Introduction

The Drug Pricing Clinic is your home for all of AAF’s most relevant work on prescription drug policy, proposals, and programs. Policymakers from across the political spectrum are offering proposals for lowering the costs of prescription drugs, but the market is tremendously complicated — and any policy intervention promises to have numerous effects across the various health care markets and for hundreds of millions of patients, both in the United States and around the world. AAF’s team of experts provide up-to-date analysis of the latest policy proposals and their effect on the U.S. health care system.

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Weekly Checkup

Don’t Believe Everything You Read in CBO Cost Estimates

Drug prices continued to drive the health policy debate this week. First, we received a new version of Speaker Pelosi’s drug pricing bill (H.R. 3), aimed at gaining the support of progressive members. This was followed by a trio of…

Insight

Competing Proposals to Reform Medicare Part D

All of the pending proposals seek to put downward pressure on prescription drug prices by realigning incentives in the Medicare Part D program.

Testimony

Testimony on The Lower Drug Costs Now Act (H.R. 3)

U.S. House of Representatives, Committee on Education & Labor Subcommittee on Health, Employment, Labor, and Pensions *The views expressed here are my own and not those of the American Action Forum. I am indebted to my colleagues Douglas Holtz-Eakin, Tara…

Weekly Checkup

Negotiation in Speaker Pelosi’s Drug-Pricing Proposal

The following is adapted from Christopher Holt’s oral testimony that he delivered yesterday afternoon to the House Education & Labor Committee's HELP subcommittee. The hearing discussed Speaker Nancy Pelosi’s prescription drug proposal. Speaker Pelosi’s prescription drug proposal, H.R. 3, aims…

Weekly Checkup

Competition and Pelosi’s Prescription Drug Plan

This week we got our first real look at the details of Speaker Pelosi’s plan to lower drug prices, and there’s a lot to talk about. Medicare negotiation is in, of course—though how accurately “negotiation” describes the proposed process is…

Insight

Senate Finance Proposes Reforms to Medicare and Medicaid Drug Policy

This legislative package from the Senate Finance Committee is the last piece of a tri-committee effort in the Senate to produce a comprehensive legislative package on drug pricing.

Weekly Checkup

The Sound and Fury on Drug Importation

This week, the Trump Administration announced the “Safe Importation Action Plan” to allow the importation of drugs from Canada and possibly other countries. While some Trump Administration officials have previously dismissed the idea as a gimmick at best and dangerous…

Insight

How Congress Is Attempting to Lower Drug Costs

Multiple Senate and House committees have been working for months on legislation to bring down drug costs, almost exclusively by either directly or indirectly increasing competition.
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Background Research

Research

Understanding Pharmaceutical Drug Costs

This paper examines the various factors that influence how drugs are priced--including regulatory burdens and health care payment models--in order to provide an understanding of these prices in the larger picture of American health care.

Insight

Understanding the Policies that Influence the Cost of Drugs

The ACA included many provisions that either directly or indirectly impacted the cost of medicines, costing the industry more than $100 billion over the past eight years.

Insight

Baseball, Arbitration, and Drug Prices

The potential application of arbitration to drug pricing raises a host of questions about how such a program would be implemented; for example, who would select the arbitrator, and what standards would govern the assessment of a reasonable price?

Testimony

Testimony Before the Senate Committee on Finance on Drug Pricing

Testimony before the U.S. Senate Committee on Finance Tuesday, January 29th, 2019 *The views expressed here are my own and not those of the American Action Forum. I thank Christopher Holt and Tara O’Neill Hayes for their assistance. Read a…

Weekly Checkup

The Importance of Investment Incentives in Drug Pricing Policies

Recently, Bloomberg Businessweek covered the story of Achaogen Inc., a biopharmaceutical company specializing in antibiotics. In the span of less than a year, Achaogen launched its first product, a rare new antibiotic to fight otherwise antibiotic-resistant infections, and then filed…

Weekly Checkup

Importing Canadian Drugs is Not the Solution to High Drug Prices

Amid the national conversation around drug prices, the idea of importing cheaper drugs from Canada is gaining renewed attention. Politicians from President Trump and Senate Finance Chairman Chuck Grassley to President Obama and Senator Bernie Sanders have championed the idea.…

Multimedia

The AAF Exchange — Ep. 04: Drug Pricing in the U.S.

AAF’s Director of Health Care Policy Chris Holt discusses the issue of high drug prices as well as several proposed solutions for it.

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Medicare Part D

Research

Redesigning Medicare Part D to Realign Incentives

Restructuring the Medicare Part D program’s benefit design in a way that realigns incentives away from high-cost, high-rebate drugs may be the best way to reduce overall program costs as well as drug prices in other parts of the market.

Insight

Competing Proposals to Reform Medicare Part D

All of the pending proposals seek to put downward pressure on prescription drug prices by realigning incentives in the Medicare Part D program.

Insight

The Impact of Shifting Rebates to Catastrophic Coverage in Medicare Part D

This reform would result in the mandatory rebate amount increasing with the drug’s price, which would provide an incentive against price inflation—an incentive the current system lacks.

Weekly Checkup

Where Does It Go From Here? Drug Pricing Policy After the Rebate Rule Reversal

Late Wednesday, news broke that the Trump Administration was withdrawing a controversial proposed rule that would have altered how drugs are paid for in the Medicare Part D program. There is much to say about the potential merits and challenges…

Insight

What Congress Needs to Consider When Reforming Medicare Part D

AF’s proposal to reform the Medicare Part D program has gained attention recently, but with this attention have come both questions and suggestions for how the proposal could be modified. This paper discusses some of those ideas and provides further analysis to better inform the conversation.

Multimedia

The AAF Exchange — Ep. 09: Drug Pricing Reform

Deputy Director of Health Care Policy Tara O'Neill Hayes walks listeners through the latest reform efforts in drug pricing.

Senate Finance Proposes Reforms to Medicare and Medicaid Drug Policy 

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Medicare Part B

Comments for the Record

Comments To CMS On Proposed International Pricing Index for Medicare Part B Drugs

The solution that has been proposed here is not likely to achieve its objective, and in fact, could result in significant undesirable repercussions.

Weekly Checkup

Importing Drug Price Controls

This week, Senate Finance Committee Chairman Chuck Grassley made news when he publicly opposed a Trump Administration proposal to tie Medicare payments for drugs to the prices paid by other countries. Senator Grassley’s opposition is not surprising, for several reasons.…

Medicaid

Research

Primer: The Medicaid Drug Rebate Program

The Medicaid Drug Rebate Program, which Congress created nearly 30 years ago, requires drug manufacturers to pay a rebate for all drugs dispensed to Medicaid beneficiaries, with brand-name drugs requiring the greatest rebate and generic drugs the lowest.

Weekly Checkup

Laboratories of Drug Pricing Policy

In the ongoing policy debate about the relative value and cost associated with prescription pharmaceuticals, states are emerging as some of the most daring (and possibly reckless) policymakers. Yesterday, Axios’ Caitlin Owens wrote about one state-driven initiative to tamp down…

340B

Insight

CMS Moves Toward Much-Needed 340B Reforms

In order for a manufacturer’s drugs to be covered by the Medicaid program, the manufacturer must agree to participate in the 340B Drug Pricing Program (340B). Under the 340B program, manufacturers must provide discounts to eligible health care providers for…

Research

Market Distortions Caused by the 340B Prescription Drug Program

While the 340B Program is rooted in good intentions, it suffers from a lack of much-needed oversight, resulting in several problems.

Weekly Checkup

“Let 340B” Jumps the Shark

It’s not uncommon in heated public-policy debates for opposing sides to make ridiculous, over-the-top claims about each other’s positions. In health policy, such rhetoric often devolves to accusing the other side of causing people to die. Take, for example, former…
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Experts