Medicare Negotiation: A “Too Little” or “Too Late” Framework for Drug Selection

Drug Pricing Lab
November 27, 2019

Among legislative strategies to lower the cost of prescription drugs in the U.S., allowing Medicare to negotiate prices is one that has strong bipartisan support in the American public. House Speaker Nancy Pelosi’s proposal, H.R. 3 (Elijah E. Cummings Lower Drug Costs Now Act of 2019), would allow Medicare to do so for a selection of drugs.  In an article published in the New England Journal of Medicine, Drug Pricing Lab’s Dr. Peter Bach proposes a method for selecting drugs for negotiation that he terms “too little” or “too late”. The “too little” drug category includes drugs that are approved solely based on surrogate endpoints through the accelerated approval pathway, while the “too late” category includes drugs past their market exclusivity periods. Focusing solely on the top 10 drugs by revenue in each category, negotiating prices to the level of UK prices would have produced $26.8 billion in savings in 2019 across the healthcare system.

Read the full article here.