October 26, 2018

New Prescription Drug Proposal Uncertain to Bring Down Prices at Pharmacy

In a press conference with Health and Human Services Secretary Alex Azar Thursday, the President blamed international “free loading” for high prescription prices and announced a new plan to change the way Medicare pays for certain drugs. The proposal still needs to be refined and put through a federal rulemaking process.

The proposal has severe limitations, as it would only apply to drugs administered directly at doctors’ offices and outpatient hospital departments. The vast majority of prescriptions that patients purchase at pharmacies would be excluded from the pricing plans, and most patients won’t see reductions in their prescription costs.

The plan aims to keep costs similar to those in sixteen other countries, where prices are on average 44% lower, by slowly decreasing them to international levels over five years. It also calls for private sector vendors to negotiate with drug makers. Finally, the administration would change the practice that gives doctors a percentage of the drug fee, which can incentivize them to prescribe more expensive medications.

Experts expect that the new proposal will face intense opposition from the hospital and drug industries, both of which have powerful lobbying influence.

“As we’ve seen in the past, the administration’s plans to bring down skyrocketing prescription drug prices fall short,” said Alliance Executive Director Richard Fiesta. “This plan is too slow and too limited to make a real impact for seniors who are unable to pay for life-saving prescriptions now. We need bold action, such as allowing Medicare to negotiate prices without the restrictions that this plan includes, to address profiteering.”

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