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Pharmaceutical Price Reduction Approaches

October 28, 2020 | Comments Off on Pharmaceutical Price Reduction Approaches
Posted by Frank Ciesla

It has now become clear that there are two different approaches being proposed in the Presidential election.  President Trump has, through Executive Order, to a limited extent, enacted a Most Favored Nation application to pharmaceuticals.  That is a position that I have been advocating for a significant period of time.

Former Vice President Biden is proposing to negotiate rates.  Criteria for the rate negotiation process would have to be developed.  The criteria would need to be equally applicable to both well-established pharmaceutical companies, as well as start-ups, and will also need bureaucrats to negotiate the rates.  The first question is, who will set the criteria.  It should be set by Congress, but the question is, how long will that take.  Also the question is, will the negotiated rates be applicable only to governmental programs or, like the Most Favored Nation approach, be applied to all drugs sold in the United States whether to governmental programs or to, or through, other programs.  The negotiated approach may have a greater level of complexity involved.

I have been advocating for the Most Favored Nation clause long before the Trump presidency since I believe that is the least difficult and most effective approach to reduce pharmaceutical prices.




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