As House Democrats hash out a proposal empowering the federal government’s top health official to negotiate lower drug prices, House Speaker Nancy Pelosi is taking it a step further and pushing a plan that could benefit even those Americans with private health insurance.
A draft plan spearheaded but not yet released by Pelosi and other House Democratic leaders would ensure that prices negotiated on the most expensive drugs would apply not only to the government but to all payers, including employers and insurers, a Democratic aide said.
But first, Democrats must agree on how best to muscle drug companies to the negotiating table, as well as how to prevent Americans from paying more or even losing access to the other drugs they take. Pelosi has faced pressure from progressive House Democrats, who have pushed for a more aggressive approach, including opening up all drugs to negotiations.
However bold a plan Democrats produce, any proposal to invite the federal government into price negotiations looks doomed in the Republican-controlled Senate, where GOP leaders have said they will not let it advance.
That means the fight over whether the government should cut deals with drugmakers is likely to play out on the members’ 2020 election campaign trails, rather than in the halls of Congress. Democrats could again try to tar Republicans as indifferent to the struggles of Americans who cannot afford healthcare while promoting their own attempts to fulfill 2018 campaign promises to address skyrocketing drug prices.
Drug prices have been on the rise for decades and, according to the Kaiser Family Foundation, spending on prescription drugs—adjusted for inflation—increased to $1,025 per capita in 2017 from $90 in 1960. (Kaiser Health News is an editorially independent program of the foundation.)
Experts say the lack of competition is much to blame for high drug costs. The federal patent system, in which companies are granted exclusive control of their drug for years and can exploit loopholes to block competitors, frees those firms to charge as much as they like. That can leave patients with no choice but to pay exorbitant prices for the drugs they need.
Under the current system, negotiations are conducted on a plan-by-plan basis between drugmakers and pharmacy benefit managers, the intermediaries who themselves have faced questions about how much they contribute to high drug costs.
Many Democrats argue that the secretary of Health and Human Services should negotiate prices, leveraging the power of the federal Centers for Medicare & Medicaid Services, the largest healthcare payer in the country.
Though it may change before being released, the current Democratic leadership plan would authorize the HHS secretary to negotiate the prices of the 250 most expensive drugs.
"We want them to address as many as possible, as quickly as possible," Pelosi said at a recent event after progressives pushed her to include more than the 25 drugs she initially proposed targeting.
The negotiation would begin with a price range set by HHS, the Democratic aide said, with the aim of agreeing on the maximum price that could be charged for a drug.
The Government Accountability Office would help sort out disagreements between HHS and drugmakers, although the specifics of that arrangement are still uncertain, the aide added.
Details of how the negotiated drug prices would be transferred to the private sector remain to be seen.
Limiting negotiations to the 250 most expensive drugs would tackle a piece of the drug market that accounts for about 78% of prescription drug 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 impact on prescription drug spending, while theoretically keeping the list of negotiable drugs to a number HHS could handle.
Otherwise, faced with more drugs—or all of them—to negotiate, the HHS secretary could reasonably determine that was more than the agency could manage and potentially cherry-pick which drugs to pursue, the argument goes.
An HHS spokesperson declined to answer questions about how such a proposal would look in practice.
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