Keep the Feds Out of Drug Pricing
Allowing the federal government to negotiate drug prices, as suggested by Minnesota Sen. Amy Klobuchar’s column “Let’s work with Trump to reduce drug prices,” would result in prices going up and patient choice going down.
According to the Congressional Budget Office, allowing Uncle Sam to negotiate Medicare drug prices would have a “negligible effect” on Medicare drug spending. Its report from 2009, reiterated this view, explaining that such a reform would “have little, if any, effect on (drug) prices.”
Allowing the feds to negotiate prices for the Medicare Part D drug benefit would likely have a negative effect on the program. The CBO predicts that when Health and Human Services forces pharmaceutical firms to lower the cost of a particular drug, this tactic brings “the threat of not allowing that drug to be prescribed.” In other words, price controls equal choice controls.
When consumers say, “My drugs are too expensive,” what they mean is that their co-pays and co-insurance are too expensive. And they’re right. Major insurance companies and pharmacy benefit managers (PBM) receive significant discounts from the manufacturers. So why doesn’t this result in lower co-pays for consumers? That’s a good issue for Sen. Klobuchar to take up with President-elect Donald Trump.
Peter J. Pitts, Center for Medicine in the Public Interest; New York