The Trump administration is using competition to drive down drug prices for a portion of Medicare patients by giving insurers and pharmacy-benefit managers the ability to negotiate prices for more types of drugs.

The move focuses Plan B drugs, which are often administered at a hospital or in a doctor’s office, but applies to some outpatient drugs, as well. Plan B includes some cancer therapies, infusions for rheumatoid arthritis, injections for end-stage renal failure, and immunosuppressive drugs used after a transplant, among other things.

The policy change would put Medicare Advantage plans in line with private-sector insurance companies, which regularly negotiate discounts of 15 to 20 percent— and sometimes even higher—for the same drugs.

The policy change takes effect on Jan. 1, 2019.

Also starting next year, Medicare Advantage plans can require patients to try more cost-effective drugs before moving to higher-priced ones, in what is called “step therapy.”

For example, someone may be required to try a generic drug that costs less than a branded one. If, for some reason, the generic drug isn’t as effective as the branded one, the patient can switch back. However, this will only apply to people who are starting new medications in 2019, not to someone already on a medication. If the patient isn’t interested in a more cost-effective option, they can also apply for an exception.

Medicare patients also will be able to switch plans through March 31, either to another Medicare Advantage Plan or to a fee-for-service plan.

Last year, Medicare Advantage plans spent $11.9 billion on Medicare Part B drugs, according to HHS estimates. It’s not yet clear how much will be saved through this policy change, but whatever savings there are, more than half must be passed on to consumers.

Starting in 2020, the savings from these policy changes could lower premiums, but because premiums for Medicare Advantage plans have already been set for 2019, members are likely see to the savings in the form of a gift card or lower co-insurance.

The Pharmaceutical Care Management Association (PCMA), an association of pharmacy-benefit managers, called it “an important step” toward reducing costs for Medicare Advantage beneficiaries.

Matt Eyles, the CEO and president of America’s Health Insurance Plans, said he commended the Centers for Medicare and Medicaid Services (CMS) on their leadership “to strengthen the private sector’s ability to implement market-based solutions that can lower the cost of high-priced drugs for consumers.”

“We look forward to working with CMS and the administration on these changes,” he added.

He didn’t see how negotiating wouldn’t save Medicare and its patients money, he said.

“We definitely are able to do that as a large health care system. Kaiser Permanente has over 11 million members nationally and we are definitely able to go to pharma and try to negotiate a good price,” Awsare said.