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U.S. NEWS A7
Saturday 19 March 2016
American Health:
No clear path to government-lowered drug prices
MATTHEW PERRONE er drug prices. The White Senate Finance Committee Chairman Sen. Orrin Hatch, R-Utah, speaks with reporters outside the
AP Health Writer House declined to com- Senate chamber on Capitol Hill in Washington. Hatch recently questioned the Obama administra-
WASHINGTON (AP) — Most ment on the idea, but most tion’s top health official about rumors that the president might use an executive order to allow the
Americans support it. Vir- experts agree the president government to negotiate for lower drug prices.
tually all other developed has no authority to make
countries already do it. such a change on his own. (AP Photo/J. Scott Applewhite)
And the two leading presi- Larger changes would re-
dential candidates on both quire action by Congress, Those and other specialty support for the proposal. A more concrete proposal
sides of the aisle agree: the where pharmaceutical medications are projected Clinton’s plan for lower-
federal government should companies and relat- to increase spending by ing drug prices would involves extending price
lower drug prices. ed businesses spent more 6.5 annually percent in the have Medicare negotiate
But experts say the chanc- than $235 million on lobby- next decade. lower prices, particularly rebates in Medicaid — the
es for government action in ing last year — more than Experts disagree on how for “high-cost drugs with
the near-term are close to any other industry. much money could be limited competition.” But government health plan for
nil. The reasons are familiar: Still, a series of proposals saved by allowing Medi- it’s unclear what specific
political gridlock in Wash- to put downward pressure care to negotiate. When powers would be granted. the poor — to low-income
ington, pharmaceutical on drug prices has taken government actuaries last Trump has given even less
industry influence and the shape. Here’s a look at analyzed the proposal in information, saying that the seniors in Medicare.
structure of the U.S. health some of the leading ideas, 2007 they estimated sav- government could save
system itself, which limits their potential impact and ings would be “negligible.” $300 billion a year if it ne- Medicaid, which is a state-
government intervention. chances for success : That’s in part due to uncer- gotiated discounts. Fact-
“There’s not much they can tainty about what specific checkers have pointed out federal program, receives
do, that’s the sad truth,” MEDICARE PRICE NEGOTIA- powers the government that Medicare currently
says Ira Loss, of Washington TIONS would have in negotiations: only spends $78 billion an- legally-mandated dis-
Analysis. “They can’t do The leading proposal by far Could Medicare refuse nually on drugs.
much so they’re not gonna is to allow the government to pay for certain drugs? “I think part of the chal- counts from drugmakers
do much — but they’re go- to negotiate lower drug Could Medicare set up its lenge is putting some meat
ing to talk about it a lot.” prices for millions of seniors own formulary, like those on the bones,” says Tricia that are roughly 50 percent
Looking ahead, a Demo- in Medicare, the govern- used in the private sector? Neuman, of the nonparti-
cratic president with major- ment’s largest health plan. Depending on which pow- san Kaiser Health Founda- below the market price of
ities in the House and Sen- Both Donald Trump and Hill- ers are available, academ- tion. “I think the savings will
ate might be able to pass ary Clinton have adopted ics have estimated savings depend on the specifics of most drugs. That compares
major pricing reforms. But the idea, which is support- ranging from $15 billion per the policy.”
even if Democrats retake ed by 83 percent of Ameri- year to $54 billion per year. to discounts of about 30
the Senate this year, Loss cans, according to polling That uncertainty remains EXTENDING MEDICAID DIS-
and others don’t expect by Kaiser Health Founda- a big hurdle in marshalling COUNTS percent for privately-ne-
Democrats to regain the tion. But can it get through
House. Congress? And how much gotiated Medicare drug
For now, business in Con- money would it really save?
gress has essentially ground Current law bars Medicare plans.
to a halt, as both par- from negotiating drug pric-
ties look to the November es. Instead Medicare drug Extending the Medicaid
elections to expand their plans are managed by pri-
power. But with a majority vate insurers and pharma- discounts to 9 million low-
of Americans favoring gov- cy managers, who nego-
ernment action on drug tiate separately from one income Medicare enrollees
pricing, proposals continue another. For years, that ap-
to swirl around Washington. proach seemed effective: would reduce government
Sen. Orrin Hatch, R-Utah, Medicare drug costs rose
recently questioned the about 1.5 percent annu- drug spending by $103 bil-
Obama administration’s ally, on average, for most
top health official about of the last decade. But lion over 10 years, accord-
rumors that the president spending jumped about
might use an executive 13 percent in 2014 after ing to government actu-
order to allow the govern- the introduction of several
ment to negotiate for low- pricey Hepatitis C drugs. aries. Total U.S. retail drug
spending would fall about
5 percent, according to
Richard Evans, a health
care analyst for SSR.q
