Biden Administration Proposes Using March-In Rights on Taxpayer-Funded Drugs

The Biden administration announced new actions on Thursday that aim to crack down on prescription drug costs and promote industry competition to ensure every American has access to high-quality, affordable health care, according to the White House.

New research released by HHS correlated the lack of competition in drug markets with higher prices, with the 25 largest pharmaceutical companies controlling around 70% of industry revenues. Consequently, nearly 3 in 10 individuals struggle to pay for the drugs they need.

As part of the Biden administration’s efforts to make health care more accessible, HHS and the Department of Commerce (DOC) released a proposed framework for agencies on the exercise of march-in rights, which specify that price can be a factor in determining whether a drug or other taxpayer-funded invention is accessible to the public or not. The Biden administration explained that because, over the years, taxpayers have spent hundreds of billions of dollars on research to help in the development of new prescription drugs, these taxpayer-funded drugs and inventions should be affordable to the public. Consequently, the DOC and HHS invited the public to provide input on how the framework could promote both access and innovation.

Doctor writing a prescription

Image credit: 18percentgrey - stock.adobe.com

In addition to high drug prices, the recent acceleration of consolidation in health care markets has led to higher costs, less access to care, and worse quality care, especially in rural areas, the statement notes. Additionally, consolidation has led to a rapid decline in independent physician practices as private-equity ownership has ballooned in sectors like nursing homes, physician practices, and hospices.

To promote industry competition, the Biden administration announced new efforts to stop anticompetitive mergers and practices by dominant corporations in health care markets. This includes launching a cross-government public inquiry into health care corporate greed, where the Department of Justice (DOJ), the Federal Trade Commission (FTC), and HHS will issue a joint Request for Information “to seek input about how private equity and other corporations’ increasing power and control of our health care is affecting Americans,” as well as to identify future areas of regulation and enforcement prioritization.

The DOH, FTC, and HHS will also work together to identify anticompetitive “roll ups” by engaging in data sharing to help the antitrust enforcers identify potentially anticompetitive transactions that might otherwise evade review.

To further promote competition, the Biden administration will also implement new efforts to increase ownership transparency. As part of this, for the first time, CMS released ownership data on federally qualified health centers and rural health clinics.

“Making ownership information transparent allows for identification of common owners with histories of poor performance, analysis of trends on how market consolidation impacts consumers, and evaluation of the relationships between ownership and changes in health care costs and outcomes,” the White House wrote.

Similarly, the administration also aims to increase Medicare Advantage transparency. The announcement emphasized the commitment to ensuring Medicare Advantage insurance plans meet patient needs, offer timely care access, and foster a market with healthy competition. In support of this, CMS has announced that it will start soliciting information from the public early next year to strengthen CMS’ data capabilities and Medicare Advantage transparency efforts; this will help it understand the effects of market shifts on consumers and care outcomes.

These actions build upon those previously taken by the administration, including improving transparency of hospital costs and capping insulin costs at $35 per product per month for seniors.

“President Biden believes that health care should be a right, not a privilege,” the White House wrote. “For too long, corporate special interests and trickle-down economics have allowed Big Pharma to make record profits, while millions of Americans struggle to afford health care and prescription drugs to treat common and chronic conditions.”

Reference

Biden-Harris administration announces new actions to lower health care and prescription drug costs by promoting competition. News release. The White House. December 7, 2023. Accessed December 11, 2023. https://www.whitehouse.gov/briefing-room/statements-releases/2023/12/07/fact-sheet-biden-harris-administration-announces-new-actions-to-lower-health-care-and-prescription-drug-costs-by-promoting-competition/