But full drug price information is often obscured in the U.S. market. Drugmakers, who fought tooth and nail to prevent the new law from passing, say they often provide substantial rebates and discounts to health plans that are not passed on to consumers. Health plans argue that drugmakers are responsible for setting, and raising, the price of their medicines.
The pharmaceutical industry’s powerful trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), declined to comment on how its members might contribute information to CMS or if any of them had been approached.
Officials representing the largest three PBMs—who help negotiate drug prices for health plans—did not respond to requests for comment.
AHIP, the health insurance industry’s largest trade group, and its members “stand ready to assist” the government “on this or other implementation issues for new policies,” spokesperson David Allen said.
Moving Fast
Health policy experts say CMS needs to hire from the outside because it does not currently have the capacity to negotiate drug prices. To have an impact, the agency will need to move quickly, because the law requires it to start negotiating in 2023, with the new prices taking effect in 2026.
“The idea of negotiating drug prices has been talked about for quite a while, but this legislation came together very fast. So the federal government is going to have to move quickly to put in place an infrastructure here,” said Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation.
Brooks-LaSure said she would cast a wide net and is looking to hire experienced public and private-sector negotiators as well as drug-pricing experts.
“We are absolutely looking to hire from within our friends in the administration as well people outside, and folks will start to see postings on our CMS website,” she said. “So whether it’s the VA, whether it’s from the outside world, from the commercial market, welcome.”
Although the Department of Veteran Affairs (VA), which covers healthcare for more than 9 million people, negotiates drug prices, it does so on a much smaller scale than Medicare would be expected to.
Ms. Brooks-LaSure acknowledged the difference and said, “There will be some new uniquely CMS approaches” to negotiations.
CMS should also look to groups like the Institute for Clinical and Economic Review (ICER), an influential Boston-based nonprofit that researches drug prices, said Andy Slavitt, a former CMS chief under President Barack Obama.
