H.R. 3’s international reference pricing misses the mark

By Susan Peschin and Duane Schulthess, April 28, 2021

The White House and Congress have declared that reining in Medicare prescription drug costs to help older adults and people with disabilities is a top priority. But one drug pricing strategy on the table would have an outsized negative impact on people with Alzheimer’s disease and decimate research trying to find effective treatments for it.

This strategy, known as international reference pricing, ties the price that Medicare pays for some drugs to those paid by other countries. The idea was first introduced as a model for Medicare Part B drugs by then-HHS Secretary Alex Azar in 2018. The next year, House Speaker Nancy Pelosi’s drug pricing plan, known as the Elijah E. Cummings Lower Drug Costs Now Act (H.R. 3), significantly expanded the scope to allow federal government use of foreign price controls in direct negotiations with pharmaceutical companies for the cost of 250 prescription medicines in Medicare Part B and Part D. It also extended the negotiated price to insurers and the commercial market at large.

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