Some of the “plans” out there to lower prescription drug prices are too minor to matter. But some critics of those plans would have you believe that nothing short of government price-setting would make any difference — which is not the case.
With so many competing ideas floating around, I thought it might be helpful to break all this down, to make sense of the "buckets" of overall approaches that are on the table and how each one would work.
Bucket 1: Move the costs around
- These proposals could reduce what patients pay for drugs, but not necessarily what the health care system as a whole pays — things like moving around the rebates from pharmacy benefit managers, or restructuring hospitals' discount program.
Bucket 2: Increase competition
- The FDA has largely cleared out its backlog of generic drugs waiting for approval, which was a key first step.
- Critics also say drug companies are abusing the patent system by taking out patents on even the most minor component of a drug, then reformulating those components and taking out a whole new “thicket” of patents — keeping generics at bay even longer.
Bucket 3: Reduce the prices
- The marquee policy here is for Medicare to negotiate — or simply to dictate — what it will pay for drugs.
Go deeper: Read more on Axios.com.
Situational awareness: President Trump’s big speech on drug prices, initially slated for later this week, has been delayed as Health and Human Services Secretary Alex Azar recovers from his recent hospitalization.