Health Affairs September 13, 2024
In August, the Biden administration marked an important moment in the history of Medicare. For the first time, the program completed negotiations with pharmaceutical manufacturers to establish what it pays for certain prescription drugs. In making these prices public, the administration provided something previously unavailable in the US: a concrete, publicly available reference point for net, or post-rebate, prescription drug prices. Typically, payments for prescription drugs are negotiated between manufacturers and U.S. payers through arrangements that include rebates. The resulting net prices are determined post-sale and are confidential, limiting our understanding of how the market is operating.
The Inflation Reduction Act (IRA), which Congress passed in 2022, was developed in response to concerns about growing unaffordability of prescription drugs under...
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