•May 30, 2018•

By Trudy Lieberman,
Rural Health News Service

The headline in the Wall Street Journal seemed to sum up the president’s plans for dealing with America’s high drug prices. “Drug Industry Relieved By Price Proposal,” it read and then described the president’s blueprint as falling short of “more far-reaching ideas.” Since the plan contained no major threat to the status quo, it’s no wonder it boosted pharmaceutical stocks.

In other words, the plan continued the current system under which the government does not negotiate the prices it pays for medicines under the Medicare program, a far-reaching solution that I’ve discussed before in this space. The 2003 law that gave seniors a drug benefit under Medicare prohibited such negotiations, which pharmaceutical manufacturers loudly and forcefully opposed. They feared that allowing the government to use its muscle to bargain over drug prices might slow their escalating increases.

Drug makers weren’t about to let that happen, and the supporters of the law were so eager for a guaranteed benefit, they had little bargaining power to push back.      Login or Subscribe to read the rest of this story.