Dr Tricia Neuman on the Call to Let Medicare Negotiate Drug Prices

The idea to let Medicare negotiate drug prices has been kicked around for years, but a number of forces have prevented any legislation from being passed, explained Tricia Neuman, ScD, director of the Kaiser Family Foundation's Program on Medicare Policy and the Project on Medicare's Future.

Transcript (modified)

Presidential candidates Hillary Clinton, Senator Bernie Sanders (I-VT), and Donald Trump have all called for Medicare to be able to negotiate drug prices. What has prevented such a policy from being implemented?

This is an idea that has been kicked around for a long time. People in Washington and elsewhere have been talking about the government doing more to negotiate lower drug costs, specifically leveraging lower drug costs for people on Medicare. Honestly, people have been talking about it for at least a decade.

There are a lot of issues that are involved in this sort of broad idea, however. How would this happen? For example, would this be for all drugs that are covered by Medicare? would it be for a subset of drugs? And I think at this point it’s sort of a general feeling that something should be done about drug spending, but we won’t know the impact until these policies get better defined.

In the past, the Congressional Budget Offices looked at this idea of government negotiations and their view is that it might have a negligible effect on spending unless the proposal has real teeth. Which is to say, the government would set a formulary, the government would decide what the cost-sharing would be, and most importantly the government would be willing to walk away from the table if they couldn’t get a better drug price from the pharmaceutical companies.

So this is a big idea, and I think the question is: what are the specifics underneath this broad idea? Of course there are big political forces and major stakeholders engaged in this debate, which is why it hasn’t happened so far.