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What Is The Medicare Drug Price Negotiation Act?

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Policy Background
The Medicare Drug Price Negotiation Act (S. 2011) would amend Title XVIII of the Social Security Act to allow for the negotiation of drug prices on behalf of Medicare beneficiaries for those medications covered under Medicare Part D. The policy would be enacted at the federal level, and the policy tool used to do so would be federal funding. Under this bill, the Secretary of the Department of Health and Human Services (DHHS) would be given the power to negotiate drug prices as well as establish and apply a specific formulary for Medicare-covered prescription drugs. Past rhetoric had implied that Donald Trump would have supported this bill; he condemned the role of pharmaceutical companies creating high drug prices as
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In response to a loss of revenue from Medicare Part D prescription drug payments, drug manufacturers may increase the cost of pharmaceuticals elsewhere, such as the private sector. This escalation in prescription drug prices could result in the price of different insurance policies to increase as well, placing a greater burden on private insurance holders. Specific, quantifiable predictions regarding possible payment increases for privately insured individuals have not been as well-established as has the overall trend of a probable increase in these costs.
(2) Policy Goal: Access
The passage of the Medicare Drug Price Negotiation Act will also inadvertently increase access to many types of medications for individuals who qualify for Medicare Part D. There is a clause within the bill that would establish rebates to be paid by pharmaceutical companies for low-income beneficiaries. These rebates, in addition to lowered costs, would considerably lessen the financial burden placed on low-income beneficiaries. This will allow more individuals greater access to expensive medications. As an example, each year, financial reasons hinder about 16% of diabetic Part D beneficiaries from filling at least one of their prescriptions (Williams, Steers, Ettner, Mangione, & Duru, 2013). This increase in access will help mitigate the occurrence of cost-related nonadherence to prescription medications, and other such consequences
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