New Political Landscape May Result in Medicare Negotiating Drug Prices

Given the uncertain political climate, any new proposed legislation may or may not come to pass. Just recently a bill was introduced that could let Medicare negotiate lower drug prices.

House Democratic members and one Republican indicate that if it can be passed, the bill would provide more power to the Health and Human Services (HHS) secretary to regulate Part D of Medicare. Part D covers drugs America’s seniors get. While some politicians seem to favor this kind of a move Big Pharma vigorously opposes it as do many Republicans. Right now, private insurers and pharmacy benefits managers do the drug price negotiating.

The rationale behind negotiating prescription drug prices for the over 43 million Medicare Part D beneficiaries is because it is one of the best methods to lower medication costs and open the door wider for seniors to get the medications they need at reasonable prices. The idea of letting another body negotiate drug prices is not new. There is a similar program run by the Department of Veterans’ Affairs. According to a House Committee on Oversight and Government Reform report if the government negotiated drug prices, it would potentially cut government spending by $156 billion over a ten-year period.

Another analysis of drug pricing in the U.S., compiled by Rx Savings Solutions, found that over 36 drug manufacturers raised drug prices on hundreds of medications by an average of 6.3 percent.

Trump tweeted his frustrations about drug hikes this weekend, saying that companies “were not living up to their commitments” on pricing. The comments followed an analysis by Rx Savings Solutions that found more than three dozen drugmakers raised the prices on hundreds of medicines in the U.S., for an average increase of 6.3 percent. The Pharmaceutical Research and Manufacturers of America (PhRMA), says the analysis “flawed and inaccurate.”

There are a number of other suggestions on the table on how to reduce the price of drugs, such as letting Medicare Part B negotiate prices, moving to approve a larger number of less expensive generic drugs and having drug companies post their drug prices in commercials aired on T.V.