The costs of prescription drugs continue to spike fiscal concerns for both private and public players and consumers are worried with affordability. In response to higher prices of drugs, Health and Human Services (HHS) Secretary Alex Azar suggested a set of new rules structured to reduce overall pharmacy costs for American consumers. These set of rules require action at the state and federal level and are addressed in the following framework.
Leveraging current laws like March-In Rights to lower prices of prescription drugs at the federal level. Providing the HHS secretary the power for negotiating the cost of drugs on behalf of the American consumers will give the leverage required to reduce prices of drugs especially the ones which are highly priced and which do not face rivalry or consumers have nil chances of negotiating prices. However, on the other hand, it may be perceived by the proponents that the HHS secretary may not be in a position of obtaining suitable deals compared to private plans. Additionally, cost negotiations might restrict the capacity of pharmaceutical firms in investing in drug development and research.
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The proposals require the state to establish in-state and/or multistate collaboration. The state could find state plan to create collaborations with states to buy large amounts of drugs at favorable rebates. Through this means the yearly price increments will be limited, avoid variations in prices amid the states participating and make sure critical medications can be accessed by the common American consumers at affordably lower prices.
Additionally, the proposal requires enacting of legislation to demand pharmaceutical companies to justify the high prices both for brand name and generic drugs or penalties be imposed or give rebates if costs are higher than the stated threshold. Further, the proposal requires creation of independent review committee to evaluate cost setting plus yearly increment in prescription drug prices. As a result, the consumers would be protected from high drug prices.
