“The House bill — H.R.3 — has a few mechanisms for reducing prescription drug prices, but most notably, it would allow the US health department to directly negotiate the prices it will pay for up to 250 drugs every year. The Congressional Budget Office (CBO) has estimated the bill would save Medicare up to $450 billion over 10 years because of those new negotiating powers. CBO has also projected about eight fewer drugs (out of an expected 300 over 10 years) would come to the market in the next decade because of the decrease in revenues for drug makers.
Despite Trump’s promises on the 2016 campaign trail that he would support proposals allowing Medicare drug negotiations, the White House threatened to veto the House plan. They called it a plan to institute government “price controls,” and said it would limit access to medicine, a favored talking point of the pharmaceutical lobby.
Even without this veto threat, H.R.3 is expected to be dead-on-arrival in the Senate. Senate Majority Leader Mitch McConnell has shown no interest in taking up the bill.”
“Instead, Trump has aligned himself more with Republican Sen. Chuck Grassley, who has advanced a narrower set of reforms from his perch as the Senate Finance Committee chair. (Grassley has also accused McConnell of sabotaging his bill, which moved out of Grassley’s committee with bipartisan support.)
His committee sent a bill to the full Senate in the fall, though it has languished there in the months since. It’s unclear if Trump’s quasi-endorsement — he did not call out Grassley’s bill directly Tuesday night, instead praising the senator generally for his individual work on the issue — will provide any new momentum for the plan. Grassley’s bill, as the Brookings Institution documented, achieves pricing reform through a mix of technical changes to the rebates that drug makers pay under Medicare and Medicaid as well as provisions to cap out-of-pocket drug costs for seniors.
Right now, neither of the bills seems on a fast track to anywhere. Part of this is because Trump’s interest in drug pricing has been scattershot at best, and many Republicans are reluctant to place too many new regulations on an innovation industry.”
“for medical services, other wealthy countries are often paying half the price — or less — as private insurers in the United States.
The Netherlands, consistently ranked as one of the best health care systems in the world by advanced metrics, spends a quarter of what American insurers do on hip and knee replacements. A CT scan costs $1,100 in the United States and $140 in Holland. There are only a handful of isolated instances — childbirth in the United Kingdom, an angiogram or cataract surgery in New Zealand — where the cost of a particular service even approaches the US price.”
“The US is still the wealthiest country in the world. It’s home to the world’s leading biopharmaceutical industry. It tends to have the most cutting-edge treatments. All this contributes to higher prices here than elsewhere. But one big and unavoidable culprit is the lack of price regulation.
Private insurers, which cover more than half of Americans, negotiate with private providers and drug companies to set their prices. They do have some leverage (by denying a provider or drugmaker access to their patients) but it is more limited than in other countries. There is certainly significant price variation within the United States (with CT scans, for example, can cost anywhere from $250 to $1,500 depending on the location), but on average, prices for US private insurance are significantly higher than those seen under other kinds of health systems.
In some of the countries studied by the Health Care Cost Institute, like the UK, the government actually employs doctors and owns hospitals. Others, like Australia, have a universal public insurance program.
Even the Netherlands, which has a fully privatized insurance scheme, has placed more government controls on prices than the United States. Insurers there use global budgets, also common in single-payer systems, to pay providers, capping the amount they’re willing to pay per year to cover all of the services their customers need. It’s a hard limit on health care spending for the coming year, and then providers and payers negotiate prices for individual services based on that budget cap. It’s very different from private insurance in the United States, which is generally open-ended depending on how much medical care is used in a given year — and the price for those services.
Because of America’s high prices, there is a $3.5 trillion industry invested in the status quo.”