Prescription Drug "Compromise" Amounts to Government Price Controls


On Tuesday, Democratic lawmakers said they reached a deal on including prescription drug pricing provisions in reconciliation legislation. NTU President Pete Sepp issued the following statement in response:

“We await key details from lawmakers announcing the inclusion of prescription drug pricing provisions in the reconciliation bill before offering detailed analysis, including full bill text and a plain-language explanation of the new provisions that America’s taxpayers can digest and understand. Unfortunately, the scant details we have heard so far are deeply troubling for patients, taxpayers, and the U.S. health system alike.”

“According to lawmaker statements, the new proposed legislation will require Medicare to negotiate prescription drug prices on a top-down basis, upending the numerous negotiations that already take place between private plans and manufacturers in Medicare Part D. Time will tell whether this new legislation includes the hallmarks of other recent, damaging price control proposals, such as a punishing excise tax levied on companies that don’t agree to the government’s negotiating terms or a price cap that makes the whole negotiation process a farce to begin with.”

“Lawmakers also indicate that the new proposal includes inflation caps, clunky price controls that attempt to dictate how manufacturers can adjust their prices based on a broad measure of consumer price inflation that does not easily map onto the private health care market. Like mandatory Medicare price negotiations, inflation caps may sound like appealing policy options to Congress, but they will merely push the cost bubble of researching, developing, and distributing prescription drugs to tens of millions of American patients onto other parts of society.”

“If there is a silver lining, it is that the negotiated deal may include a version of Part D redesign, which NTU has supported for years. Lawmakers should ensure, however, that this proposal is budget-neutral on its own, rather than relying on harmful drug price controls to pay for an out-of-pocket cap in Part D.”

“Overall, as we await further details on this new drug pricing proposal we are deeply concerned that, by seeking hundreds of billions of dollars in the form of higher taxes or rebates, policymakers will undermine the resources to develop new and improved prescription drugs for patients in America and around the world. We encourage lawmakers to reconsider their support for this proposal, go back to the drawing board on market-oriented solutions that protect taxpayers, and, at a minimum, wait to hear from nonpartisan experts at the Congressional Budget Office (CBO) on the budget, market, and health impacts of this legislation before voting on the proposal.”

To discuss the prescription drug proposals evolving in the Senate's reconciliation legislation with NTU President Pete Sepp, please contact NTU Vice President of Communications Kevin Glass at 703-299-8670 or at