By Juliette Cubanski Follow @jcubanski on Twitter ,
Tricia Neuman Follow @tricia_neuman on Twitter ,
Sarah True, and Meredith Freed
Published: Oct 17, 2019

Prescription drug costs are a major concern for consumers and a fiscal challenge for public and private payers. In response, lawmakers are considering a broad range of policy options, including allowing the federal government to negotiate the price of prescription drugs on behalf of people enrolled in Medicare Part D drug plans, a proposal which has strong and bipartisan public support (Figure 1).

Members of the 116^th Congress have introduced bills to change the law and allow government drug price negotiation. This proposal is a key feature of the drug price legislation recently announced by Speaker Nancy Pelosi (D-CA) (H.R. 3, the Lower Drug Costs Now Act of 2019), which would require the Secretary of the Department of Health and Human Services (HHS) to negotiate the price of at least 25 (and no more than 250) brand-name drugs without generic competitors, and would make the negotiated price available to both Medicare and private payers. Several Democratic candidates in the 2020 presidential campaign have also stated their support for authorizing federal negotiation of drug prices for Medicare Part D.¹

This issue brief begins with a brief description of the statutory prohibition on government drug price negotiations and its history and then describes several legislative proposals introduced in the current Congressional session that would give the HHS Secretary authority to negotiate Medicare drug prices. The brief also reviews analysis from the Congressional Budget Office (CBO) of the potential savings that government negotiations may generate for the Medicare program and its beneficiaries.

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Editor’s Note: Isn’t it unfortunate that the less informed were able to get the government to develop a universal health care program for those over 65 in 1965? Although promoted on the basis that people couldn’t afford healthcare, it has now become totally unaffordable since government has taken over. But like all entitlements, reform is too risky to pursue.

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