Washington lawmakers believe they’ve found a bipartisan solution to lowering the cost of prescription drugs. A proposal called “binding arbitration” is being promoted by House Speaker Nancy Pelosi’s top advisers, who reportedly believe the Trump administration will be on board.
Let’s hope the measure doesn’t gain steam. Binding arbitration — essentially government price controls — would be catastrophic for patients. It would undercut medical innovation and bar American patients from accessing innovative treatments.
Binding arbitration was first floated by leftist health policy experts in 2008. More recently, a handful of congressional Democrats, and even the Medicare Payment Advisory Commission (MedPAC), have voiced support for the scheme.
Binding arbitration would impact drug pricing negotiations between manufacturers and government-sponsored insurance plans, like Medicare. Currently, these parties work directly to settle price points for prescription medications.
But sometimes the government and drug makers don’t agree on a price tag. And should these two parties reach an impasse, government officials could trigger the arbitration process.
It works like this: The government appoints a neutral, third-party arbitrator to settle the dispute. Drug makers and the government would each make the case for their preferred prices to the arbitrator. And after considering arguments from both sides, the arbitrator would set the drug’s price, which would be legally binding.
Let’s hope the measure doesn’t gain steam. Binding arbitration — essentially government price controls — would be catastrophic for patients. It would undercut medical innovation and bar American patients from accessing innovative treatments.
Binding arbitration was first floated by leftist health policy experts in 2008. More recently, a handful of congressional Democrats, and even the Medicare Payment Advisory Commission (MedPAC), have voiced support for the scheme.
Binding arbitration would impact drug pricing negotiations between manufacturers and government-sponsored insurance plans, like Medicare. Currently, these parties work directly to settle price points for prescription medications.
But sometimes the government and drug makers don’t agree on a price tag. And should these two parties reach an impasse, government officials could trigger the arbitration process.
It works like this: The government appoints a neutral, third-party arbitrator to settle the dispute. Drug makers and the government would each make the case for their preferred prices to the arbitrator. And after considering arguments from both sides, the arbitrator would set the drug’s price, which would be legally binding.
