Allowing Medicare to directly negotiate drug prices will hurt seniors’ access to new drugs

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The Hill:

President Trump's recent attack on pharmaceutical companies as "getting away with murder" is the stuff of headlines. He also commented that the federal Medicare program could save billions of dollars if the program negotiated prices directly with pharmaceutical companies. But lawmakers and the public should understand what direct Medicare drug price negotiations might mean for seniors' access to needed treatments.

 

As of now, price negotiations for Medicare drugs are administered by Part D plan sponsors, who in turn negotiate directly with pharmaceutical companies. What could happen if Medicare takes over of this process?

 

 

We need not look any further than the Veterans Affairs (VA) healthcare system for a glimpse of that reality. The VA pharmacy benefits program already negotiates drug prices and pays less for drugs than many other providers. To contain costs, the program does not cover many of the newest, most effective treatments.

 

Many of these include newly approved drugs with no substitutes available. According to an August 2016 report by Xcenda consultants, only three of the 25 most innovative drugs were available in the VA drug formulary. Compare that to 11 Medicare Part D plans that covered all 25. The majority of Medicare plans covered 21 of the 25 drugs.