Academic Literature

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

Recent draft pieces of legislation and regulation take aim at the rising cost of drugs, targeting drugs that claim the largest share of the health care budget and that face limited competition from generics or biosimilars.
Originally published on 11/28/2019 in The New England Journal of Medicine

Dr. Peter Bach proposes an alternative set of drugs for price negotiation: those that have too little evidence to support full approval or are too late in their life cycle to justify continued high prices.

Changing the pricing approach so that only drugs that meet the "too little" or "too late" criteria would be up for price negotiation would allow Medicare to sidestep some thorny questions, deliver substantial savings, and preserve the current incentive framework for pharmaceutical innovation.

Read the full article here.

Share

Research & Insights

We conduct non-partisan, independent research, and make our work accessible and informative to policymakers and the general audience alike. Browse our featured research or explore our work by article type.

The Conflict Between QALYs and Well-Funded Patient Advocacy Groups
The goal of a QALY is to figure out how much any given drug is worth to a society so that we, as a society, have a benchmark to evaluate the price of pharmaceutical products.
Relentless Health Value 12/10/2020
Remdesivir Less Expensive for "Government Programs"? Not So Fast.
Two options are proposed if Gilead wishes to offer the discounts to the full array of government programs.
Drug Pricing Lab 07/01/2020
Blueprints for Indication-Specific Pricing
Several approaches that rewire existing reimbursement conventions as alternatives to facilitate ISP are proposed.
Drug Pricing Lab 05/19/2020
Pharmaceutical Products and Their Value
Steep increases in prices and spending on prescription drugs in the United States have triggered public outrage and questions about their value.
Value in Health 03/29/2020
Drop in Cancer Deaths Reflect Failures of Our Society. Really.
Despite declining cancer death rates, the nation still presents societal failures to improve the state of our population's health.
The Boston Globe 02/21/2020
Dissecting PhRMA's Opposition to H.R. 3 Lower Drug Costs Now…
Dr. Peter Bach responds to PhRMA's stance of opposition to H.R. 3 Lower Drug Costs Now Act of 2019.
STAT News 10/11/2019
Time to Throw in the Towel on Biosimilars
Peter Bach and Mark Trusheim of MIT Sloan School of Management underscore the drawbacks of Washington's preferred solution to introduce competition for biologics, the biosimilar model.
The Wall Street Journal 08/21/2019
Mortgaging New Treatments Kicks the Can on High Drug Prices
The launch price for one-time gene therapy Zolgensma presents various implications.
Morning Consult 07/09/2019
A $475,000 price tag for a new cancer drug: crazy…
Drug Pricing Lab op-ed in STAT News discusses indication-specific pricing of Kymriah.
STAT News 08/31/2017
US Drug Prices And R&D, Take 2: A Reply To…
To answer Health Affairs responses, Peter Bach and Nancy Yu point back to the research, emphasizing the original intent of the conservative R&D cost assumptions.
Health Affairs Blog 07/27/2017
Prevalence of Off-Label Use and Spending Among Patent-Protected Chemotherapies
The prevalence of off-label anticancer drug use is not well characterized.
JCO 02/19/2013
Fact Checking the NYT Fact Check on the Trump Proposal
The Drug Pricing Lab takes issue with The New York Times "Fact Check" on the recent Trump Administration proposal to pilot alternative reimbursement for Part B drugs.
Drug Pricing Lab

Featured News

See All News
STAT News 10/11/2019

Dissecting PhRMA's Opposition to H.R. 3 Lower Drug Costs Now Act of 2019

Dr. Peter Bach responds to PhRMA's stance of opposition to H.R. 3 Lower Drug Costs Now Act of 2019.
Read Article
Newsletter

Stay up to date on our work and news