Policy Proposals

On this page, you’ll find our analysis on key state and federal pharmaceutical policy proposals, with a focus on providing the expected economic impact from these proposals.

This week, the Trump administration axed a proposal that would have saved American patients billions of dollars by shedding light on the complex drug supply chain. If enacted, the rule would have required insurers to share discounts they negotiate with drug companies directly with patients. The proposed rule would have changed the terms of Medicare Part D, which provides prescription drug coverage to more than 40 million elderly and disabled Americans. Part D plans are administered by private insurers who receive government subsidies. These insurers...

President Trump promised to reduce Americans’ pharmacy bills — and he’s delivering. His administration will soon finalize a rule that restructures the drug supply chain and ensure that tens of billions of dollars of hidden rebates and discounts flow to patients. The rule affects Medicare Part D, the federal prescription drug benefit for 45 million seniors and people with disabilities. Part D isn’t like other entitlement programs. Numerous private insurers compete to sell prescription drug plans to Medicare beneficiaries. The government...

The Trump Administration is proposing a litany of contradictory healthcare reforms. Some reforms will empower patients, improve incentives, and strengthen the healthcare system. Others empower bureaucrats, worsen incentives, and will restrict patients’ access to needed healthcare treatments. A better outcome will only emerge if the Administration jettisons the ill-advised proposals and focuses policy on eliminating the disincentives that pervade the current healthcare system. Starting with the bad, the Trump Administration is threatening to impose government-mandated price controls on pharmaceuticals. Of course, this...

The Trump administration is planning to propose one of the biggest changes to Medicare in decades. The draft rule aims to reduce government spending by linking Medicare drug reimbursement rates to the rates in more than a dozen other Western countries that use price controls to hold down pharmaceutical spending. If implemented, the rule would effectively bring socialist drug price controls to the United States. Though the government would save some money in the short term, the change would threaten patients’ health and...

The U.S. economy thrives on innovation. According to the U.S. Patent and Trademark Office, industries that intensively rely on intellectual property (IP) protections, which includes the biopharmaceutical industry, account for nearly 40 percent of the U.S. economy and are responsible for an outsized share of our overall economic growth. Beyond the growth benefits, innovations improve our lives in countless ways. From mobile technologies inaptly called “mobile phones” to cutting-edge medicines that treat formerly incurable diseases, innovation helps us live better lives. Within this...

Measles is making a comeback. As of May 17, there were over 800 reported cases of the disease, according to the Centers for Disease Control and Prevention. That’s more than in any of the last four years. This uptick is dispiriting but shouldn’t be surprising. More and more people are deciding not to get their shots. In the past decade, the number of nonmedical vaccine exemptions for philosophical reasons has increased in 12 of the 18 states that allow them. A surge...

There is a legal adage that “hard cases make bad law.” California may soon rediscover this wisdom. Assembly member Jim Wood has introduced a bill (AB 824) with the intention of discouraging “pay-for-delay” tactics. “Pay-for-delay” practices refer to a situation when a manufacturer of a patented drug pays the manufacturer of a generic drug to delay launching its competitive product in order to extend its exclusivity period. Undoubtedly, these practices are anti-competitive and violate the spirit of the entire patent system. Such...

Senator Rick Scott (R-FL) has just doubled down on one of the Trump Administration’s unsound ideas. His proposal is disappointing for many reasons, particularly because Alex Azar, Secretary of Health and Human Services, has proposed an alternative reform that, if Congress implemented, would meaningfully improve the affordability of prescription drugs for patients. As part of the “Transparent Drug Pricing Act of 2019”, Senator Scott proposes to set the list price of all medicines to the lowest retail list price among five...

Too often, drug pricing analyses do not shed light on how much drug expenditures are actually increasing because these studies examine the wrong price. The latest iteration is an analysis by Rx Savings Solutions. According to the Wall Street Journal, Rx Savings Solutions documented that dozens of drug makers raised the list prices on hundreds of medicines for 2019. The average list price increase was 6.3%. Based on these findings, many people might reasonably conclude that patients will be paying more for...

Bringing a new drug to market now takes, on average, $2.6 billion and more than 10 years. Those numbers could shrink, and countless patients could benefit, if Food and Drug Administration regulators were less risk-averse. I know that from firsthand experience. Oct. 30 marks the 36th anniversary of the FDA's approval of human insulin synthesized in genetically engineered bacteria, the first product made with "gene splicing" techniques. As the head of the FDA's evaluation team, I had a front-row seat. Although...

Rarely is there bipartisan agreement that a tax cut won’t cost the federal government money. But, in the case of the medical device tax (a 2.3 percent tax on medical devices and products that was passed as part of the Affordable Care Act) this is true by definition because the tax is already suspended. The tax applies to medical devices such as pacemakers, advanced imaging technology (Cat Scan, MRI and ultrasound equipment), artificial joints, surgical gloves, and dental instruments. Devices that...

The controversial medical device tax hurts doctors, patients and manufacturers and should be repealed by Congress. The medical device tax imposes a 2.3 percent tax on such common items as pacemakers, CT scan machines, dental instruments, and artificial joints. It is currently suspended. Congress isn’t even collecting the revenue it anticipated, and it has also led to lower investment in research and development in new medical technology....

Although best-known for its peace-keeping in areas of conflict — where it enjoys a mixed record, at best — the U.N.'s agencies, programs, commissions and international agreements have a dismal record of accomplishment, especially while acting as the world's regulator-wannabe for all manner of products, processes and activities. The U.N. regularly panders to activists and, not coincidentally, adopts policies that expand its own scope and responsibilities. Science and free market principles routinely get short shrift. U.N. programs and projects inevitably become...

Last Friday, President Trump delivered a major speech from the White House Rose Garden on prescription drug prices. He announced several policies aimed at reducing the overall cost of pharmaceuticals and limiting patients’ out-of-pocket expenses. His reform agenda, entitled “American Patients First,” is largely excellent. It mostly harnesses the power of free-market competition, rather than government price controls, to drive down costs for patients while continuing to incentivize drug manufacturers to invest in innovative, lifesaving research. Contrary to popular belief, drug spending...

Health care is becoming less affordable every year. Over the past 10 years, national healthcare expenditures have grown 45 percent, but our economy has grown only 28 percent. This isn’t sustainable; and, solving this problem should be a top policy priority. However, “rounding up the usual suspects,” as Captain Renault might suggest, will not make U.S. health care system more affordable. One of the usual suspects is drug costs. Polling shows the American public blames pharmaceutical companies for high healthcare prices, perhaps...

Congress has undermined the Medicare drug benefit that millions of older Americans depend on – one of the few federal health care programs that's working well. The two-year federal budget deal passed recently shifts more of the program's costs onto drug manufacturers starting in 2020. In the process, the change eliminates one of the key features that has made the program – known as Part D – successful for over a decade. If the change stays in place, Part D could soon...

When it comes to the U.S. health insurance market, the adage about communist economics is apropos. In this instance, instead of being “they pretend to pay us, we pretend to work”, it is “they pretend to sell insurance, we pretend to buy it”. What we call health insurance in the U.S. is not insurance at all. In its simplest form, insurance is a financial transaction where an insurance company bears the financial risks associated with an unwanted event in return for...

Once again, budget negotiators in Washington D.C. are scrambling to put together a cogent spending plan for the federal government. And, once again, as part of this last-minute scramble, Congress is considering ad-hoc budget gimmicks to pay for spending instead of budgeting within the government’s affordability constraint. Or, as President Reagan might have said, “there they go again”. Employing budgetary gimmicks and pay-fors is one of the many reasons the federal government’s fiscal spending is out of control, and many problems...

President Trump's nomination of Alex Azar for secretary of Health and Human Services is encouraging news for free-market health reformers. Azar possesses precisely the combination of legal acumen, bureaucratic savvy, management experience dealing with a large workforce, and private-sector experience required to eliminate those parts of Obamacare that can be accomplished through administrative action. Azar's conservative legal credentials are impressive. He clerked for the late Supreme Court Justice Antonin Scalia. This alone suggests a healthy aversion to federal overreach — a welcome trait for a...