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WASHINGTON — The Biden administration signaled Monday that it will require health plans on federal exchanges to cover more of the costs of generic drugs, a small tweak that nevertheless has industry groups divided on how best to manage drug costs.

The proposal, laid out in a Monday regulation, would direct plans offered through the Affordable Care Act marketplace to put all generic drugs in their lowest cost-sharing tier, which typically translates to little to no out-of-pocket spending for patients. While that category is referred to as the generic drug tier, an increasing number of generics are not included in the preferred list and instead sent to higher, “non-preferred” coverage tiers.


Over the years, these tiers have become important ways to encourage generic drug use over more expensive branded medications. But while generic drug lobbyists say locking in the change will reduce patients’ costs and confusion, industry middlemen known as pharmacy benefit managers say limiting their options also limits their power to negotiate lower prices with drugmakers.

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