Considerations for Allowing the Government to Negotiate Drug Prices in Medicare Part D

Medicare Part D premiums will increase by 13 percent in 2016, with beneficiaries expected to pay, on average, more than $41 a month for prescription drug coverage. These rising costs—coupled with an increasing number of pricey drugs being placed on specialty tiers within formularies, where out-of-pocket expenses are highest—have spurred discussion around whether laws should be changed to allow the government to negotiate drug prices in Medicare Part D.

In a new Health Affairs blog, experts from The Pew Charitable Trusts examine this policy proposal, urging that policymakers must first consider three questions:

1. Which drugs would the government have the authority to negotiate?
2. Would the government be able to negotiate both drug price and formulary design?
3. Would the negotiated price apply to all Medicare Part D plans?

Read the Health Affairs blog.