The Richmond Observer – OPINION: With prescription drug prices, politicians are all talking, no action
On July 26, 2020, US President Donald Trump signed an executive order under which the US government’s Medicare Part D program would negotiate lower prescription drug prices based on an “international price index.”
Implementation of the order was delayed pending Big Pharma’s counter-proposals, but the Democratic response was swift. “Instead of significantly lowering drug prices, President Trump’s executive orders would hand billions of dollars to Big Pharma,” complained House Speaker Nancy Pelosi (D-CA), without explaining why or how.
On September 9, the US Department of Health and Human Services released the Biden administration’s “Comprehensive Plan to Tackle High Drug Prices”.
Here is the problem identified by the report: “Patients from other comparable countries regularly pay for prescription drugs significantly less than Americans.”
Here is the report’s solution: “Allowing the secretary of the HHS to negotiate Medicare prices will achieve fair prices for beneficiaries when the markets do not.” Allowing commercial payers, including employer and market plans, to access these prices will extend the savings to other consumers. “
Seems familiar? It should. This is essentially Trump’s plan.
It is also Pelosi’s plan, as expressed in the Elijah E. Cummings Lower Drug Costs Now Act, that would allow the HHS to negotiate drug prices and limit what it could offer to 120% of the price. average paid by other wealthy western countries.
Just to be clear, if the American political establishment were genuinely interested in lowering drug prices, they would eliminate Medicare prescription coverage (and if they were genuinely interested in cutting healthcare costs in general, it would eliminate Medicare).
None of these things being “on the table,” so to speak, asking Medicare to bargain harder when paying for prescription drugs makes sense – not because, as the HHS report claims, Medicare is distinct from the “market”, but because Medicare is a major player in the market.
Medicare Part D is not a monopsony (that is, a single buyer, just like a monopoly is a single seller), but it is the largest buyer of prescription drugs in the US healthcare market . He is in a good position to demand a quantity discount, or at least a reasonable price. And he should. Overpaying for prescription drugs is the healthcare version of paying $ 800 to “defense” contractors for toilet seats.
Why do Republicans and Democrats talk a lot about controlling Medicare spending on drugs, but never really get the job done?
It’s no mystery: Big Pharma is making bigger campaign donations and hiring more lobbyists than you.
Thomas L. Knapp (Twitter: @thomaslknapp) is Director and Senior News Analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in North Central Florida.