Commonwealth Fund October 27, 2022
Medicare finally has the power to negotiate with pharmaceutical companies on prices for certain high-cost drugs, but what is the best approach for assessing a drug’s true clinical benefit?
While all methods for determining a drug’s value have their advantages and disadvantages, it’s important that Medicare’s process for choosing is transparent for all stakeholders
The Inflation Reduction Act (IRA), enacted in August 2022, empowers the Centers for Medicare and Medicaid Services (CMS) to negotiate directly with pharmaceutical companies to set the prices for a limited set of high-cost drugs covered by Medicare. However, the law does not detail a process for determining fair prices, other than a consideration for how long the drugs have been on the market.