Can it really be a negotiation?
The United States House and Senate are on the cusp of passing what remains of the original “Build Back Better Bill” into a pared-down “Inflation Relief Bill.” What remains in the bill remains to be seen, but should it pass, it contains a major section, “Prescription Drug Pricing Reform,” that includes a “Price Negotiation Program to Lower Prices for Certain High-Priced Single Source Drugs.” The ability of the government to negotiate or have any sort of control over drug pricing is probably the one issue most resisted by the pharmaceutical industry. The bill is difficult for mere-mortals to understand with references to various internal and external laws. I do not fully understand all of it yet. In brief, the bill allows Medicare to “negotiate” with drug manufactures for 10 to 20 drugs at a time per year over the next few years. We customers will not see much effect for a while. Medicare will select the drugs to be negotiated from among the top 50 Part-B and Part-D drugs ranked by the total cost to Medicare and its beneficiaries. Since the top 50 drugs make up almost half of Part-D total drug costs, the potential impact on Medicare beneficiaries and drug companies alike may be great. The remainder of this article will explore the top-50 drugs of pre-pandemic 2019.
For the purposes of this article, I used Medicare’s Public Use File: Part-D Utilization 2019 Drug Summary. The file summarizes the total drug cost and unique numbers of prescribers and beneficiaries for each of 1847 generic (chemical-name) drugs, broken down additionally into 3380 brand names or marketed versions of each generic. These are presented below in list and tree map formats.
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