Verma questions limit of high launch prices for new drugs

Seema Verma
Centers for Medicare & Medicaid Services Administrator Seema Verma questioned when high launch prices will end but doesn't endorse House Speaker Nancy Pelosi's drug pricing plan. (HIMSS)

The top regulator of Medicare and Medicaid, Seema Verma, decried increasing launch prices for new drugs this week, raising the question: “What is too high?”

Speaking at the Milken Institute’s Future of Health Summit Wednesday in Washington, D.C., Verma said the public and Congress had balked at the high cost of hepatitis C cure Sovaldi from Gilead Sciences that launched for just under $100,000 for a year's supply.

“Now we have a half a million-dollar drug and one million-dollar drug and the question is: 'When does that end?'” said Verma, the administrator of the Centers for Medicare & Medicaid Services. Verma added that there are about “50 more of these in the pipeline. The system is not sustainable as is.”

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However, Verma didn’t endorse Democratic measures to give the Department of Health and Human Services (HHS) the power to negotiate lower drug prices. She vehemently pushed back on questions about whether to support House Speaker Nancy Pelosi’s plan to give Medicare the power to negotiate for lower prices and force manufacturers to offer that negotiated price to commercial plans.

“We support negotiation and want more negotiation. The question is, 'Who is the negotiator?'” she said. “I am skeptical of big government solutions.”

Even though Pelosi’s bill would empower the HHS secretary to pick more than 20 drugs to negotiate, Verma said that “we’ve had so many problems in healthcare that can be rooted back to government policy and it is difficult to move things in the government.”

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Verma said that private negotiators, which is the current system under Part D, give Medicare beneficiaries more choices.

“I don’t want to have just one choice and have the government making all the choices for me,” she said.

Verma has previously bashed the proposal, which will likely come up for a House vote soon but faces obstacles in the GOP-controlled Senate. She has instead turned to value-based pricing as an option to tackle high prices.