The Medicare drug price proposal you’re not hearing about

A July 10 STAT article began:

A trio of key White House advisers on Tuesday hinted for the first time that they could support a progressive proposal to cap price increases for certain medicines, speaking at a closed-door Capitol Hill briefing of Republican senators.

That trio includes HHS Secretary Alex Azar and Domestic Policy Council Director Joe Grogan. The proposal, offered by Senator Wyden according to STAT, would cap Medicare drug price growth to that of the Consumer Price Index.

This is intriguing! I’d love to know more, but there is “an agreement with [Senate Finance Committee Chairman Chuck] Grassley not to divulge details to reporters before negotiations are complete.” Phooey!

A July 9 article in The Hill included that

Drug companies would have to pay money back to Medicare if their prices rose too quickly.


Some GOP senators say that approach is akin to price controls, which are anathema to many Republicans.

This is exactly the kind of pushback I’d expect, but it is not a good argument. The government, in regulating drug manufacturers, granting monopolies, and subsidizing drug coverage, is aleady in the price and market control (or support!) business.

Former FDA Commissioner Scott Gottlieb (now a member of Pfizer’s board of directors) reacted to the Hill article in a Twitter thread:

Forbes’ Avik Roy disagreed with Gottlieb on Twitter. Last month, Roy wrote a piece that touched on the idea.

Congress should require that drug companies selling drugs into Part D rebate any price increases above consumer inflation to Medicare, to offset the program’s taxpayer-funded subsidies.

The above is all I’m aware of about the Medicare drug price growth cap proposal. It seems like an idea that deserves more discussion, no?


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