The plan stops short of supporting the use of "march-in rights" that progressives argue empower the government to pull patent rights from a drug it considers to be too expensive. (Photo: Shutterstock)
The federal government would be able to directly negotiate the cost of pharmaceuticals under a plan announced last week by the Department of Health and Human Services. Under the proposal, the government would directly negotiate prices for drugs in Medicare parts B and D, with those prices also being available to private insurance plans and any employers who want to participate.
The plan, part of a $3.5 trillion reconciliation proposal, mirrors a range of legislative options that both House and Senate lawmakers have floated in recent years, "Politico" reported. These include capping out-of-pocket costs in Medicare Part D; limiting how quickly pharmaceutical companies can hike prices on existing drugs; and banning so-called pay-for-delay agreements aimed at blocking generic competition to brand-name drugs.
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House Democrats passed a similar provision as part of a major drug pricing bill in 2019, although it never was enacted into law. Some in the party's centrist wing have since vowed to oppose drug price negotiation. The plan stops short of supporting the use of "march-in rights" that progressives argue empower the government to pull patent rights from a drug it considers to be too expensive.
Sen. Elizabeth Warren has long advocated the approach and urged HHS to utilize it in an August letter with Sen. Amy Klobuchar and Rep. Lloyd Doggett. "The Biden administration has the opportunity to lower the prices of key drugs using these authorities," the lawmakers wrote to HHS Secretary Xavier Becerra. The department in its report acknowledged that it has been petitioned to use march-in rights, saying only that it would consider them.
The HHS plan also lays out a series of administration actions the department could take to fulfill what it identified as three guiding principles: Making drugs more affordable, improving competition within the industry and encouraging innovation. Those options include testing value-based payment models and boosting cost-sharing support to certain low-income Medicare beneficiaries. It also suggests that improved data collection from insurers and pharmacy benefit managers could give the government better insight into drug pricing, as well as rebates and out-of-pocket spending on prescription medications.
HHS developed the report in response to an executive order that President Joe Biden issued earlier this year aimed at improving competition across a range of industries, including the drug sector.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
