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Democrats reveal pricing plan with 250-drug hit list

Listed drugs are costing Medicare the most each year

Senate

A leaked draft of the Democrat’s long-awaited plan on medicine pricing in the US includes a list of 250 drugs that would be first in line for cost-cutting negotiations with Medicare.

The draft of the Drug Price Negotiation Bill from House Speaker Nancy Pelosi – which is still being tweaked and is reportedly due for an official unveiling later this week – also draws on President Trump’s plan to peg the cost of drugs to lower prices overseas, a proposal which is being fiercely resisted by drug industry lobbyists.

According to the document, the maximum price negotiated for the 250 drugs must be no more than 1.2 times the average price levied in six index countries – Australia, Canada, France, Germany, Japan and the UK.

The 250 medicines in the firing line are those which are costing Medicare the most every year, for example because they do not have at least two “generic, biosimilar or interchangeable” competitors in the marketplace.

It would also impose hefty penalties – equal to 75% of gross sales of a product in the prior year – on pharma manufacturers who do not reach an agreement or choose not to enter into negotiations.

The list is viewed by some as an attempt to find a middle way between Trump’s across-the-board reference pricing plan, and established Republican resistance to allowing Medicare to negotiate on price on the grounds that it runs counter to free-market principles.

That resistance means the bill could find it hard to get through the Republican majority Senate, but does have in its favour Trump’s eagerness to get legislation through that will fulfil his promises on medicine pricing as he campaigns for re-election next year.

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House Speaker Nancy Pelosi takes aim at Trump

A summary document claims that in the first year alone “drugs representing almost half of all Medicare Part D spending…would be subject tot the negotiation process – including insulins”.

Insulin pricing has become a highly charged issue in the US amid reports of patients who are struggling to afford the injections rationing their doses, and putting themselves at risk of life-altering complications and even death.

Inflation rebate

Medicare Part D provides private health insurance to around 25 million people in the US. According to the draft, all the 8,000-plus drugs covered by that scheme as well as Medicare Part B – which covers drugs prescribed by a physician in a hospital or clinic – would be subject to a mandatory rebate if their prices increased above the rate of inflation since 2016.

That approach also echoes proposals by the Senate Finance Committee in July to limit price increases in Medicare to the rate of inflation, which has been backed by the Trump administration but is facing opposition from Republicans.

Industry body PhRMA said in a statement that the Democrat plan “would end the current market-based system that has made the US the global leader in developing innovative, life-saving treatments and cures”.

Article by
Phil Taylor

11th September 2019

From: Healthcare

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