Health Affairs January 22, 2025
With drug prices rising faster than inflation and outpacing many other health care costs, policy makers are under increasing pressure to find sustainable solutions that balance patient access, innovation, and affordability. We believe centralized procurement—in which governments negotiate drug prices directly with pharmaceutical companies—can be an important tool to address these challenges. This includes the recent introduction of Medicare price negotiations through the Inflation Reduction Act (IRA) of 2022.
For the first time, Medicare is empowered to negotiate prices for high-cost drugs, a move that has triggered concerns among pharmaceutical companies and some stakeholders. These industry voices warn that such measures could significantly reduce profit margins, hinder innovation, and negatively impact patient outcomes. Some academic sources echo these concerns, suggesting...
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