Pelosi Aims For Feds To Negotiate Drug Prices, For Private Insurers

As House Democrats hash out a proposal empowering the federal government's top health official to barter lower drug prices, House Speaker Nancy Pelosi takes it one step further and pushing a plan that may benefit even those Americans with private health insurance.

A draft plan spearheaded, but not yet released, by Pelosi along with other House Democratic leaders would ensure that prices negotiated around the most expensive drugs would apply not just to the federal government but to all payers, including employers and insurers, a Democratic aide said.

But first, Democrats must agree on the best way to muscle drug companies to the negotiating table, in addition to preventing Americans from paying more or even losing access to the other drugs they take. Pelosi has faced pressure from progressive House Democrats, who've pushed for any more aggressive approach, including opening up all drugs to negotiations.

However bold an agenda Democrats produce, any proposal to ask the us government into price negotiations looks doomed in the Republican-controlled Senate, where GOP leaders have said they're not going to let it advance.

That means the fight over whether the government should cut handles drugmakers will probably play out around the members' 2021 election campaign trails, rather than within the halls of Congress. Democrats could again try to tar Republicans as indifferent to the struggles of Americans who can't afford health care, while promoting their own attempts to fulfill 2021 campaign promises to address skyrocketing drug prices.

Drug prices have been on the rise for decades and, according to the Kaiser Family Foundation, paying for prescription drugs – adjusted for inflation – increased to $1,025 per capita in 2021, from $90 in 1960. (Kaiser Health News is an editorially independent program from the foundation.)

Experts say the lack of levels of competition are much to blame for high drug costs. The government patent system, in which companies are granted exclusive control of their drug for a long time and can exploit loopholes to block competitors, frees those firms to charge as much as that they like. That may leave patients without any choice but to pay for exorbitant prices for that drugs they need.

Under the present system, negotiations are conducted on a plan-by-plan basis between drugmakers and pharmacy benefit managers, the intermediaries who themselves have faced questions regarding how much they contribute to high drug costs.

Many Democrats reason that the secretary of Health insurance and Human Services should negotiate prices, leveraging the strength of the government Centers for Medicare & Medicaid Services, the biggest healthcare payer in the country.

Though it might change before being released, the present Democratic leadership plan would authorize the HHS secretary to barter the costs of the 250 priciest drugs.

“We would like them to address as much as possible, as quickly as possible,” Pelosi said at a recent event after progressives pushed her to incorporate more than the 25 drugs she initially proposed targeting.

The negotiation would start with a price range set by HHS, the Democratic aide said, with the purpose of agreeing around the maximum price that may be charged for any drug.

The Government Accountability Office would help sort out disagreements between HHS and drugmakers, even though the specifics of that arrangement continue to be uncertain, the aide added.

Details of methods the negotiated drug prices would be used in the non-public sector continue to be seen.

Limiting negotiations towards the 250 most expensive drugs would tackle a piece of the drug market that makes up about about 78% of prescription medication spending, according to an analysis conducted by Patients for Affordable Drugs, an advocacy group.

Democratic leaders believe the 250-drug threshold would balance two competing interests, the aide said: maximizing the outcome on prescription medication spending, while theoretically keeping their email list of negotiable drugs to some number HHS could handle.

Otherwise, confronted with more drugs -or all of them – to negotiate, the HHS secretary could reasonably determine which was a lot more than the agency could manage and potentially cherry-pick which drugs to pursue, the argument goes.

An HHS spokesperson declined to reply to questions about how this type of proposal would look in practice.

The Congressional Budget Office cautioned in May that negotiations would probably be effective at lowering prices only when the HHS secretary were granted “some source of pressure” to use against drugmakers.

Under the Democratic leadership plan, companies that won't comply with negotiations would end up slapped by having an excise tax equivalent to 50% of sales around the drug in the previous year, the aide said.

But some Democrats worry that would not be enough to pressure drug companies to negotiate. A competing proposal, from Rep. Lloyd Doggett (D-Texas) and Sen. Sherrod Brown (D-Ohio) and endorsed through the Congressional Progressive Caucus, would threaten companies with having their drugs' patents expire sooner than planned if they didn't adhere to the secretary's negotiations on behalf of Medicare beneficiaries.

A second Democratic aide said that proposal, still considered a draft, would cut towards the heart from the problem by undermining the drugmakers' exclusivity, while protecting patients' access to prescriptions should pharmaceutical companies leave behind price talks.

“I'm for whichever plan offers the most relief for the most patients and does not allow Big Pharma to dodge responsibility for widespread price-gouging,” Doggett said in a statement.

Either plan would be better compared to current system, said Gerard Anderson, any adverse health policy professor at Johns Hopkins University in Baltimore that has been advising House Democrats on their proposals.

However, he explained, both proposals would require some kind of national formulary – a summary of prescription medications covered with insurance, as determined by the negotiations – to be effective.

“When you're negotiating having a company where there's three other competitors, you have to say 'I'm going to give you a unique contract' in order to get a good deal,” Anderson said within an interview.

The Veterans Health Administration, that provides retired service members discounts through its negotiations with drugmakers, is usually cited by negotiation advocates as a model that could be imitated. It regularly secures drug prices which are about 35% less than those paid by Medicare beneficiaries, Anderson said.

Unlike Medicare, the Veterans Health Administration includes a national formulary.

Although President Mr . trump said during his 2021 campaign he supports allowing the government to negotiate better drug prices, congressional Republicans broadly oppose the idea.

The HHS secretary is barred from directly negotiating prices with drugmakers for Medicare Part D, the program's prescription drug plan, which covered a lot more than 43 million Americans this past year. Instead, the private plans that offer Part D benefits negotiate by themselves.

Sen. Chuck Grassley (R-Iowa), chairman from the Finance Committee, said on the Senate floor last month that area of the benefit of Medicare Part D is that seniors can select a plan according to its formulary, allowing them accessibility drugs they need.

That choice could disappear if Democrats enable negotiations, he explained.

“As the senator who once again chairs the committee with jurisdiction over Medicare policy, I'm not going to let Congress unravel what's right about Medicare Part D,” Grassley said.

But the Democratic aide with knowledge of the leadership's proposal dismissed that concern, saying Medicare beneficiaries would keep your choice to select the plan that best suits them.

Anderson also said that concern doesn't hold up, explaining that there's “a huge amount of overlap” between your drugs on the Veterans Health Administration's formulary and people on most Medicare drug plan formularies.

It is unclear when House Democratic leaders might unveil their finished plan, though Pelosi is reportedly determined to do so prior to the 2021 election gets hotter.