Will the government take action on drug pricing?
While there are rumors that President Obama could use his executive authority to regulate drug pricing, analysts say that is not likely. Experts also say that the presidential candidates’ plans to reform skyrocketing drug prices won’t work.
However, what is clear is that the soaring price of drugs has gotten the attention of both legislators and presidential candidates. In early February, Congressional hearings addressed the problem and highlighted some of the most egregious pricing cases, such as Turing Pharmaceuticals’ 5,000% overnight price increase on its Daraprim (pyrimethamine) for toxoplasmosis infections.
Still, presidential action on the issue is unlikely, according to a “flash note” from Evercore ISI analyst Terry Haines. President Obama does not have the authority to undertake such sweeping actions without Congressional approval, the note said. With Republicans currently in control of Congress, “the likelihood of drug pricing regulation is very small,” the report said.
Presidential candidates’ drug pricing reform ideas also will likely not work, according to experts. For example, a popular plan that is advocated by Hillary Clinton, Bernie Sanders and Donald Trump is to let the federal Medicare program negotiate prices for all. However that approach was banned when Congress added the Part D drug benefit to Medicare in 2003, Kaiser Health News reported.
The Congressional Budget Office has said that lifting the ban on pricing negotiation would have a negligible effect on cost because the federal government is unlikely to obtain significantly lower prices than private drug benefit providers. “Even the Obama administration, which proposed allowing Medicare to negotiate for very high-cost drugs as part of its fiscal 2017 budget, estimates no savings from the provision,” Kaiser Health News reported.
Clinton is also proposing a cap on the amount patients have to pay out-of-pocket for their drugs. However, Alissa Fox with the Blue Cross and Blue Shield Association said this plan doesn’t lower drug prices; it just shifts costs. “You’re really just requiring everyone else (in the insurance pool) to pay those costs,” which would boost premiums, Fox told Kaiser Health News.
Sanders’ solution, meanwhile, is to allow Americans to buy more drugs from Canada and other countries. However, that is another proposal that is unlikely to come to fruition, because FDA officials in every presidential administration have warned that the safety of drugs from other countries cannot be guaranteed.