The cost of prescription drugs in the United States remain a hot-button political election issue for both political parties. The vast majority of the public sees drug prices as unreasonably high with one in four people taking prescription drugs reporting difficulty in affording their medication. The Trump Administration, Congress, and federal policymakers have focused growing attention on potential actions to address drug costs, including regulatory and legislative changes that affect both Medicare and Medicaid as well as private insurance. After unveiling proposals to allow the importation of certain prescription drugs and tying Medicare payments for certain Part B drugs to an international price index, the President is now reportedly considering executive action to cut drug prices ahead of 2020 election. The President’s FY 2021 budget blueprint projects savings due to “comprehensive drug pricing reform” totaling $36.5 billion between 2021=2025. House-passed legislation empowers the government to negotiate the price of up to 250 of the most expensive prescription drugs each year, caps out-of-pocket costs at $2,000 on drug spending for Medicare and requires drug companies to pay rebates if drug prices increase faster than inflation. Pending Senate legislation would redesign the Medicare Part D program and implement inflation and rebate policies that would save Medicare about $85 billion over the next decade while saving Medicare beneficiaries  $27 billion in out-of-pocket costs and $5 billion in premiums. 

In advance of this November’s election, the pharmaceutical industry is under mounting pressure due to rapidly increasing expenditures for prescription drugs in the United States. Drug spending is the fastest-growing component of U.S. healthcare costs, increasing a rate of about 15 percent per year.  The Trump Administration and both houses of Congress have differing policy initiatives to cut drug prices which would have a significant impact on the “bottom line” of pharma companies. The White House is moving ahead with several regulatory proposals to cut Medicare payments for certain Part B drugs and is now also considering executive action to arbitrarily cut drugs prices prior to the 2020 election. The House has already passed broad legislation to lower the cost of prescription drugs and bi-partisan drug pricing reform legislation is pending in the Senate which has the support of the President. With prescription drug costs, a major campaign issue for both political parties, the chances are growing for some type of action prior to November, potentially putting billions of dollars at risk for drug manufacturers and other pharma interests.