Senate Medicare drug pricing could spill over to private market

The original wording calculated the penalty based on prices in the Medicare and commercial markets, which would have created a financial disincentive for drugmakers to raise private sector prices.

But the new wording excludes private sector prices from the calculation. Drugmakers might therefore be more willing to raise prices for low Medicare utilization products and absorb the penalty if private-sector profits eclipse the loss, Cubanksi said.

“It seems even more complicated than simple as to exactly how this will play out now that it no longer applies to the commercial market,” she said. “But I think overall there is still an effect that we can expect from the inflation provision on limiting the growth of prices in the trading market because of the way the price measurement is calculated.”

About 12% of private health insurance spending in 2020 was for retail prescription drugs, on par with the past five years, according to national health spending data from the Centers for Medicare and Medicaid Services.

Studies of the impact of inflation penalties in other drug programs show they help slow price increases for other payers, said Sean Dickson, director of health policy at the West Health Policy Center. , and the provisions of the reconciliation bill are likely to have the same “benefits”. effect.”

Leave a Comment