Melissa Andel Speculates on Medicare Negotiating Drug Prices With Pharma Companies

The proposal to allow HHS to negotiate Medicare Part D drug prices is relatively realistic although the outcome will vary a lot drug by drug and class by class, said Melissa Andel, MPP, vice president of health policy at CommonHealth Solutions.

Transcript

How realistic is the White House’s proposal to allow HHS to negotiate Medicare Part D drug prices directly with pharmaceutical companies?

I think it’s relatively realistic. I think it depends on several factors. I think it's going to vary, it's going to be different drug to drug, class to class, therapy to the therapy, of course. So, you know, every drug is going to be slightly different, right? And I think that if you have a drug that nobody really sort of debates its value, and people feel like it's priced appropriately, it's not going to really be much of a debate about what the price is going to be.

If you look at the proposal, and you assume they go with 120% of this average international index price as like a ceiling, if you have a drug where the average international index price is not all that different than the price that they're charging in America, then well, it's not going to be that big of an impact for that particular drug. It's not going to be that big of a deal. So, it really is going to vary. It's going to be hard to sort of make a blanket conclusion for the industry entirely.

I do think it will be interesting to see if you get into a standoff with a manufacturer, and we are seeing manufacturers aren't necessarily afraid to do standoffs. Now we're seeing it with the 340B program here in the United States, where manufacturers are refusing to distribute to the 340B program. We've seen manufacturers refuse to sell to foreign markets before. In, say, the United Kingdom or France or Germany. You know, these are not small, irrelevant countries, and if they don't like the price that they're offered, they're refusing to participate in those markets. So, it will be interesting to see the sort of the economic behavior. I don't think anybody really knows, right? Because we don't really have a test case for that. And does CMS actually cave in response to a manufacturer? And it will be interesting to see.

I think it's kind of an unknown at this point of what will happen. And it's not the same at all, but it might be sort of interesting to see how the National Coverage Determination with Aduhelm goes. Again, it's a completely different situation, but again, it's CMS going up against a pharmaceutical manufacturer, talking about whether or not an expensive drug should be covered. And so, you know, we'll see what's happened. We have we do have examples of state Medicaid programs that have gone head-to-head with manufacturers. So, you know it if it would be interesting to see like who would win that battle? It's an unstoppable force up against an immovable object, I guess. So, we’ll have to see.