Casey Mulligan writes about the new law on Medicare “negotiating” drug prices:
The new budget-reconciliation bill, just signed into law by President Biden, directs the executive branch to “negotiate” the prices of drugs purchased by Medicare. Those provisions of the new law will likely reduce patient access to prescription drugs both in the Medicare and commercial segments, which is contrary to what Democrats have claimed at least since President Clinton was in office.
It is widely understood that “negotiation” is a euphemism for government-set prices. Indeed, the statute prohibits the executive branch from accepting a price above those dictated in the statute, which are a fraction of the prices charged to commercial customers such as employer plans. The new law is purported to increase patient access by making drugs more affordable for participants in the Medicare program where the negotiated prices apply.
The increased-access prediction is contradicted by real-world experience in the pharmaceutical industry . . .
Read the whole thing here.