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PhRMA considering Medicare drug price increase caps

Photo: George Frey/Getty Images

PhRMA, the drug industry's leading trade group, is considering a proposal that would commit member companies to limiting increases in the prices of drugs purchased by Medicare, BioCentury reported this weekend.

Why it matters: Rising brand-name drug costs are due largely to price inflation, a January Health Affairs study found, while generic and specialty drug price increases are driven more by new products entering the market.

  • The proposal is aimed at persuading the administration to drop its Part B plan, which includes tying Medicare drug prices to those in other countries. The PhRMA idea is to limit drug price increases from exceeding inflation.
  • The organization hasn't decided whether the proposal would be limited to Part B drugs, or if it would also include Part D, pharma executives involved in the discussion told BioCentury.

What we're watching: Whether Health and Human Services Secretary Alex Azar thinks this is a reasonable policy trade if it's pitched to him.

Go deeper: The drug pricing maze