Short- and Long-Term Impact of Medicare Negotiating Drug Prices: A Critical Look at the Policy Proposals

Boston, MA—May 23, 2017—The International Society for Pharmacoeconomics and Outcomes Research (ISPOR) hosted a session that explored the economic impact of Medicare directly negotiating drug prices for enrollees. The session was held this afternoon at ISPOR’s 22nd Annual International Meeting in Boston, MA, USA.

The issue panel, The Complexities of Medicare Directly Negotiating Drug Prices: What are the Pros and Cons? [IP13], was moderated by Jalpa A. Doshi, PhD, Associate Professor of Medicine, Director, Economic Evaluations Unit, Center for Evidence-Based Practice, Director, Value-Based Insurance Design Initiatives, Center for Health Incentives and Behavioral Economics, University of Pennsylvania, Philadelphia, PA, USA. Panelists included:

  • Juliette Cubanski, PhD, MPP, MPH, Associate Director, Program on Medicare Policy, Kaiser Family Foundation, Menlo Park, CA, USA
  • Dana P. Goldman, PhD, Leonard D. Schaeffer Director’s Chair, Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, CA, USA
  • Patricia M. Danzon, PhD, Celia Moh Professor Emeritus, The Wharton School, University of Pennsylvania, Philadelphia, PA, USA

While the issue of allowing Medicare to negotiate prescription drug prices is not new, it has received renewed attention in the recent US presidential election. A Kaiser Family Foundation Health Tracking Poll found that this proposal was supported by 82% of the US public, however, the implementation and implications of this policy are complicated.

Jalpa A. Doshi, PhD provided an overview of the issue and reviewed the current landscape. Juliette Cubanski, PhD, MPP, MPH provided a summary of both the policy proposals on the issue and government estimates on savings. She also discussed the recent Kaiser Family Foundation Report on the topic. Dana P. Goldman, PhD discussed the short-term economic savings and the long-term social costs of implementing such a policy. Patricia M. Danzon, PhD explored other approaches that Medicare could take to address the pricing issue, including value-based pricing and reference pricing.

Additional information on the ISPOR 22nd Annual International Meeting can be found here. Released presentations from the conference can be found here. Interested parties can follow news at ISPOR’s press site and on social media using the conference hashtag #ISPORBoston.

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