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AAM All Access Podcast: Medicare Drug Price Negotiation is Bad for Patients

Three Experts Weigh In

AAM’s All Access Podcast lets us all learn from leaders and influential figures in health care. This series of candid, wide-ranging dialogues has given me a deeper appreciation of the dedication and brilliance of the men and women who take on the challenge of making prescription medicines more widely accessible. Only with access to prescription drugs can patients live life to their fullest potential. I look forward to continuing these fascinating, educational dialogues and hope you’ll tune in.

In one of the most important episodes of All Access, I spoke with three experts on the unintended consequences of proposed legislation that would allow Medicare to negotiate the prices of prescription medicines.

Listen now on your favorite podcast channel: Apple | Spotify | YouTube

As Kurt Karst explains, the legislation directs the Department of Health and Human Services to select certain drugs that will be the subject of price negotiations. HHS would publish a list of selected drugs and negotiate agreements with manufacturers to set a price for such drugs. There’s no judicial review for price setting at all, said Kurt. The HHS secretary could potentially move down the negotiated price to 1% for the brand drug, and it would not be reviewable. There's no ability to challenge; it's all within the HHS secretary's discretion.

On the FDA Law Blog—Here It Goes, Here It Goes, Here It Goes Again: The Build Back Better Act (Redux)

Furthermore, he described a potential scenario where the market for a given drug would be wholly driven by negotiations, and there wouldn't be any incentive for generic drug development whatsoever.

→ Read more: Drug Price Negotiation Proposals Undermine Current Bipartisan Approaches to Lower Drug Spending

Rachel Turow observed, The industry relies on predictability, and the proposal could end up creating a negative business case for launch for these [generic and biosimilar] products. Savings from generic and biosimilar competition, she contends, are significantly greater than the savings that Medicare is going to achieve through price negotiation.

As for biosimilars, Rachel Goode said, If this policy's implemented, you will see fewer low-cost biosimilars being developed. And that means there will be less competition and longer monopolies held by branded biological companies…. And ultimately, it means that patients will have less access to lower cost medicines and they will have to show them more of the cost of the branded drugs.

Kurt's words should be heeded, Competition has always been the best solution to lower prices, in health care and many other industries.


Dan Leonard, AAM President and CEO

By Dan Leonard, AAM President and CEO
Published on July 28, 2022

Association for Accessible Medicines


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