Answering Your Questions about the IPI Drug Pricing Model

By: Dan Best, Senior Advisor to the Secretary for Drug Pricing Reform

Summary: HHS answers questions about the International Price Index Model, a proposed way of paying for physician-administered drugs within Medicare.

Last week, as part of fulfilling President Trump’s promise to lower drug prices and cut down on foreign governments’ freeriding, HHS put forth a new way of paying for physician-administered drugs within Medicare, the International Price Index (IPI) Model.

The model aims to:

1. Reduce the price Medicare pays for a set of costly drugs to closer to what other countries pay.
2. Remove perverse incentives that encourage the prescribing of more expensive drugs.
3. Reduce physician burden associated with “buy and bill” by enabling private sector vendors to play a larger role in the purchase and distribution of these drugs.

To help people understand how the IPI model will accomplish these goals, we thought it would be useful to answer some questions that have been asked since the model’s release.