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Medicare drug price negotiation in the United States: implications and unanswered questions

Sullivan, Sean D. (2023) Medicare drug price negotiation in the United States: implications and unanswered questions. Value in Health, 26 (3). pp. 394-399. ISSN 1098-3015

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Identification Number: 10.1016/j.jval.2022.11.015


The United States is a relatively free-pricing market for pharmaceutical manufacturers to set list prices at the product launch. Few drug price controls exist, and federal price negotiation as a policy has historically been politically untenable. After decades of debate on whether the federal government, specifically the Medicare program, should more actively manage drug prices, the US Congress passed legislation authorizing Medicare to directly negotiate prices with manufacturers. The purpose of this article is to describe elements and implementation of the price negotiation provisions and then comment on the potential impacts on payers, innovations, and the pharmaceutical industry. While impacting only a few drugs each year in the beginning, price negotiation in the Medicare program will have secondary and long-term effects in the US market and beyond. It is clear that in the United States, the Medicare market for drugs will no longer be a free-pricing environment in the industry.

Item Type: Article
Official URL:
Additional Information: © 2022 Elsevier.
Divisions: Health Policy
Subjects: R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
R Medicine > RM Therapeutics. Pharmacology
Date Deposited: 14 Dec 2022 16:51
Last Modified: 26 May 2024 05:09

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