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In 2003 Medicare expanded to include a prescription drug plan (Part D) that had the potential to lower prescription drug costs for Medicare plan holders. For many Americans who rely on prescription drugs for both chronic and acute illnesses, Part D offered an opportunity to help lower drug costs in the moment and protect against higher costs in the future. On the surface, and at the time, this may sound like a win-win scenario, but Part D was not without issues, something that has become clear in recent years.

Part D restricts Medicare from directly negotiating the cost of prescription drugs with drug manufacturers, making all Medicare plan holders beholden to the whims of drug companies. Whatever price they choose to assign to a prescription drug, a plan holder must pay. One day the cost is X, and the next day it could be 3X. These dramatic increases can happen without warning, and without explanation. All of a sudden, an Alzheimer’s patient may no longer have access to the therapeutic that helps retain her memory, or a cancer patient may not be able to afford a chemotherapy pill. Americans are already paying three to four times as much as other countries around the world for the exact same label and we also must live with the risk that the price can increase at any given moment. As a result, 1 in 3 Americans report not taking medication as prescribed, due to cost, which has a direct and negative impact on health outcomes.

In an effort to reverse the ban on the negotiation of prescription drug costs, Congress introduced the Medicare Negotiation and Competitive Licensing Act. This legislation aims to reduce the risk of monopoly power, negotiate reasonable prices, and ensure all consumers are eligible to receive the benefit. There are competing viewpoints on the value and potential impact of this act, as some applaud government involvement in what is viewed as an out-of-control situation, but others, including drug companies themselves, don’t believe the government can determine a more effective pricing strategy than they can do themselves. Let’s take a closer look at both sides.

Those in Favor of Medicare Negotiation

Who among us hasn’t had sticker shock at least one time with a prescription drug? Quickly followed by a feeling of helplessness, because you or your loved one needs this critical medication. By introducing this new legislation, Congress hopes to alleviate and eliminate that experience for Medicare plan holders.  And they are backed by a majority of Americans who, regardless of political affiliation, somewhat or strongly support the government participation during the price negotiation process.

Those Opposed

On the flipside, it is just as easy to understand the skepticism that some people feel about this incredible shift in the process. There is already incredible stress on our healthcare system, even before Covid-19. Is it realistic that we may be able to make this transition without adding further pressure? And not only that, how will senior citizens and individuals with disabilities truly fair in the aftermath of negotiation. A large contingent believe these vulnerable groups could be at risk of losing access to their medications, should negotiation be employed.


The fight for Medicare negotiation is still in progress and may continue to be for a while. There are valid considerations on both sides. Can government participation bring relief to so many Americans and their wallets, or do pharmaceutical companies understand the nuance best and should therefore retain total ownership of prescription drug pricing strategies? There are benefits to both sides, as well as risks. We will continue to follow this discussion with the hope that the final outcome offers the best solution for organizations and individuals alike.

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