National Minority Quality Forum Announces Support for Government Noninterference in Drug Price Negotiations

WASHINGTON, March 19, 2013 /PRNewswire-USNewswire/ -- The National Minority Quality Forum (The Forum) announces today its support for government noninterference in drug price negotiations for Medicare Part D. A provision of the Social Security Act prohibits the Secretary of Health and Human Services from interfering in the negotiations between drug manufacturers, pharmacies, and sponsors of prescription drug plans (PDPs) involved in Part D of Medicare, or from requiring a particular formulary or price structure for covered Part D drugs.  The Forum continues to support this approach.

Proponents of empowering the Secretary to negotiate drug prices say repealing the non-interference provision will reduce prescription drug cost for Part D. There is no evidence to support their opinion, particularly in light of a Congressional Budget Office (CBO) report. (CBO was created by Congress to provide nonpartisan, objective analysis to inform the legislative process.)  The CBO report states "…modifying the noninterference provision would have a negligible effect on federal spending because we anticipate that under the bill the Secretary would lack the leverage to negotiate prices across the broad range of covered Part D drugs that are more favorable than those obtained by PDPs under current law. Without the authority to establish a formulary or other tools to reduce drug prices, we believe that the Secretary would not obtain significant discounts from drug manufacturers across a broad range of drugs." 

In other words, government interference in drug price negotiations can potentially reduce drug costs only by adding a restrictive, government mandated, national formulary.

Formularies, whether established by the HHS Secretary or by commercial insurers, are inherently discriminatory and anti-consumer. They ignore medical need, ability to pay, genetic variability, culture and gender. They achieve financial objectives by compromising quality and denying care. Centralized price setting is an equally objectionable option. Neither of these approaches to artificially constraining access to care is acceptable to the National Minority Quality Forum. Nor, we believe, are they acceptable to the American healthcare consumer – collectively or individually. 

"The Forum supports a consumer-oriented health care system in which government provides means tested premium support for private insurance," says Gary A. Puckrein, PhD, president and chief executive officer of the National Minority Quality Forum. Government can and should play a critical role in this system by enforcing transparency, arresting fraud and abuse, and guaranteeing the safety and efficacy of medical care. Government should encourage investments that address unmet medical needs and support efforts to find cost-efficient solutions for therapies that currently fail to satisfy consumer demands. Government should not set drug prices, nor should it establish formularies."

The National Minority Quality Forum is a Washington, DC–based not-for-profit, non-partisan, independent research and education organization dedicated to improving the quality of health care that is available for and provided to all populations. Visit our website at www.nmqf.org. Look for us on Facebook (National Minority Quality Forum), and follow us on Twitter (http://www.twitter.com/NMQF).

SOURCE National Minority Quality Forum