Question

The issue of rising prescription drug costs has garnered a significant amount of discourse in recent years. The Medicare Prescription Drug Improvement and Modernization Act (Medicare Part D) established a prescription drug program for Medicare and provided drug coverage for Medicare enrollees. The Act expressly prohibited Medicare from negotiating drug prices with pharmaceutical companies. The lack of negotiations between Medicare and the pharmaceutical companies has been cited as a major factor in the increased costs of prescription drugs for Medicare enrollees. Formulate an argument where you either support or challenge the effectiveness of allowing price negotiations between Medicare and drug manufacturers in order to reduce overall costs. Justify your response.

Answer 1

Medicare did cover some prescription drugs that were dispensed in the physician office and not self-administered by the patient. This is limited benefit First coverage, Even more devastating, some are calling for Medicare to adopt European- style price controls. Consider the price paid by foreign developed countries as outlined by dean baker of the center for economic policy research.

Develop a new drug is a costly, time-intensive affair. According to dirk calcoen in nature drugs discovery, only about one in 10 drugs products that enter the phase I testing are ever approved in the US

As Joseph walker has written in the wall street journal its common for manufactures who seek better positioning on insurers, drug formularies to give rebates in highly competitive drug markets. The same is true for generics. Currently there is backlog of about 4000 applications with a wait time of 27 months. According to FDA data. In fact, the turning pharmaceuticals debacle would not have occurred had the FDA moved quickly to approve generic versions of daraprim

The answer is not for Medicare to negotiate directly which drug companies; rather, doctors who take care of Medicare patients have more drug choices to treat their illness. In this way, innovation in drug treatments for the disease of the elder population will continue be incentivized and drug prices will be appropriately in the market place.