The government could, and should, save billions on Medicare drug prices

Americans could save billions if federal lawmakers follow through with their promise to negotiate drug prices. Despite the bipartisan support for such a notion, there has been little effort to do so.

By

Opinion

October 14, 2021 - 9:52 AM

When the Biden administration proposed allowing the federal government to negotiate Medicare drug prices earlier this year, the nonpartisan Congressional Budget Office estimated the result would be drug price drops of between 57% and 75%. In 2019, when the Trump administration proposed doing the same thing, the nonpartisan Commonwealth Fund found that negotiating prices would cut premiums for Medicare drug plans by about $117 billion between 2020 and 2029.

So why are policymakers still fighting about this seemingly simple change? Money.

While most players in American health care are theoretically interested in controlling costs and improving care quality, absolutely no one is willing to cut his or her own salary to do it. At the moment, a great many people earn a salary based on the current method of paying (or overpaying) for drugs used by Medicare patients.

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