Insights,
Government negotiation of prescription drug prices isn’t a panacea for lower costs
Government negotiation of prescription drug prices isn’t a panacea for lower costs
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Written by Marc Samuels and Lindsay Bealor Greenleaf
Tuesday, 13 June 2017
With Republican plans for health care reform stalled, and scrutiny surrounding prescription drug costs intensifying, a White House in desperate need of a policy victory may soon sharpen its focus on drug pricing. Since working with Congress on health care is proving to be difficult, President Trump may decide to do it via the executive branch.
One of Donald Trump’s many campaign promises was “to work on bringing down the cost of medicine by having a fair and competitive bidding process.” While the intent to make prescription drugs more affordable for the American people is a noble one, promoting a system of government-negotiated drug prices is misguided.
When it comes to drug pricing, the executive branch has incredibly broad administrative power. A little-known agency called the Center for Medicare and Medicaid Innovation, tasked with testing new delivery models designed to lower costs and improve quality of care, is exempt from statutory requirements and protections relating to the Medicare program. In effect, the president has an agency at his disposal that has the power to rewrite law.