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High prices for drugs have increased talk about whether the government should be able to negotiate with drugmakers for Medicare Part D prices.(Photo: John Moore, Getty Images)
The federal government should negotiate drug prices for Medicare and force drugmakers to explain how they set drug prices,<span style="color: Red;">*</span>according to a survey out Tuesday<span style="color: Red;">*</span>of people 50 and older by<span style="color: Red;">*</span>AARP, the nation’s largest organization of people this age.
The survey<span style="color: Red;">*</span>showed more than 93% of adults 50 and older<span style="color: Red;">*</span>said they favored the Medicare price negotiations, a policy advocated by presidential candidates Hillary Clinton, Bernie Sanders and Donald Trump. President<span style="color: Red;">*</span>Obama included such price negotiation authority for drugs known as biologics and "high-cost drugs"<span style="color: Red;">*</span>in his recent budget proposals<span style="color: Red;">*</span>.
The<span style="color: Red;">*</span>percentage of respondents supporting government negotiations was up from 87% in 2007, which was the last time AARP asked the question. The group has not done a drug price survey since 2008.
"Medicare has a louder voice and would be a better negotiator," says Leigh Purvis, director of health services research in<span style="color: Red;">*</span>AARP's Public Policy Institute.
There was high support overall for more transparency on the part of pharmaceutical companies. Nearly all —<span style="color: Red;">*</span>98% —<span style="color: Red;">*</span>said they should be able to compare the price and effectiveness of prescription drugs, a concept that's been gaining traction. Insurance companies are increasingly using claims data to<span style="color: Red;">*</span>come up with "clinical pathways" they recommend to doctors for cancer treatment. The Memorial Sloan Kettering Cancer Center has a<span style="color: Red;">*</span>"drug abacus"<span style="color: Red;">*</span>to help weigh the effectiveness of drugs against the costs.
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AARP has long advocated that the Centers for Medicare and Medicaid Services negotiate directly with drugmakers, rather than leaving it to the pharmacy benefit managers (PBMs) that handle the Medicare Part D drug plans. That approach<span style="color: Red;">*</span>wouldn't likely bring prices down much unless there was one national formulary that everyone was on, experts say however.
Formularies are the lists of approved drugs an insurer will cover, sometimes under different levels of cost-sharing tiers to encourage use of particular medicines.
Former Congressional Budget Office director Peter Orszag responded to questions about federal drug price negotiation from Sen. Ron Wyden, D-Ore., in 2007 by saying there could be limited cost savings if prices for a few drugs or drug types <span style="color: Red;">*</span>were negotiated, but it would have little effect on Medicare costs overall. He noted, however, that if the Department of Health and Human Services Secretary had "authority to establish a formulary, set prices administratively, or take other regulatory actions" it could lead to "significant discounts."
Former House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., said negotiators would need to use a "value-based" approach to pricing to get more of a benefit.
"I think negotiation is imperative, but it's only a piece of the puzzle," he said. "You still have the question, 'What's a drug worth?' and 'Is<span style="color: Red;">*</span>it worth it for the health system?'"
Conservative health policy experts, drugmakers and pharmacy benefit managers say seniors will be most unhappy if they can’t get the drugs others can and are unable<span style="color: Red;">*</span>to choose among all the Part D plans available now.
"Many don't know that price controls require<span style="color: Red;">*</span>a one-size-fits-all, national drug list that's built and run by the government," says Mark Merritt, CEO of the Pharmacy Care Management Association, which represents PBMs. "That would completely disrupt Medicare Part D and restrict choices for seniors."
Health care economist John Goodman, CEO of the Goodman Institute, notes "Nothing is gained unless you are<span style="color: Red;">*</span>willing to take certain expensive drugs off the table —<span style="color: Red;">*</span>certain<span style="color: Red;">*</span>life saving drugs."
Health care expert John Goodman, CEO of the Goodman Institute for Public Policy Research is the author of the book "Priceless: Curing the Healthcare Crisis."<span style="color: Red;">*</span>(Photo: Brendan O'’Hara)
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"You can't win in an negotiation...if the other side knows there's no way you can live without a drug."<span style="color: Red;">*</span>says Goodman,<span style="color: Red;">*</span>author of Priceless: Curing America’s Healthcare Crisis.
The Department of Veterans Affairs hospitals use one national formulary and<span style="color: Red;">*</span>it's possible —<span style="color: Red;">*</span>but hardly<span style="color: Red;">*</span>easy —<span style="color: Red;">*</span>to get a drug that's not on the formulary, says Kavita Patel,<span style="color: Red;">*</span>a primary care physician at Johns Hopkins Medicine<span style="color: Red;">*</span>and senior fellow at the Brookings Institution.
When it comes to rising prices, Patel says<span style="color: Red;">*</span>the new PCSK9<span style="color: Red;">*</span>cholesterol drugs and possible new drugs that come along to fight Alzheimer's disease, dementia and obesity<span style="color: Red;">*</span>will have a bigger effect than<span style="color: Red;">*</span>the well-publicized, exorbitantly priced<span style="color: Red;">*</span>cancer and Hepatitis C drugs.
"That speaks to the<span style="color: Red;">*</span>need to make changes in Medicare<span style="color: Red;">*</span>for the long term," says Patel, a former policy director<span style="color: Red;">*</span>in the White House under Obama.<span style="color: Red;">*</span>"I want a Medicare program that my children can still have."
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