The next Congress and president have few policy options for lowering prescription drug prices that would deliver significant results, CBO says in a new review of seven approaches.
Why it matters: It shows how the ongoing Medicare drug pricing negotiations could be the only vehicle in the near term to bring down some pharmaceutical prices.
The big picture: Growth in U.S. brand-name drug prices has outpaced inflation in recent years, with federal projections showing the retail prescription drug market will total $690 billion in 2031.
- By CBO's measuring stick for a "large effect," a policy would have to reduce average prices for the market by more than 5% in 2031.
What they found: The only approach that would meet that description would be setting maximum allowed prices based on prices outside the United States — the "most favored nation" policy former President Trump's campaign first embraced but has since dropped.
- Other approaches such as making negotiated drug prices available to all commercial purchasers, or requiring pharmaceutical manufacturers to pay inflation rebates for sales in the commercial market, would result in a 1% to 3% reduction in average prices.
- And steps like eliminating or limiting direct-to-consumer prescription drug ads or facilitating earlier market entry for generic and biosimilar drugs would yield reductions of 0.1% to 1%.
