Oct 5, 2017

Why the AMA doesn’t support federal drug price controls

The American Medical Association convened doctors this week. Photo: Bob Herman / Axios

The American Medical Association says it supports the idea of the federal government negotiating lower prices for prescription drugs. But a top AMA leader made it clear to a roomful of doctors Wednesday that the group will never accept "price-fixing" — and suggested that's largely because of economic self-interest.

Key quote: "What we are very concerned about at the AMA level, if we advocated for the price-fixing of pharmaceuticals, we have no leg to stand on if we say we don't like price-fixing for physicians." — Barbara McAneny, AMA president-elect

Why it matters: The question was about negotiating drug prices, but McAneny answered it with an argument against government-set price controls — and in doing so, sounded like she viewed them as one and the same. An AMA spokesman insists the organization hasn't changed its official policy, which says it supports negotiating Medicare Part D drug prices.

Between the lines: Many health care industry groups are united in opposing government price-setting because, they argue, it would contradict free-market principles and could stifle innovation. But don't look past the obvious: Groups are protecting their incomes.

Context: McAneny, an oncologist, made her comments in Chicago at a meeting of the AMA's Relative Value Scale Update Committee, an influential panel known as the RUC. A crowd member asked her if the AMA was "missing an opportunity to throw the weight of our collective influence" behind asking the federal government to negotiate drug prices, which Medicare cannot do by law.

  • The AMA has been outspoken about rising drug prices and the factors behind them. "There's a lot of places where we can look at significant amounts of waste," McAneny said after calling out pharmacy benefit managers, insurance companies and specialty pharmacies.
  • However, official AMA policy currently "opposes the use of price controls in any segment of the health care industry, and continues to promote market-based strategies to achieve access to and affordability of health care goods and services." Instead, it backs transparency measures like requiring drug companies to post prices in ads.

Looking ahead: The RUC's main business of examining new payment rates for physician services starts Thursday. Medicare has said it would adopt nearly all of the RUC's recommendations for the upcoming year.

Correction: The headline and story have been updated to clarify the AMA's distinction between drug price negotiations and government price controls.

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