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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.

What did the executive order to repeal the ACA outline?

President Trump and his administration are actively engaged in negotiations about legislation meant to repeal and replace the Affordable Care Act (ACA). In late January, Trump signed an executive order that urges the current administration to fight the ACA.

In order to try and understand the executive order, here is a quick look at what the order contains:

• The new administration’s policy is to seek a prompt repeal of the ACA
• The order intends to efficiently maintain the ACA until repeal efforts are concluded
• The order minimizes regulatory and economic burdens to the states
• The order provides the states with greater flexibility to implement a free marketplace in the health care insurance industry

The full text of the order is far more revealing and it directs the Secretary of the Department of Health and Human Services (HHS) and other agencies with authority under the ACA to: “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [ACA] that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

It is clear that Trump intends to follow up on his campaign promise, and repeal and replace the ACA. In the months and years to come, a number of significant changes to the health care industry are expected. How this will impact on consumers is another question. Therefore, it is advisable that you check your existing health care insurance, understand fully what it covers and when any changes will be made to your coverage. Staying current on any healthcare news will allow you to transition into the future health care plan with ease.