Every regulation creates incentives. CMS’s proposal would encourage one thing above all else: investing less in improving existing medicines. That’s a costly tradeoff for patients—and one Medicare shouldn’t make.
The Trump administration says it wants to accelerate medical innovation. Yet one new proposal from the Centers for Medicare and Medicaid Services could do just the opposite.
The agency has proposed a seemingly technical expansion of Medicare’s prescription drug price control scheme, which was created by the Inflation Reduction Act of 2022. CMS wants to treat certain newer medicines as though they were the same product as older ones when determining when they become eligible for government price controls.
That change would have real-world consequences. It would shorten the period companies have to recover investments in improving existing medicines. As the expected return on those investments falls, companies will have less reason to pursue them.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.
Medicare’s Drug-Pricing Proposal Carries A Hidden Cost
Sally C. Pipes
Every regulation creates incentives. CMS’s proposal would encourage one thing above all else: investing less in improving existing medicines. That’s a costly tradeoff for patients—and one Medicare shouldn’t make.
The Trump administration says it wants to accelerate medical innovation. Yet one new proposal from the Centers for Medicare and Medicaid Services could do just the opposite.
The agency has proposed a seemingly technical expansion of Medicare’s prescription drug price control scheme, which was created by the Inflation Reduction Act of 2022. CMS wants to treat certain newer medicines as though they were the same product as older ones when determining when they become eligible for government price controls.
That change would have real-world consequences. It would shorten the period companies have to recover investments in improving existing medicines. As the expected return on those investments falls, companies will have less reason to pursue them.
Read the entire op-ed here.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.