Case Study

USA – Lobbying against Medicare price negotiations

In the USA, the effects of undue lobbying and its impact on health have drawn attention. Evidence suggests that the pharmaceutical industry is the largest lobbying group, with spending in 2015 totaling US$240 million,[1] allowing the industry to successfully influence US health policy that may compromise public health objectives.

For example, revisions in 2003 to the Medicare health-insurance programme included a new programme to subsidise the costs of prescription drugs for beneficiaries, [2] but no measures to authorise Medicare Part D to negotiate directly with companies to set prescription drug prices.[3] Similarly, absent from healthcare reforms introduced in 2010 under the Affordable Care Act, known as Obamacare, were provisions to reduce the prices Medicare pays for drugs.[4] The ability to negotiate could facilitate Medicare to pay less for medicines by means of its purchasing power.

However, there are diverging opinions concerning the effectiveness and specific merits of repealing the ban to negotiate drug prices. For example, the Congressional Budget Office forecast only marginal savings from revoking the ban.

[1] https://www.opensecrets.org/lobby/indusclient.php?id=H04&year=2015

[2] The Economist, September 17-23 2016, p13.

[3] http://healthaffairs.org/blog/2016/09/19/the-politics-of-medicare-and-drug-price-negotiation/

[4] Ibid.

The Pharmaceuticals & Healthcare Programme is an international programme of Transparency International, based in the London office of Transparency International UK.

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