it is time to take stock of the myriad proposals related to making prescription drugs more affordable for patients. Both political parties have ambitious agendas for reducing patient prescription drug costs including elimination of drug rebates in favor of direct-to-patient discounts, re-importation of brand-name prescription drugs, international price referencing, limitations on price increases, limits on patient out-of-pocket costs, and changes to intellectual property law.

We propose a simpler way for patients to realize savings on Medicare Part D drugs. In Pharmaceutical Executive, we outline the steps to a payment approach that sets patient cost sharing while taking manufacturer rebates into account and preserving the competitive negotiations between pharmacy benefit managers (PBMs) and biopharma companies. We also describe some of the benefits and issues in implementing such a system where coinsurance is based on the average sales price (ASP) net of rebates rather than the list price.

Related capabilities