Democratic presidential candidate Bernie Sanders recently introduced legislation that would allow Medicare to negotiate prices with drug companies, which if enacted, could have major implications for both public and private payers.
The federal government could save anywhere between $15.2 billion and $16 billion annually if it negotiated Medicare Part D prescription prices with drug makers, FierceHealthPayer reported previously. And this spring, President Barack Obama asked Congress in his 2016 budget request to allow Medicare officials to do just that. But federal law still prohibits such negotiations.
Thus, in a press conference on Capitol Hill late last week, Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) introduced the Prescription Drug Affordability Act of 2015, according to the Wall Street Journal. Sanders noted that according to a recent poll, 83 percent of Americans support the idea of allowing Medicare to negotiate directly with drug companies, and 72 percent believe it would effective, the National Journal reports.
Fellow Democratic presidential candidate Hillary Clinton has voiced similar concerns, saying on the campaign trail that the government should "drive a harder bargain negotiating with drug companies about the costs of drugs," according to the NJ article.
Sanders' plan could benefit insurers, especially as they continue to struggle to cover pricey treatments and in some cases have shifted many of these costs onto consumers. The bill would require major disclosures from drugmakers about what it costs to produce their medicines and conduct research and trials, as well as the prices they charge and profits they yield for the same drug in other countries, notes the NJ. These provisions could help private payers in their ongoing efforts to negotiate prices.
Still, the Congressional Budget Office "has been reluctant to assign savings to proposals involving government negotiations of drug prices," Tricia Neuman, director of the Kaiser Family Foundation's Medicare policy program, tells the National Journal.