With the ever-skyrocketing prices of prescription drugs, President Donald Trump has vowed to negotiate lower prices. While it is admirable that President Trump has expressed determination to help every day citizens relieve some of the financial burden of runaway prescription costs, he faces many challenges on an already uphill battle.
President Trump has been very vocal about opposing the rising prices of prescription drugs. Early on he promised to negotiate with pharmaceutical companies to lower prices. However, shortly after a meeting with pharmaceutical industry lobbyists and executives on January 31, 2017, he walked back his pledge to negotiate down prices. Now the administration is saying that Trump is going to negotiate prices again.
Whatever the President’s position and course of action in fulfilling his promise, he’ll soon realize that lowering the cost of drugs may not be as easy as it seems.
Is Negotiating Drug Prices The Best Strategy?
A lot of critics are saying that the government should just demand lower prices and rebates when negotiating with pharmaceutical companies or their drugs won’t be sold to Medicare patients. The lowest bidder’s drug would be the one offered to Medicare patients. After all, this is the strategy that’s being implemented by Medicaid and the Veterans Administration.
However, by taking this approach, even though it would lower drug costs, it would also limit the drugs available through Medicare, and could have other adverse impacts.
Some seniors would be forced to switch to a different prescription drug. Plus, there is no guarantee that this low-bid drug would be the latest or most effective medication for their condition.
It could also lead pharmaceutical companies to conduct less drug development and research. Continuous research is essential to hopefully find cures to new diseases. Pharmaceutical companies currently spend more than $100 million annually to develop drugs – with no guarantee of success.
What The Can Government Do To Lower Drug Costs
There are still other options that the government could look into to lower prescription drug costs. They could focus on radically improving the FDA-drug approval process that is long and expensive and reduces industry competition. If the FDA-drug approval process is made faster, we are given more drug choices to treat a particular medical condition – thus prompting price competition among these pharmaceutical companies.
Another route that the government can take is to expand health savings accounts, giving consumers greater participation in how their healthcare money is spent. When people are empowered and more engaged with how they spend their health-care dollars, it can help force down drug costs.
What are your thoughts? I’d love to hear them!
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.