Drug Price Negotiation Doesn’t Mean the Government Will Restrict Access to Medicines

(By Juliette Cubanski and Larry Levitt  for Kaiser Family Foundation published Oct 07, 2021)

As the Congressional debate over budget reconciliation legislation intensifies, stakeholders are keeping a close eye on a proposal to allow the federal government to negotiate drug prices in Medicare, which is currently prohibited under federal law. The so-called “non-interference clause” prohibits the federal government from “interfering” in negotiations between drug companies and the private plans that deliver Part D coverage, and also prohibits the government from requiring a particular formulary or price structure for drugs. The proposal under consideration amends the non-interference clause by adding an exception that would allow the government to negotiate prices with drug companies for a relatively small number of high-cost drugs, with an excise tax levied on drug companies that do not agree to participate in the negotiation process or comply with the negotiated price. This proposal would yield savings upwards of $450 billion, based on an earlier estimate from the Congressional Budget Office.  Continue reading the issue brief here…

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