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Democrats’ final pricing plan announced, 250 drugs targeted

Would allow US federal government to negotiate prices of key medicines


The final proposal of the Democrat’s long-awaited plan to control medicine pricing in the US has been unveiled by House Speaker Nancy Pelosi. 

Earlier this month, a leaked draft of the plan revealed a list of 250 drugs, including insulin, that would be subject to cost-cutting negotiations with Medicare. According to the document, the maximum negotiated price for the 250 high-cost drugs must be no more than 1.2 the average price levied in six index countries – this includes Australia, Canada, France, Germany, Japan and the UK.

This has remained in the final published plan, and means that the federal government would have the ability to negotiate and cap prices on the high-cost drugs. Pharma companies, under the proposed plan, would also have to offer agreed prices to private health insurance companies.

They would be subject to penalties if they failed to do so, with drug makers facing fines equal to 65% of the gross sales of a product in the prior year. This would increase by 10% each quarter, failing securing an agreement.

The ambition of the plan would be to empower the government to secure more significant reductions than is possible under current law. As it stands now, the Health and Human Services Secretary is unable to engage in negotiations for prescription drugs covered by Medicare.

Private plans that offer Medicare Part D benefits negotiate drug prices independently, but as this is done individually, they do not have much leverage to secure lower costs.

The proposed bill aligns with the rhetoric of President Donald Trump’s referencing pricing plan, but it is already being met with Republican resistance, on the grounds that the plan does not align with free-market principles

The Republican backlash included remarks from Senate Majority Leader Mitch McConnell who responded to the bill with criticism: “Socialist price controls will do a lot of left-wing damage to the healthcare system. And of course we’re not going to be calling up a bill like that.”

However, President Trump called for a bipartisan solution to costly drug pricing, tweeting on Thursday,“I like Sen. Grassley’s drug pricing bill very much, and it’s great to see Speaker Pelosi’s bill today”.

Trump tweet

Drug pricing in the US has been under scrutiny, with drugs prices, including insulin, increasing exponentially. This has lead to the formation of various patient movements and campaigners calling for increased regulation of prices. Trump’s ‘war on drugs’ was also a key element of his 2016 presidential campaign, and continues to be a focal point of his administration.

Article by
Lucy Parsons

20th September 2019

From: Healthcare



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