Abstract
The United States is a relatively free-pricing market for pharmaceutical manufacturers
to set list prices at the product launch. Few drug price controls exist, and federal
price negotiation as a policy has historically been politically untenable. After decades
of debate on whether the federal government, specifically the Medicare program, should
more actively manage drug prices, the US Congress passed legislation authorizing Medicare
to directly negotiate prices with manufacturers. The purpose of this article is to
describe elements and implementation of the price negotiation provisions and then
comment on the potential impacts on payers, innovations, and the pharmaceutical industry.
While impacting only a few drugs each year in the beginning, price negotiation in
the Medicare program will have secondary and long-term effects in the US market and
beyond. It is clear that in the United States, the Medicare market for drugs will
no longer be a free-pricing environment in the industry.
Keywords
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Article info
Publication history
Published online: December 08, 2022
Accepted:
November 22,
2022
Publication stage
In Press Corrected ProofIdentification
Copyright
© 2023 International Society for Pharmacoeconomics and Outcomes Research, Inc. Published by Elsevier Inc.
