Medicare Drug Price Negotiation Plan Continues to Face Opposition

At least three House Democrats and one Senate Democrat oppose giving Medicare the ability to negotiate lower drug prices, putting the provision in danger of being removed from the Biden administration’s broader social spending bill.

The idea of allowing the government to negotiate the prices of medications was first proposed by Senator David Pryor (D-AR) in 1989. In the 1990s, government price negotiations were included in President Bill Clinton’s universal health care plan and were central to controlling the costs of Medicare prescription drug benefits that Democrats were pushing to add. In 2003, the Bush administration passed Medicare prescription drug benefits, but prohibited the government from negotiating the price of medications for seniors.

Legislation to repeal the ban on government drug price negotiations has passed the House numerous times, only to face opposition in the Senate. Proponents of the provision say  that the pharmaceutical industry and its lobbyists are blocking it, while opponents argue that allowing government drug price negotiations would stifle innovation and potentially restrict access to medicines. The trade group Pharmaceutical Research and Manufacturers of America warns that government negotiations would limit the availability of prescription drugs for Medicare beneficiaries because companies would withdraw their products from the program.

Representatives Scott Peters (D-CA) and Kurt Schrader (D-OR) are among those in the House who oppose the provision. Mr. Peters and Mr. Schrader have proposed an alternative plan that would limit Medicare’s negotiation powers to drugs used in outpatient settings once they’d outlived their patent exclusivity, require rebates for drug prices rising faster than inflation, and limit out-of-pocket medication expenses for seniors. Senators Charles E. Grassley (R-IA), Ron Wyden (D-OR), and Bob Menendez (D-NJ) have expressed support for new legislation that would require drugmakers to offer rebates to the government on medications whose prices rise faster than inflation.

Source: The New York Times, October 21, 2021.