Price and Costs

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On this page, you’ll find the Center’s research on the complex world of pharmaceutical pricing. Our focus will be breaking down current pharmaceutical pricing structures and processes and potential reforms to improve efficiency and innovation; evaluating the impact of regulatory-created inefficiencies such as Pharmacy Benefit Managers (PBMs) and the 340B program; and analyzing how policy proposals such as price controls and drug importation would undermine competition.

September 21, 2023 Issues, Price and Costs

Members of Congress on both sides of the aisle are examining how industry middlemen known as Pharmacy Benefit Managers (PBMs) are driving up healthcare costs. Rightly so. PBMs have been manipulating the complex and opaque drug pricing system at the expense of patients for far too long and Congress must act. Read the full article by Sally Pipes and Wayne Winegarden at RealClearHealth...

August 29, 2023 Innovation, Price and Costs

President Joe Biden celebrated a milestone today—but American patients have no reason to cheer. The White House announced the first 10 prescription drugs that, starting in 2026, will be subject to price controls authorized by the Inflation Reduction Act. Democrats laud these price controls, which they glibly dub "negotiations," as a way to lower drug costs for seniors on Medicare. But in the not-too-distant future, people of all ages may look back and rue this day—as the beginning of the end of...

August 25, 2023 Issues, Price and Costs

The Biden administration claims to support price transparency in healthcare. The Centers for Medicare and Medicaid Services has formally warned hundreds of hospitals to comply with federal rules requiring them to post their prices publicly. And the agency just rolled out a new rule designed to “advance prescription drug transparency in Medicaid.” But that drug pricing rule has little to do with transparency. It’s an opaque bid by the White House to impose price controls on drug makers. If implemented, it...

August 21, 2023 Issues, Price and Costs

Who says bipartisanship is dead? In the House and Senate, members of both parties are advancing legislation to check the power of pharmacy benefit managers (PBMs), the self-dealing middlemen in the drug supply chain that inflate Americans' spending on prescriptions by billions of dollars a year. By shining a light on PBMs' questionable business practices, and potentially cracking down on some of their anticompetitive behavior, lawmakers can help patients fill their prescriptions without breaking the bank....

July 25, 2023 Issues, Price and Costs

The last few months have seen a flurry of activity on Capitol Hill regarding prescription drug reform, with a particular focus on pharmacy benefit managers, or PBMs. The U.S. Senate Finance Committee is set to markup a bipartisan PBM reform bill within the next few days. The House Energy and Commerce Committee and the House Committee on Education and the Workforce are weighing PBM reform legislation of their own. All these efforts have an eye on reducing drug costs for patients. Click to read the full article in...

July 17, 2023 Issues, Price and Costs

The Senate Health, Education, Labor, and Pensions (HELP) Committee is currently reauthorizing the Pandemic and All-Hazards Preparedness Act (PAHPA), which is supposed to help us prepare for the next public health emergency. Never missing an opportunity to impose price controls on anything and everything, Senator Bernie Sanders (I-VT) wants to use this legislation to benchmark the price of innovative medicines that received some federal support at the basic research stage to the prices in the other G-7 nations. Since these nations...

June 28, 2023 Issues, Price and Costs

It’s been less than a year since Democrats enacted the Inflation Reduction Act, which gives Medicare the power to set the prices of certain medicines. Those price controls have yet to go into effect. But Democrats already want more. They’ve introduced new legislation that would amp up those price controls — and even permit the government to refuse to cover drugs in order to drive a harder bargain with pharmaceutical companies. As for the patients who would benefit from those drugs —...

June 26, 2023 Issues, Price and Costs

Hundreds of lifesaving therapies will never be invented, and as many as 1.1 million jobs will be lost if Senate Democrats successfully expand their prescription drug price-fixing program, according to a major new study. The study, conducted by the research group Vital Transformation, modeled the effects of the SMART Prices Act. Sponsored by 28 Democratic senators including Amy Klobuchar, D-Minn., Peter Welch, D-Vt., and Elizabeth Warren, D-Mass., the bill would expand the price-control scheme approved last year for certain drugs under Medicare as part...

June 19, 2023 Issues, Price and Costs

Pharmaceutical giant Merck announced last week that it is taking the federal government to court over the Inflation Reduction Act's drug pricing reforms. The lawsuit alleges that the law's Medicare price negotiation program violates some of the most fundamental rights guaranteed by the U.S. Constitution. "This is not 'negotiation,'" the company says in its official complaint. "It is tantamount to extortion." Such strong language is justified. The IRA's price controls represent an unprecedented act of government intervention into the prescription drug market — one that...

May 10, 2023 Issues, Price and Costs

Today , Sen. Bernie Sanders, I-Vt., will haul executives from three insulin manufacturers and three pharmacy benefit managers before the Senate Health, Education, Labor and Pensions Committee for a hearing on "the need to make insulin affordable for all Americans." Sen. Sanders is sure to call the pharmaceutical executives — who represent Eli Lilly and Company, Novo Nordisk, and Sanofi — greedy, as he has repeatedly during his tenure atop the HELP Committee. This time, though, PBMs will get some heat, too. Good....

May 8, 2023 Issues, Price and Costs

The Biden administration is in the midst of setting the terms for its program of price controls on prescription drugs dispensed through Medicare. The first 10 medicines subject to the price caps will be selected by the end of this year. That prospect is already chilling investment in drug research, particularly in small-molecule drugs. This category of medicines, which are generally chemically synthesized, includes everything from aspirin to certain cancer drugs. The implications of this slowdown in research and development could be...

May 5, 2023 Issues, Price and Costs

The Biden administration is cracking down on hospitals that keep their prices secret. Under a policy announced last week, failing to abide by Trump-era hospital price transparency rules will no longer prompt a warning letter from the Centers for Medicare and Medicaid Services. Instead, hospitals will have 45 days to submit a Corrective Action Plan for meeting these requirements — or face a fine. It seems that not even Democrats can quarrel with former President Trump's price-transparency reforms — nor should they. For healthcare...

April 3, 2023 Issues, Price and Costs

Pharmacy benefit managers are in the congressional hot seat. Last Thursday, the Senate Finance Committee held a hearing examining the middlemen's impact on patients. Earlier in March, the House Committee on Oversight and Accountability launched an investigation into PBM tactics that are "harming patient care and increasing costs for consumers." The focus on pharmacy benefit managers is warranted. They game the healthcare system to line their own pockets at the expense of patients. PBMs manage prescription drug benefits on behalf of insurers....

March 23, 2023 Issues, Price and Costs

Despite the rancor, there are many bipartisan opportunities for the divided 118th Congress. Near the top of the to-do list should be reforming the well-intentioned, but poorly designed, 340B drug discount program. 340B enables qualifying institutions to purchase medicines from manufacturers at steep discounts, generally between 25% and 50% off list price, but sometimes even larger. These discounts are supposed to improve the capacity of the clinics and hospitals serving a disproportionate share of low-income and uninsured patients. More and more, this...

March 19, 2023 Issues, Price and Costs

Imagine receiving a bill for $10,000. It’s from your local hospital, where you had a minor procedure. But you have no idea why it’s so high, or how you’re going to pay. If you’ve ever had an experience like this, you’re not alone. In 2020, a California couple was billed $80,000 for their twins’ stay in intensive care. In 2022, a South Carolina hospital charged a woman more than $5,000 for a breast biopsy, after refusing to give her a price...

March 15, 2023 Issues, Price and Costs

It's been more than two years since a rule promulgated during the Trump administration requiring hospitals to disclose their prices took effect. Yet according to a new study, most hospitals aren't complying. The analysis, published in January in the Journal of General Internal Medicine, found that just 19% of hospitals examined fully comply with the rule. Hospitals in Tennessee haven't performed any better. A month after the new rule took effect in January 2021, a Vanderbilt University review of the 88 short-term acute care...

March 14, 2023 Issues, Price and Costs

The Inflation Reduction Act’s (IRA) drug pricing provisions will severely curtail life-science research. The IRA vests the Centers for Medicare & Medicaid Services with the power to impose price controls on an ever-expanding list of drugs. The direct result will be that seniors today — as well as future generations of patients — will lose out on access to life-saving cures because those treatments will never be developed. Until the political balance in Washington changes and this deadly folly can be repealed,...

February 18, 2023 Issues, Price and Costs

President Biden hit the road last week to castigate Republicans for supposedly proposing to make healthcare more expensive. The president is upset that Republicans want to undo the innovation-destroying price controls on prescription drugs included in Democrats’ Inflation Reduction Act and rein in the billions of dollars in subsidies he’s handing out to prop up Obamacare’s exchanges. He’s conveniently ignoring some of Republicans’ own ideas for making health insurance more affordable. In a recent opinion piece, Rep. Michael Burgess, R-Texas — a member of the...

February 8, 2023 Issues, Price and Costs

Last night's State of the Union address was a festival of cognitive dissonance. President Biden proudly lauded the price controls that Democrats have begun implementing on prescription drugs as part of last August's Inflation Reduction Act. He also touted his administration's Cancer Moonshot, which aims to halve the cancer death rate over the next 25 years. These policies are in direct conflict with one another. Pharmaceutical companies are already responding to the IRA's looming price controls by scaling back their research and development efforts....

January 26, 2023 Issues, Policy Proposals, Price and Costs

A group of 25 senators, led by Sen. Elizabeth Warren (D-MA), requested that HHS Sec. Xavier Becerra exercise march-in rights for Xtandi (enzalutamide), a prostate cancer therapeutic. March-in rights give the government the right to take a license for itself if it helped to fund the product owner's research . . . “Net prices, which take into account discounts and rebates, have been going down for several years,” Wayne Winegarden, Ph.D., senior fellow, business and economics, Pacific Research Institute, told BioSpace. “Gross...