Federal Policy for Lowering Prescription Drug Prices

Abstract

Both Republicans and Democrats are determined to lower the escalating cost of prescription drug prices, which is projected to reach $605 billion/yr by 2026 (Committee on Ways and Means 2019). In this memorandum, we explore the possible outcomes of, 1) linking U.S. drug prices to the international median incentivized by re-importation of the U.S.-made drugs from other countries, 2) allowing the Secretary of Health and Human Services (HHS) to negotiate Medicare part D drugs incentivized through patent exemption and, 3) funding drug discovery through prizes instead of market-exclusive patents. We recommend that the next presidential candidate approve Option 2 and advocate for HHS Secretary negotiation powers with patent exemptions for non-compliant companies.